Legislation would allow tribes to collect state taxes

January 16, 2019 GMT

BISMARCK, N.D. (AP) — Legislation filed by Republican and Democratic leaders sets the framework for American Indian tribes in North Dakota to levy alcohol, tobacco and state sales taxes on their reservations and spend it for tribal services.

But the legislation filed this week would not exempt casinos from a state sales tax that tribal leaders have long argued is unworkable.

Standing Rock Sioux Tribe member Ron His Horse is Thunder said Wednesday that the tribe would likely only support the legislation if casinos are exempt from the state’s 5 percent sales tax.


“It’s a tribal council question and only they can truly answer it,” said His Horse is Thunder, a lawyer and former tribal chairman.

The legislation — a pair of bills that are the work of the Legislature’s Tribal Taxation Issues Committee over the past two years — would allow tribal leaders to enter into a tax agreement with North Dakota’s governor.

Republican Gov. Doug Burgum headed the committee.

The legislation comes largely in response to tribes’ concerns about dwindling federal dollars on the state’s five American Indian reservations.

Republican Sen. Dwight Cook of Mandan, the chairman of the Senate’s Finance and Taxation Committee and primary author of the legislation, said the aim is to allow tribes to levy state taxes, but also to ensure there is no double-taxation on the reservations.

“It is up to them to OK the other sources of tax revenue,” he said.

Tribal businesses on reservations currently are not obliged to levy the state’s sales tax. Businesses that are within reservation boundaries and not owned by American Indians are required to collect sales tax from nontribal members.

If an agreement is signed by a tribe and the governor, the state would then collect and administer sales tax. The state would not share in the revenue or charge administrative fees, under the proposal.

It’s unclear how soon the Republican-controlled Legislature might act on the legislation.

The Standing Rock Sioux Tribe had a similar agreement with the state in 2016 but it ended after after a few months when the state disagreed with the tribe’s contention that its casino purchases were not taxable.

His Horse is Thunder said 5 percent tax has remained as a “tribal tax,” though it does not apply to its Prairie Knights Casino.

The legislation would forbid tribal governments that reach an accord with the state on sales tax collections to impose such taxes.


His Horse is Thunder said the tribe would like to reach an accord with the state concerning sales tax because of the state’s ability to collect sales taxes from out-of-state internet retailers.

North Dakota’s American Indian tribes are the Standing Rock Sioux, Spirit Lake Sioux, Three Affiliated Tribes, the Turtle Mountain Band of Chippewa and the Sisseton Wahpeton Oyate.

All tribes except Sisseton Wahpeton Oyate also share in the state’s 23-cents-a-gallon motor fuels tax.

Standing Rock is the only tribe in the state that also imposes the state’s 44-cents-a-pack cigarette tax. The tribe gets 87 percent of the tax, and the state keep’s 13 percent. The tax raises about $90,000 a year for the tribe, state Tax Department data show.