OLYMPIA, Wash. -- The Washington Senate has embraced a plan to let the state continue taxing gasoline headed for tribal gas stations, preserving a multimillion-dollar tax flow that was put in jeopardy by a federal court ruling, said the Associated Press.
The legislation is a response to U.S. District Judge Thomas Zilly's ruling in November that upheld tribal sovereignty over taxation and opened the door for all tribal retailers to avoid the state fuel tax of 31 cents a gallon.
Two tribes, the Swinomish and Squaxin Island, recently [image-nocss] negotiated a revenue-sharing agreement with the state to allow continued collection. The legislation, which would apply to all reservations, was described as a stopgap measure while compacts are being negotiated.
The state has similar compacts for liquor and cigarette taxation.
The legislation passed 30 to 14 and headed to the House.
The measure is based on a recent U.S. Supreme Court ruling that allows imposition of fuel taxes bound for reservations at the distributor level before it reaches retail stations. The bill would allow the revenue to be shared by the state and tribes. Gasoline taxes are used for road projects.
If all 15 tribes with stations had decided not to collect the tax, it could have cost the state more than $5 million a year and allowed tribes to significantly undercut the prices of off-reservation dealers.
Critics, including State Senator Tim Sheldon (D), said the bill was premature, because new compacts have not been negotiated, and it violates tribal sovereignty. Others complained that distributors will suffer. But supporters, including State Sen. Ken Jacobsen (D), and others, said the measure keeps an important revenue stream flowing while compacts are drafted.
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