OKLAHOMA CITY (AP) – A state rule aimed at cracking down on cigarettes being sold at tribal retailers with a cheaper tax stamp has been withdrawn and arbitrators are trying to determine if it and another rule violate tobacco compacts.

The Oklahoma Tax Commission last year passed two sets of rules designed to prevent tribally licensed tobacco stores from improperly selling cigarettes with a 6-cent tax stamp that’s meant for products sold near Oklahoma borders.

Some tribally licensed stores were shipping cigarettes with the 6-cent stamps to other areas, especially around Tulsa, state officials said.

The first rule was suspended after the Osage Nation filed its lawsuit. The second rule, which went into effect in June, has been withdrawn.

”It would have created other problems and more litigation,” state Treasurer Scott Meacham said May 30 at a symposium on tribal sovereignty in Oklahoma City. ”It was not a good idea.”

Nontribal retailers must use tobacco stamps that cost $1.03 per pack. Tribes with a tobacco compact pay an 86-cent rate, while tribes without compacts pay for a 77-cent tobacco stamp on each pack of cigarettes.

In 2006, the Cherokee Nation requested arbitration over one rule and the Osage Nation filed a federal suit over another one. A federal judge ordered the Osages and the state to follow their compact and settle the matter by arbitration.

Diane Hammons, general counsel for the Cherokee Nation, said she expects a ruling by late summer or early fall.

A ruling on the Osage Nation’s lawsuit is possible early next year, Principal Chief Jim Gray said.

If the state loses, tribes would win their point that the state cannot pass a rule to change a tribal compact and a new one probably would have to be negotiated, Meacham said.

If the state wins, it would prove its case that cigarettes with the cheapest tribal tobacco stamps cannot be sold anywhere but specific areas along the state’s border, Meacham said.

Gray said he prefers a formula that has one rate, similar to compacts in place for 10 years before the current compacts were negotiated.

”I don’t know of a single person affected by this compact that is happy,” Gray said.