Tribal Gas Tax Exemption Under Fire
Erik Smith/ Washington State Wire
A group representing nontribal gas station owners says the tribes get an unfair tax break that lets them beat the competition on price. Under compacts with 16 tribes, Washington state gives them a 75 percent discount from state gas taxes. There are 51 tribal gas stations in Washington, where fuel prices are consistently 7 to 12 cents a gallon less than at other stations due in part to the tax rebate. If tribes were to pay the full amount, the state would reap an additional $30 million a year to fix highways.
In 2007, the Legislature passed a law allowing Gregoire to make fuel-tax compacts with the tribes. When they buy fuel, the tribes pay the full wholesale price, including 38 cents a gallon tax upfront. The state sends them a rebate check for 75 percent of the tax.
The Automotive United Trades Organization (AUTO), which represents nontribal service stations, is suing the state. AUTO argues that the existing compacts violate the state constitution, because the 18th Amendment requires gas taxes be used only for highway purposes. The state counters that, based on court rulings, it would collect no fuel tax at all from tribes if it weren't for the compacts. Tribes are required to use the tax rebates for transportation, and often do, but details of how the money is spent are exempt from public disclosure.
"No one but the tribes know, and they will not let anyone look at their books," said Tim Hamilton, a former Grays Harbor-area station owner and executive director of AUTO. The Puyallup Tribe voluntarily posts a description of its road projects and some cost information on its website. Audit reports by the tribes are typically provided to the Department of Licensing, but those cannot be reviewed by the public or lawmakers.
