Seattle Premium Outlets is part of the Quil Ceda Village shopping center. (Sue Misao / The Herald)

Seattle Premium Outlets is part of the Quil Ceda Village shopping center. (Sue Misao / The Herald)

Tribes closing in on ability to share sales tax with state

A bill headed to the governor affirms deal the Tulalip Tribes reached with the state and county.

OLYMPIA — A bill clearing the way for the state and Tulalip Tribes to stop fighting over sales tax dollars and start sharing them is on its way to the governor’s desk.

The state Senate on Thursday approved House Bill 2803 to allow the governor to negotiate compacts with tribes that divvy up the state’s portion of sales tax collected from non-tribal member businesses on reservations. Gov. Jay Inslee is expected to sign the bill which passed the House last month.

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

Under the deal, the tribe would receive an estimated $4.1 million this budget cycle, with the sum growing to an estimated $30.2 million in 2025. Snohomish County, meanwhile, would continue receiving all its regular sales tax allotment.

And the tribe agreed to spend up to $35 million to design and build a 48-bed civil commitment center in the county, a capital investment sought by the state.

Once House Bill 2803 becomes law, the state and the tribe can write the terms of that three-party agreement into the state’s first sales tax revenue-sharing compact.

“We are so pleased that we finally brought this to the finish line,” said Tulalip Tribal Board Chairwoman Teri Gobin on Friday. “That money will be put right back into the local economy.”

She said the tribe has been trying for 20 years to get the state and county to enter into a compact for the sharing of some of the tax revenues generated within Quil Ceda Village. A compact will provide certainty for future economic development and assure a revenue stream to pay for infrastructure and governmental services, she said.

In June 2015, the Tulalip Tribes sued the state and Snohomish County to stop the state’s collection of the tax on sales to non-Indians at non-tribal stores in Quil Ceda Village. The tribes contended it was their exclusive right, as a sovereign government, to tax the hundreds of millions of dollars in yearly sales at the thriving shopping destination. The U.S. Department of Justice backed the tribes in the case.

The village consists of 2,100 acres of shops, a resort and a casino, but no homes. Major shopping attractions include Seattle Premium Outlets, Cabela’s and Walmart.

In 2016, the state collected nearly $27 million in sales tax on more than $400 million in sales at Quil Ceda Village. Snohomish County and Community Transit took in another $9 million in taxes.

In October 2018, a federal judge ruled in favor of the county and state. The tribes appealed.

Last April, days before initial briefs were due to the U.S. Ninth Circuit Court of Appeals, representatives of the state Attorney General’s Office requested the county and tribes try mediation. Nine months of talks led to the Jan. 8 memorandum of understanding.

In the Senate, where the bill was debated Wednesday and voted on Thursday, Republicans attempted unsuccessfully to amend it. They also expressed concern about the potential loss of revenue to the state’s budget from revenue-sharing compacts with the other 28 federally recognized tribes in Washington.

An amendment proposed by Sen. John Braun, R-Centralia, sought to prevent any compact from taking effect until a federal appellate court ruled against the state.

“It was a convincing win,” he said of the 2018 decision, adding there’s “absolutely no reason” to think the Ninth Circuit Court of Appeals or U.S. Supreme Court would reach a different conclusion.

Senate Majority Leader Andy Billig, D-Spokane, said the parties had a settlement and “the purpose of the settlement is to avoid a further court case.”

Braun countered that it is a “proposed settlement. We are asked to see if it makes sense. I do not think it makes sense.”

The bill passed 32-16 in the Senate and 98-0 in the House.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com. Twitter: @dospueblos

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

A big decision for Boeing’s next CEO: Is it time for a new plane?

As Boeing faces increased competition from Airbus, the company is expected to appoint a new CEO by the end of the year.

A Mukilteo Speedway sign hangs at an intersection along the road in Mukilteo. (Ryan Berry / The Herald)
Mukilteo Speedway name change is off to a bumpy start

The city’s initial crack at renaming the main drag got over 1,500 responses. Most want to keep the name.

Two workers walk past a train following a press event at the Lynnwood City Center Link Station on Friday, June 7, 2024, in Lynnwood, Washington. (Ryan Berry / The Herald)
Trains up and running on Lynnwood Link — but no passengers quite yet

Officials held an event at the Lynnwood station announcing the start of “pre-revenue” service. Passengers still have to wait till August.

Nedra Vranish, left, and Karen Thordarson, right browse colorful glass flowers at Fuse4U during Sorticulture on Friday, June 7, 2024, in Everett, Washington. (Olivia Vanni / The Herald)
A promenade through Everett’s popular Sorticulture garden festival

Check out a gallery of the festival’s first day.

Left to right, Everett Pride board members Ashley Turner, Bryce Laake, and Kevin Daniels pose for a photo at South Fork Bakery in Everett, Washington on Sunday, May 26, 2024. (Annie Barker / The Herald)
Second Everett Pride aims for even bigger rainbow of festivities

Organizers estimated about 3,000 people attended the first block party in Everett. This year, they’re aiming for 10,000.

A house fire seriously injured two people Friday evening, June 14, in Edmonds, Washington. (Courtesy of South County Fire.)
1 killed, 1 with life-threatening injuries in Edmonds house fire

South County Fire crews pulled the man and woman from the burning home around 6 p.m. Friday, near 224th Street SW and 72nd Place W.

Melinda Grenier serves patrons at her coffee truck called Hay Girl Coffee during the third annual Arlington Pride event in Arlington, Washington on Sunday, June 2, 2024. (Annie Barker / The Herald)
Hidden costs, delays crush hopeful food truck owners in Snohomish County

Melinda Grenier followed her dream to open Hay Girl Coffee. Thousands in fees later, it has cost her more than she bargained for.

The I-5, Highway 529 and the BNSF railroad bridges cross over Union Slough as the main roadways for north and southbound traffic between Everett and Marysville. (Olivia Vanni / The Herald)
Highway 529 squeeze starts now between Everett, Marysville

Following a full closure for a night, starting late Sunday, Highway 529 will slim down to two lanes for months near the Snohomish River Bridge.

Lynnwood
New Jersey auto group purchases Lynnwood Lexus dealership land

Holman, which owns Lexus of Seattle in Lynnwood, bought property on which the dealership resides.

Marvin Arellano (Photo provided)
Family: ‘Manic episode’ preceded trooper shooting man on I-5 near Everett

“It’s very, very unfortunate how he was portrayed in his final moments,” Gilbert Arellano said. “He was just such a good person.”

Two visitors comb the beach at Kayak Point Regional County Park on Friday, June 14, 2024, in Tulalip, Washington. (Ryan Berry / The Herald)
Kayak Point reopens ahead of schedule

The county’s most popular park reopened Friday.

Grauates throw their caps in the air at the end of Arlington High School graduation at Angel of the Winds Arena on Thursday, June 13, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
‘So worth it’: Snohomish County graduates step into their futures

Alyssa Acosta, who is Harvard-bound, was one of thousands to walk the stage at Angel of the Winds Arena this month to get high school diplomas.

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.