George Hoyum, director of the state Department of Revenue special taxes division, concedes that Minnesota probably has no jurisdiction over sales made by the Omaha Nation. He says state laws allow for the import of one carton of cigarettes tax-free, but that consumers who buy more might become liable for the state's "compensating use tax": They could be forced to pay the tobacco tax a Minnesota retailer would have paid to bring cigarettes into the state, currently $4.80 for every carton. A buyer's failure to report purchases could spark a fine, he adds.
If Kintzi's fantasies of signing up thousands of smokers materialize, Hoyum speculates, the taxes owed by consumers of Stone Tobacco "could add up to enough to be economically worthwhile to collect." First, however, the state would have to become aware of the buyers. And when they get that kind of information, Hoyum says, it's usually as a result of investigations by other government agencies, such as the state attorney general's office or the federal Bureau of Alcohol, Tobacco, and Firearms. Officials at both agencies failed to return City Pages' phone calls for this story.
For his part, Kintzi, who has taken to signing his e-mails with the moniker "Cheap Smokes," says he isn't worried about regulators or tax collectors. And neither the Omaha Nation nor the state need worry he'll resell his $1.20-a-pack cigs at a profit, he adds: "One local guy I know said, 'Why not just slip me a carton here or there?' I said, 'I can make up to $700,000 a year from this. Why am I going to jeopardize that?'"