The Tulalip Tribe of Washington is challenging the way the state tries to collect taxes on business transactions conducted on tribal lands. It is taking its case to the U.S. District court on June 5. It has as a co-plaintiff the U.S. government.
The tribe, the state and Snohomish County in October failed to resolve their differences outside of a court. At issue is the state and county’s claim that they can tax business transactions involving non-Indians in the tribe’s Quil Ceda Village, which is located on the reservation. The tribe sued on June 12, 2015, and was joined by the United States two months later. About $40 million a year are at stake.
The tribe claims that the state and county are violating the U.S. Constitution and that by collecting their own taxes they preclude the tribe from imposing its own taxes. This forces the tribe to pay for public services out of a different count, it alleges.
The federal government agrees, but also contends that the state and county are infringing on the tribe’s self-government and violates the Indian Commerce Clause of the U.S. Constitution.
Another bone of contention. The state and county don’t recognize the Quil Ceda Village as a municipality, although the U.S. Department of the Interior and the Internal Revenue Service do. The Village includes about 2,000 acres and was incorporated in 2000 under tribal law—signed on by the Interior Department.
The taxes collected in the Village’s businesses are not returned to the tribe, but are spent elsewhere in the state. The Village has planned, paid for and maintains all infrastructure within it—without having access to that money. The tribe also pays for emergency services, utilities, trash collection, roads and sidewalks, once again without any assistance from the state or county.
In the years since the Village, which is located along Interstate 5, has grown economically to where its businesses employ about 6,000 people. This makes the tribe the largest employer in the county. By far the largest business in the Village is Tulalip Resort Casino, Hotel and Spa, but it also hosts Tulalip Amphitheater; Seattle Premium Outlets, Home Depot; Wal-Mart; and many restaurants.
