Washington attorney writes about tribal state cigarette tax dispute

Ryan Dreveskracht writes in Native Times about growing up in Longview, Washington and how he and his family had always done there big holiday shopping in Oregon to take advantage of the fact that Oregon does not have a sales tax.

He writes in part: “According to the Washington State Revenue Department, local governments lose an estimated $50 million in tax revenue annually to Oregon-Washington cross-border shopping.

. . . Yet, growing up, I was not afraid that the FBI or the local sheriff’s department would be kicking in my door to inspect my presents and arrest my family. And they never did.

That a large percent of Washingtonians flagrantly violate state tax law has been well documented – as has the utter failure of state officials to prosecute.

. . . Anyone following the news in Indian Country is painfully aware of the most recent stream of headlines like this one from the Syracuse Post-Standard: State Vows to Collect Taxes on Indian Reservation Cigarette Sales. These articles have evoked comments and op-eds, like this one from the Cayuga County Citizen: Indians Should Pay Their Fair Share of Taxes.

This media brouhaha is the result of a recent court decision out of the U.S. Court of Appeals for the Second Circuit, holding that Indian merchants selling cigarettes to non-Indians in Indian country have to collect sales tax for the State of New York. . . . .

Not About Money

In its ruling, the Second Circuit purportedly weighed the state/tribal interests, finding that New York’s “valid interest in ensuring compliance with lawful taxes that might easily be evaded” outweighed the tribes’ interest in inherent sovereignty.

Indeed, it is New York citizens, not tribes, who are evading tax liability. New York State has a similar tax structure as Washington. . . . It is estimated that New York loses an estimated $1.4 billion a year to uncollected use tax.

. . . The irony is that the alleged $180 million that New York is losing when its own citizens purchase cigarettes on Indian land is a small fraction of the $1.4 billion that the state would receive if it were to enforce its own laws against those New York citizens. According to the Court, New York actually considered this option, but ultimately determined that collection of its tax “through efforts directed at individual buyers is impractical, and that, if it is to be collected at all, the tax must be precollected.” In other words, the State would rather invade the sovereignty of tribal governments, in order to obtain less than one-tenth of the amount due to it, than to make efforts to enforce its own laws against its own citizens. Not to mention the racking up of exorbitant legal fees.

No, this is not about money – it’s about bossing tribal governments around. It’s about showing tribes what, exactly, their sovereignty is worth in the eyes of the state. Apparently, it’s not much.

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