Sauk-Suiattle Tribe alleges state unfairly charges online sales tax

Tribal members on the reservation are charged state taxes despite a federal exemption. The tribe says it’s a sovereignty issue.

Logo for news use featuring the municipality of Darrington in Snohomish County, Washington. 220118

DARRINGTON — The Sauk-Suiattle Indian Tribe is suing the state Department of Revenue over the collection of sales tax from tribal members’ online purchases despite a federal tax exemption.

In a suit filed this week in U.S. District Court in Seattle, the tribe said it is seeking “declaratory and injunctive relief” from collection of the state’s 6.5% sales tax on online purchases. The state Department of Revenue and its acting director John Ryser are named as defendants.

Online retailers began collecting sales tax from buyers according to their shipping addresses in 2018, following a U.S. Supreme Court ruling determining sellers had to collect taxes on behalf of states that impose them. But federal law has long exempted enrolled tribal members on reservations from sales taxes, with a few caveats.

To qualify for the exemption, goods must either be purchased on a reservation or be delivered to the tribal member on a reservation.

Jack Fiander, general counsel for the Sauk-Suiattle Tribe, said these restrictions present an unnecessary hardship for both tribal members and vendors. If a resident of the tribe’s reservation 5 miles north of Darrington wants to purchase a car, they can’t just drive it off the lot. The seller has to deliver the vehicle to the reservation to qualify for the tax break. This often incurs more fees than the sales tax exemption is worth, Fiander said.

The greater concern, though, is the principle of the matter, Fiander said.

Items used for tribal fishing, hunting or gathering are tax-exempt regardless of where they are delivered, according to the Department of Revenue’s site. A form is available from the department for tribal members to request tax refunds from purchases made off-reservation, but it requires applicants to confirm the purchase was delivered to a reservation. Washington’s process for out-of-state tax refunds requires applicants to provide proof of residency, but makes no distinction as to where the purchase was delivered.

In other words, an Oregon resident could buy a car in Washington and drive it off the lot — they just have to submit receipts later, and they’ll be reimbursed the sales tax.

The suit alleges this constitutes discrimination against the tribe. Not everything can be delivered to the Sauk-Suiattle reservation in the Cascade foothills, Fiander said, and there aren’t a lot of alternatives. The only brick-and-mortar retailers on the remote reservation are a convenience store and a small grocery store. Online purchases are often the best way to buy everything from everyday household needs to critical supplies for the tribal medical clinic, Fiander said.

More importantly, the imposition of sales tax constitutes a threat to tribal sovereignty, Fiander said. He said the tribe doesn’t feel they should pay state taxes for benefits they don’t receive.

“For something to actually, legally be a tax, that revenue has to be used to provide government services,” Fiander said. “But (the tribe) provides water, garbage, preschool, law enforcement, all those services, at its own cost. So ultimately, it’s sort of like you’re making a gift to the state in return for nothing.”

In a written statement, Sauk-Suiattle Tribe Chairman Nino Santos II said the tribe’s ancestors exchanged millions of acres of land “at great hardship” for a reservation governed by their own laws. The tribe already imposes its own tax to cover the services it provides to residents, he said.

“Although the 6.5% of the Washington State Sales Tax is small, this is a sovereignty issue,” Santos said. “Given the impoverishment of our people, placing a sales tax in addition to what they already pay only worsens the condition.”

A spokesperson for the Department of Revenue said in an email Wednesday the complaint had been received and was being reviewed by legal counsel. The spokesperson said the department “does not engage in discrimination while administering the state’s tax laws.”

Fiander said the tribe was not seeking repayment on a grand scale by filing the suit. Rather, members want the state to acknowledge their sovereignty, he said. A declaration from the department or a court affirming that the tax has been unjustly applied would be “highly satisfactory,” he said.

But going forward, Fiander said the tribe hopes a solution can be found. In 2020, the Tulalip Tribes struck an agreement with the state to share sales tax proceeds from the tribes’ Quil Ceda Village business park near Marysville. That compact laid the groundwork for all Washington tribes to negotiate similar deals, but Fiander said the Sauk-Suiattle Tribe wouldn’t be in the same position given the lack of major businesses on the tribe’s reservation.

