King Mountain Tobacco Files for Bankruptcy, Alleges Unjust Government Taxes

After years of fighting with state and federal governments over taxes, King Mountain Tobacco Company, Inc. filed for bankruptcy on September 25. The most significant reason for the filing, in King Mountain's opinion, is a bill from the Alcohol and Tobacco Tax and Trade Bureau for $75.5 million dollars. King Mountain was told the bill, which includes principle, taxes and late fees, was due within 30 days.

King Mountain operates within the Yakama Indian Reservation in Washington, on designated tribal lands. The company argues it should be exempt from federal excise taxes, per the Yakama Treaty of 1855.

The TTB disagrees. A few states, the USDA, and the FDA did as well. Indiana and South Carolina reached settlements with King Mountain. And a court awarded claims to the USDA and the F...

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