North Sound News

Tulalip Tribes sales tax lawsuit heads to trial


EVERETT, Wash. — A trial over who gets to collect millions of dollars in sales tax generated by businesses on part of the Tulalip Indian Reservation in Washington state starts this week in federal court.

The Daily Herald in Everett reports the Tulalip Tribes sued the state of Washington and Snohomish County to stop them from collecting the tax generated by businesses in Quil Ceda Village.

Tribal leaders contend federal law pre-empts the state and county governments from collecting the tax, and that they aren't entitled to the revenue anyway because the tribes are providing the required infrastructure and government services for the village.

Attorneys for the state and county, meanwhile, contend that they only require non-tribal businesses to collect the tax on sales to non-Indians, which is allowed under federal law. They also say the state and county do provide millions of dollars in services to the village and its businesses.

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U.S. District Judge Barbara Rothstein will preside over the trial, which is expected to start on Monday and last until the end of May.

Quil Ceda Village is a political subdivision of Tulalip Tribes. It consists of 2,163 acres of tribal trust land bordering I-5 west of Marysville. The more than 150 businesses there, including Cabela's and Seattle Premium Outlets.

Established through a federal charter in 2001, it is governed by a council with much the same authority as a city council, including taxing and policing. But there are no residents.

The state Department of Revenue recorded $413.8 million in taxable sales there during 2016. That generated an estimated $26.9 million in tax revenue for state government and another $8.9 million for local government. The county receives most of the local portion, with a smaller amount going to Community Transit.