The Tulalip Tribes of Washington now have Uncle Sam on their side in a high-stakes tax dispute with the state and Snohomish County.
In a muscular courtroom move, the Justice Department on Tuesday filed to intervene on the tribes’ behalf as they seek to prevent the imposition of state and county taxes on businesses located on the reservation 35 miles north of Seattle.
“The United States takes seriously the federal role in protecting tribal self-government,” Assistant Attorney General John C. Cruden said in a statement, adding that “we are committed to eliminating barriers...which hinder tribes from developing healthy economies and providing necessary governmental services on the reservation.”
If a Seattle-based federal judge grants the Justice Department’s intervention motion, the Obama administration’s attorneys will be able to reinforce the Tulalip’s attorneys as the case proceeds.
The federal intervention could also conceivably strengthen the tribal hand in any future settlement negotiations with state and county officials.
The United States takes seriously the federal role in protecting tribal self-government, which has its foundation in federal statutes, treaties, and regulations.
Assistant Attorney General John C. Cruden
“The Tribes have been upfront in communicating their concerns regarding taxation issues...as well as their desire to resolve their legal concerns with the state tax system in the federal courts,” Jason J. Cummings, chief civil deputy in the Snohhomish County Prosecuting Attorney’s Office, said in a statement Tuesday.
Cummings added his office “is reviewing the latest pleadings (and) will discuss its allegations with our elected officials.”
Spokespersons for the tribes and the Washington State Department of Revenue did not offer immediate comment Tuesday.
The dispute now playing out before Senior Judge Barbara J. Rothstein involves the tax status of Quil Ceda Village, a commercial complex featuring a tribal casino, resort and shopping center. The complex opened in 2001 and includes both tribal and non-tribal businesses on 2,163 acres, about one-tenth of the reservation.
Tribal officials say the Quil Ceda Village complex adjacent to Interstate 5 houses more than 150 businesses, including Wal-Mart and Home Depot and attracts up to 60,000 visitors a day.
The tribe provides the “vast range of governmental services,” including police, fire and utility services, the Justice Department’s motion notes. Neither Washington state nor Snohomish County “contributed in any significant respect” to Quil Ceda Village’s development, the motion adds.
Nonetheless, the Justice Department reported, Washington state and the county “collectively impose approximately $40 million annually” in an assortment of sales, use and property taxes. The state and county taxes effectively prevent the Tulalip from imposing a tribal tax.
The Tribe and the Village have significant interest in generating revenues froom activities at the Village through the imposition of their own tribal taxes.
Justice Department complaint
The tribes filed a lawsuit challenging the taxes in June, after extended negotiations failed to settle the issue.
“The state’s and county’s taxation of economic activities occurring in Quil Ceda Village conflicts with the principles of tribal sovereignty and the exclusive role of the United States, as well as with the tribal goals of tribal self-determination and self-sufficiency,” the Justice Department declared in its motion Tuesday.
The federal government’s “substantial interest” in the case includes the fact that the Interior Department owns the Quil Ceda Village land in trust for the Tulalip Tribes, the department’s motion adds.
The Tulalip are considered the successor to the Snohomish, Snoqualmie, Skykomish and other tribes that signed a treaty in 1855 with the United States, according to the Justice Department’s legal filing.