State, Tribe Forge '75/25 Agreement'

Washington State, Yakama Nation reach fuel tax deal

Published in CSP Daily News

Yakama

OLYMPIA, Wash. -- The Washington State Department of Licensing (DOL) and the Yakama Nation recently settled a longstanding dispute about how to collect fuel taxes on fuel sold at gas stations owned by members of the Yakama Nation.

The agreement, signed on Nov. 18, was negotiated through a federal mediation service offered by the Ninth Circuit Court of Appeals. This process, which started in July 2013, concluded with an agreement to terminate a Fuel Tax Consent Decree negotiated between the state and the Yakama Nation in federal court and replaces it with a standard state tribal fuel tax agreement.

"We are pleased to put these disputes to rest and move forward," Yakama Nation Tribal Council chairman Harry Smiskin said. "We believe the new agreement will lead to a more prosperous Yakama Nation."

The state notified the Yakama Nation in Dec. 2012 that it was terminating the Consent Decree based on a dispute over audit requirements. The mediation resulted in the Yakama Nation moving from a fuel tax Consent Decree based on cumbersome, transaction-based auditing requirements to a standardized fuel tax agreement similar to those the state has with 18 other tribal governments.

"We worked jointly with Yakama Nation leaders to reach a settlement that benefits everyone yet also recognizes Yakama's unique sovereignty," DOL director Pat Kohler said. "Moving to a standard tribal fuel tax agreement provides a reliable source of tax revenue for transportation projects that are important to the Nation."

Under the new 75% refund/25% state tax agreement (called the "75/25 Agreement"), the Yakama Nation will purchase fuel with the state fuel tax included. They will report their purchases to DOL and receive 75% of the state fuel tax revenue collected as a refund and the state will retain 25% as state tax.

As part of the settlement agreement, the Yakama Nation agreed to pay a settlement in the amount of additional $9 million in fuel taxes for the disputed timeframe (2007 to 2012). The state will withhold a portion of future refunds until the agreed amount is paid.

Keywords: 
taxes