American Spirit Cigarette Maker Loses Oregon High Court Tax Case

British American Tobacco PLC subsidiary Santa Fe Natural Tobacco Co. failed to convince the Oregon Supreme Court on Thursday that federal law immunizes it from $3.7 million in state taxes.

“Santa Fe, by having its representatives take ‘prebook orders’ from Oregon retailers, took itself outside the safe harbor” of Public Law 86-272, Justice Aruna A. Masih wrote for the unanimous court. Prebook orders, where Santa Fe representatives immediately sent a retailer’s order to the wholesaler, “facilitated the sale and not the solicitation,” the court said.

PL 86-272 is a 1959 federal law that prohibits states from imposing income ...