Gov. Gary Locke, in what likely was his last news conference before leaving office, said the agreement ensures that "the cigarette wars between the state of Washington and the Native American tribes of our state are over."

The agreement with the Puyallups differs from the legislatively approved agreements with 17 of the state's 29 tribes. It still must be approved by the Legislature and ratified by the incoming governor, Gov.-elect Christine Gregoire.

Instead of having to match the state's tax of $14.25 per carton of cigarettes like the other tribes, the Puyallups will have to impose a tax of only $11.75 per carton. However, 30 percent of their profits will go to the state, whereas the other 17 tribes get to keep 100 percent of their profits.

Tribal Chairman Herman Dillon Sr. said the agreement was mutually beneficial.

"The state will have a new revenue source to help with the large budget deficit, and the tribe will be able to conduct business that is competitive in the marketplace," he said.

When asked whether the agreement with the Puyallups was unfair to other tribes that have already signed agreements with the state, Locke said there are trade-offs, and "I think the other tribes will recognize that."

He added that the other tribes could seek to renegotiate.

Under federal law, cigarettes sold to Indians on tribal land are not subject to the tax, but cigarettes sold to non-Indians are supposed to be taxed fully.

Locke said that with Wednesday's agreement, and current negotiations, 90 percent of the cigarettes sold on tribal lands will fall under a tax partnership with the state.

Locke said four other tribes -- the Quileute, Snoqualmie, Suquamish and Stillaguamish -- have expressed interest in reaching agreements with the state under the existing tax structure of the 2001 law. Under that law, tribes start imposing taxes at 80 percent of the state's tax rate, getting to 100 percent within three years. He said four additional tribes have asked to be added to the list of tribes eligible to negotiate.

The agreement with the Puyallups requires that the tribe's 23 independent retailers buy their cigarettes through state-licensed wholesalers, and that the retail selling price of cigarettes is not lower than the wholesale price.

Where the tribes stand

Tribes that have signed cigarette tax agreements with the state of Washington, those that have expressed interest in negotiating with the state, and those that have not.

Have signed agreements

• Puyallup tribe

• Chehalis tribe

• Jamestown S'Klallam Tribe

• Muckleshoot tribe

• Nisqually tribe

• Nooksack tribe

• Port Gamble S'Klallam tribe

• Quinault Nation

• Samish Nation

• Swinomish tribe

• Squaxin Island tribe

• Tulalip tribe

• Upper Skagit tribe

• Yakama Nation

• Lummi tribe

• Kalispel tribe

• Sauk Suiattle tribe

• Skokomish tribe

Currently negotiating with state under existing law

• Quileute tribe

• Snoqualmie tribe

• Suquamish tribe

On list to negotiate under existing law

• Stillaguamish tribe

Have asked to be added to list to negotiate

• Colville Tribes

• Cowlitz tribe

• Lower Elwha Klallam tribe

• Makah tribe

Have not expressed interest in negotiating

• Spokane tribe

• Hoh Tribe

• Shoalwater tribe

Source: Governor's Office and Washington State Department of Revenue