Tribal fuel tax deal heads to governor’s desk

Boise, Idaho (AP) 2-08

The Idaho House has overwhelming approved fuel tax agreements between the state and four American Indian tribes.

The House voted 55-8 to ratify the agreements, ending the years-long dispute over whether the state can tax fuel sales on Idaho Indian reservations. The agreements now head to Gov. C.L. “Butch” Otter’s desk for his approval.

“The tribes came and they negotiated in good faith and we did accomplish several things that we have been trying to accomplish for a number of years. Ladies and gentlemen, I think this is a good agreement,” House Speaker Lawerence Denney told the House, The Spokesman-Review reported.

The agreements, with the Coeur d’Alene, Nez Perce, Kootenai and Shoshone-Bannock tribes, holds that the tribes will collect gas taxes equal to the state’s 25-cent-per-gallon tax. The tribes will raise their fuel tax if the state raises its fuel tax. Additionally, the tribes will spend their fuel tax proceeds on transportation-related needs. The agreement also settles some interstate trucking and transfer fee issues.

For years the state has sought to tax reservation fuel sales, but the attempts have been repeatedly shut down in the courts on constitutional grounds because states can’t tax sovereign Indian nations. After one court ruling, Idaho had to pay back $3.7 million plus interest in improperly collected fuel taxes to the Coeur d’Alene, Nez Perce and Shoshone-Bannock tribes.

Last year, lawmakers passed legislation over tribal objections to impose the state’s gas tax unilaterally on reservation fuel sales. Lawmakers also provided an exemption for any tribe that signed a negotiated agreement with the governor by December.

Rep. Dick Harwood, R-St. Maries, criticized the agreements, saying they are “allowing tribal government to take money from an Idaho citizen and put it in their own pocket.”

Gov. Butch Otter’s spokesman, Jon Hanian, hailed the overwhelming passage of the resolution. “We’re very pleased,” he said. “It shows that when you enter into good-faith negotiations, they can and do pay off.”

The resolution was unanimously approved in the Senate.