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North Dakota tribes want sales tax exemption for casinos

October 10, 2018

BISMARCK, N.D. (AP) — Some American Indian leaders are opposing draft legislation that would allow tribes in North Dakota to collect a state sales tax on their reservations as long as it includes casinos.

Standing Rock Sioux Tribe member Ron His Horse is Thunder on Wednesday told the Tribal Taxation Issues Committee, headed by Gov. Doug Burgum, that revenue from the tribal casinos “is used for essential government services” on reservations and should be exempt.

His Horse is Thunder, the tribe’s former chairman, believed it to be no different than the tax-free status of North Dakota’s state-owned bank in Bismarck and a flour mill and grain elevator in Grand Forks that funnel most of their profits to the state’s general fund, which finances a variety of state programs.

“This is something we need to come to terms with,” His Horse is Thunder told the 10-member legislative panel.

Two years ago, the Legislature passed similar legislation that allowed the Standing Rock Sioux Tribe in southern North Dakota to impose state sales tax but the agreement was canceled by the state after the tribe exempted its casino.

The new draft bill, which would allow tribal leaders to enter into a tax agreement with North Dakota’s governor, comes largely in response to tribes’ concerns about dwindling federal dollars on the state’s five American Indian reservations, North Dakota Tax Commissioner Ryan Rauschenberger said.

Republican Sen. Dwight Cook of Mandan, the chairman of the Senate’s Finance and Taxation Committee and primary author of the new bill, said in an interview the goal of the legislation was to remove obstacles for tribes wanting to impose the state’s sales tax.

“Only the tribes can decide whether they want to impose the tax on their members,” Cook said. He said the legislation is far from a finished product and will almost certainly change when the Legislature debates the bill when lawmakers reconvene in January.

Tribal businesses on reservations currently do not levy the state’s 5 percent sales tax. Businesses that are within reservation boundaries and not owned by American Indians are required to collect sales tax from nontribal members.

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

Three Affiliated Tribal Chairman Mark Fox told the committee that it is “unlawful” for the state to collect any sales tax within reservation boundaries unless approved by tribal leaders. Fox, in an interview, said Indian-owned casinos are exempt from state taxation under federal law.

Fox’s reservation accounts for about a fifth of North Dakota’s oil production. Tribal leaders last year imposed a higher tax rate for drillers after state officials had lowered it, saying it was needed to pay for road repairs, law enforcement and other consequences of oil development on the reservation.

Three Affiliated Tribes also last year established new rules and doubled the tax on alcohol for non-American Indian-owned businesses that sell alcohol products on the Fort Berthold Reservation.

Distributors had halted deliveries in protest of the higher tax but resumed after it was suspended.

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