The solution could even be as simple as asking online retailers, like the Washington-based giant Amazon, to offer options for tribal members to use their exemption. Amazon doesn’t charge sales tax if a buyer ships a purchase to Oregon, Fiander said, so he thinks it would be possible to do the same for addresses on reservations with proof of tribal membership.

“Every incremental increase in expenses, even if it’s just a bit, counts here,” Fiander said. “But mostly, it’s a recognition of our status. And that counts a lot.”

Riley Haun: 425-339-3192; riley.haun@heraldnet.com; Twitter: @RHaunID.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Snohomish County prosecutor Kara Van Slyck delivers closing statement during the trial of Christian Sayre at the Snohomish County Courthouse on Thursday, May 8, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Jury deliberations begin in the fourth trial of former Everett bar owner

Jury members deliberated for about 2 hours before Snohomish County Superior Court Judge Millie Judge sent them home until Monday.

Danny Burgess, left, and Sandy Weakland, right, carefully pull out benthic organisms from sediment samples on Thursday, May 1, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
‘Got Mud?’ Researchers monitor the health of the Puget Sound

For the next few weeks, the state’s marine monitoring team will collect sediment and organism samples across Puget Sound

Everett
Everett considers ordinance to require more apprentice labor

It would require apprentices to work 15% of the total labor hours for construction or renovation on most city projects over $1 million.

Craig Skotdal makes a speech after winning on Tuesday, April 22, 2025 in Tulalip, Washington. (Olivia Vanni / The Herald)
Craig Skotdal: Helping to breathe life into downtown Everett

Skotdal is the recipient of the John M. Fluke Sr. award from Economic Alliance Snohomish County

Paine Field Community Day returns Saturday, May 17

The youth-focused celebration will feature aircraft displays, talks with pilots and a variety of local food vendors.

Jonathon DeYonker, left, helps student Dominick Jackson upload documentary footage to Premier at The Teen Storytellers Project on Tuesday, April 29, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Everett educator provides tuition-free classes in filmmaking to local youth

The Teen Storyteller’s Project gives teens the chance to work together and create short films, tuition-free.

Kamiak High School is pictured Friday, July 8, 2022, in Mukilteo, Washington. (Ryan Berry / The Herald)
Mukilteo police respond to stabbing at Kamiak High School

One juvenile was taken into custody in connection with Friday’s incident. A victim was treated at a hospital with non-life-threatening injuries.

A Mukilteo firefighter waves out of a fire truck. (Photo provided by Mukilteo Fire Department)
Mukilteo council places EMS levy lift on November ballot

The city is seeking the funds to cover rising costs. The local firefighters union opposes the levy lift.

Everett
Federal prosecutors: Everett men looked to sell 7 kilos of fentanyl

Prosecutors alleged the two men stored fentanyl and other drugs while staying in a south Everett apartment.

Vehicles travel along Mukilteo Speedway on Sunday, April 21, 2024, in Mukilteo, Washington. (Ryan Berry / The Herald)
Mukilteo cameras go live to curb speeding on Speedway

Starting Friday, an automated traffic camera system will cover four blocks of Mukilteo Speedway. A 30-day warning period is in place.

Arlington head girls basketball coach Joe Marsh looks to the court as the Eagles defeat Shorecrest, 50-49, to advance to the state semifinals at the Tacoma Dome on Thursday, March 5, 2020. (Kevin Clark / The Herald)
Joe Marsh, Arlington High School girls basketball coach, dies at 57

Marsh, considered one of the state’s all-time great high school basketball coaches, lost a four-year battle with stage 4 prostate cancer on Wednesday.

Patricia Robles from Cazares Farms hands a bag to a patron at the Everett Farmers Market across from the Everett Station in Everett, Washington on Wednesday, June 14, 2023. (Annie Barker / The Herald)
Everett Farmers Market to return Sunday for 2025 season

Every Sunday from 10:30 a.m. to 3 p.m. until Oct. 26, vendors will line Wetmore Avenue from Hewitt Avenue to Pacific Avenue.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.