Washington State Lawmakers Examine Tribal Gas Tax Refunds

Republicans want the controversial agreements revisited as the issue could appear before the state Supreme Court soon.

March 21, 2011

SEATTLE - Washington state Republicans are asking the governor and Legislature to reexamine the agreement that refunds state gasoline taxes to some state Native American tribes, the Seattle Post Intelligencer reports. At stake is $90 million in gas tax funds.

Four years ago, legislators revised the state??s gasoline tax law to settle years-long litigation between the tribes and state, changing it to the current sharing of gasoline tax money under agreements with federally recognized tribes that have gasoline states on tribal lands. The compacts allow tribes a refund of 75 percent on state gas taxes, currently at 37.5 cents a gallon.

Members of tribes do not have to pay the fuel tax when filling up at reservation gasoline stations, but a 2010 lawsuit claims the state gives refunds for taxes the tribes didn??t pay. Earlier this month, Rep. Mike Armstrong sponsored a bill that would provide for tougher audits of how tribes spend the refund and also make the Legislature "appropriate the funds necessary to implement the agreements."

His bill also specifies that the tribes much spend the refund money on "highway purposes," as stated in Washington??s constitutional amendment. Currently, tribes can use the funds for "transportation planning, construction, and maintenance of roads, bridges, boat ramps, transit services and facilities," and for "police services and other highway-related purposes."

"I think it is just a wake-up call to say, you know, we should be paying attention to some of this," said Armstrong. "And if it does nothing than to have the tribes get engaged in the process a little bit and show us where some of the money is being spent, I think that would be helpful."

Earlier this year, the Automotive Trades United Organization (AUTO) filed a lawsuit to halt refund payments to the tribes, claiming its members could not compete fairly with tribal stations, which could lower prices more because of the refund. A lower court dismissed the case because the tribes cannot be sued in state court. AUTO is filing a petition to have the state Supreme Court review the case.

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