Inslee signs law allowing sharing of sales tax with tribes

OLYMPIA — A new law signed Wednesday allows the governor to enter into sales tax revenue-sharing compacts with federally recognized tribes.

Gov. Jay Inslee signed House Bill 2803, which creates the path for tribes to retain a share of the state’s portion of sales tax collected from non-tribal member businesses operating on reservations.

The impetus for the legislation was an agreement the Tulalip Tribes reached earlier this year with the state and Snohomish County. That deal settled a federal lawsuit over who is rightfully entitled to sales tax receipts generated at the Quil Ceda Village shopping center.

At the time — before COVID-19 — it was projected that the tribes would receive an estimated $4.1 million over the next 15 months, with the sum growing to an estimated $30.2 million in 2025. Snohomish County, meanwhile, would continue receiving its regular sales tax allotment.

And the tribes agreed to spend up to $35 million to design and build a 48-bed civil commitment center in the county.

With HB 2803 signed, the state and the tribes can write terms of that three-party agreement into the state’s first sales tax revenue-sharing compact.