BIA coming to Swinomish for tax consultation

The first in a series of eight “consultations” to be held by the Bureau of Indian Affairs on rules regarding business enterprises on reservation land will be held next Thursday at the Swinomish Casino and Lodge.

While the agency is seeking comment from tribes on a variety of elements as it ponders revisions to the “Traders With Indians” rule, the issue garnering the most attention among tribes and local governments involves taxes.

Essentially, some tribal officials hold that it is unfair for state and local governments to tax non-tribal businesses located on Indian reservations and argue that any taxes collected should go to the tribes. Meanwhile, state and local government entities maintain that the taxes are necessary to pay for public services that benefit everyone, including tribes.

Presently a lawsuit in the federal court filed by the Tulalip Tribe against Snohomish County and the State of Washington seeks to claim some $40 million in annual sales tax generated by about 150 businesses on Tulalip land, including Walmart and Home Depot and Seattle Premium Outlets.

So far Skagit County doesn’t have a big stake concerning businesses taxed on tribal land, but there is concern. In December, the Skagit County Board of Commissioners filed an objection with the BIA over a proposal by the Swinomish Indian Tribal Community to amend its constitution in a way that could expand its reservation to include March’s Point. So far, a provision that would allow such a reservation expansion has not been sanctioned by the BIA.

But should thousands of acres including the Shell and Tesoro refineries, two car dealerships, numerous businesses and a portion of the City of Anacortes as well as private homes become reservation land, a rule shifting taxes to the tribe could have a big impact.

In a letter to Swinomish attorney Steven LeCuyer, attorney Will Honea with the Skagit County Prosecutor’s Office, stated that the March’s Point area generates about a third of the county’s tax revenue, which goes to provide public services for about 120,000 residents. “Accordingly, diverting that tax revenue to the exclusive service of the +/-700 Swinomish members would obviously be problematic on many levels,” Honea wrote.

The county attorney also asked the tribal attorney whether it is the Swinomish perspective that the proposed rule change “would direct sales tax generated by non-Indian businesses operating on-reservation to tribal government only?”

On Monday Honea said he had not received a response from Swinomish to his Feb. 9 email.

Skagit County Commissioner Ron Wesen said the county does not plan to attend the consultation meeting on Thursday. “It’s my understanding we are not welcome there,” he said.

Anacortes City Attorney Darcy Swetman said she was told the federal agency’s meeting is not open to the public. She contacted the BIA official listed as the point person in the Federal Register notification of the consultation meeting. Elizabeth Appel, director, Office of Regulatory Affairs and Collaborative Action, office of the Assistant Secretary, Indian Affairs, replied to Swetman.

“Liz Appel left a phone message saying it was a closed meeting for tribal consultations only,” Swetman said.

Appel has not responded to phone and email messages from this newspaper seeking information. Also, Swinomish Chairman Brian Cladoosby, Tribal Administrator Allan Olson and Tribal Attorney Stephen LeCuyer did not respond to phone messages left on Tuesday.

According to a notice in the Feb. 8 Federal Register, the consultation session is scheduled for Thursday, Feb. 23 from 8:30 to noon at the Swinomish Casino & Lodge.

The process to revise the Traders With Indians rule, which was originally crafted in 1957, began in the last two months of Obama Administration. It will be up to the Trump Administration to approve any rule changes. So far President Trump’s pick to head the Department of the Interior, Rep. Ryan Zinke, R-Montana, has yet to be confirmed by the Senate.

The Department of the Interior is the agency that oversees the Bureau of Indian Affairs.