People shop at Quil Ceda Village’s Seattle Premium Outlets mall. (Sue Misao / Herald file)

People shop at Quil Ceda Village’s Seattle Premium Outlets mall. (Sue Misao / Herald file)

Tulalip Tribes appeal a loss in federal sales-tax case

Millions of dollars are at stake in the fight over state and local taxes at Quil Ceda Village.

TULALIP — The Tulalip Tribes are taking a sales-tax fight to the next level in federal court.

The tribes Thursday filed a notice to appeal a trial judge’s ruling in favor of Washington and Snohomish County. The decision allowed the state and county to continue collecting at least $40 million in sales tax annually at the Quil Ceda Village retail complex, a political subdivision of the tribes.

The tribal government, with support from the U.S. government, had sued to establish its sole taxing authority over the shopping area along I-5, which includes the Tulalip Resort Casino, an outlet mall and big-box stores.

“Tulalip looks forward to telling the story of its development and operation of Quil Ceda Village, and will continue to pursue its goal of generating tax revenue from the village economy to support services for the entire reservation community,” Tulalip Chairwoman Marie Zackuse said Thursday in a prepared statement.

The U.S. Department of Justice also filed a notice of appeal.

The tribes brought the lawsuit in 2015, soon after another case recognized the right of tribes throughout Washington to collect property taxes on trust land.

U.S. District Court Judge Barbara Jacobs Rothstein reached her sales-tax decision in October. The ruling cited testimony from an eight-day trial the previous spring. That included expert witnesses who spoke of the Tulalip Tribes’ ability to achieve financial success, without full taxing authority, through activities such as gaming and commercial leases.

“We’re disappointed that the appeals were filed,” said Jason Cummings, the county’s chief civil deputy prosecutor. “We have confidence that the appellate courts will uphold the ruling of Judge Rothstein. Judge Rothstein had a very reasoned and well-balanced decision.”

An expert accounting witness testified that the tribes had amassed a financial portfolio of nearly $1 billion. In 2015, the tribes spent $137 million on government services, the witness said.

That marks a huge turnaround for a community where unemployment exceeded 70 percent in the 1970s. The tribes’ fortunes changed drastically after opening their first casino in 1992 as an addition to a bingo hall.

Opposing expert witnesses highlighted substantial investments the tribes have made in roads, utilities and other infrastructure to develop Quil Ceda Village into what exists today. The tribes oversee police, a building department and other essential municipal functions.

There are no homes on the village’s 2,100 acres, and large portions remain undeveloped.

For much of the 20th century, the Tulalips had no access to that land. It was condemned by the U.S. government for use as an ammunition depot during World War II and the Korean War. The tribes later leased the land to Boeing into the 1990s.

A crucial step for redevelopment came in 1996, with the opening of the 88th Street overpass.

Walmart was the first major tenant to arrive in 1999. The federal government in 2001 recognized the village as a political subdivision of Tulalip. Businesses there now include Cabela’s and Seattle Premium Outlets. An estimated 50 percent or more of the outlet customers travel there from north of the U.S.-Canada border.

Most of the sales tax collected there flows to the state to support education and other services. A loss in court also would have had a big impact on the county. Executive Dave Somers said county coffers could lose $7 million in revenue, the equivalent of roughly 70 employees.

Noah Haglund: 425-339-3465; nhaglund@heraldnet.com. Twitter: @NWhaglund.

Talk to us

More in Local News

Members of South County Fire practice onboarding and offboarding a hovering Huey helicopter during an interagency disaster response training exercise at Arlington Municipal Airport on Tuesday, June 6, 2023, in Arlington, Washington. The crews learned about and practiced safe entry and exit protocols with crew from Snohomish County Volunteer Search and Rescue before begin given a chance to do a live training. (Ryan Berry / The Herald)
Snohomish, King counties train together for region’s next disaster

Dozens of agencies worked with aviators Tuesday to coordinate a response to a simulated earthquake or tsunami.

Police stand along Linden Street next to orange cones marking pullet casings in a crime scene of a police involved shooting on Friday, May 19, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Lake Stevens man identified in Everett manhunt, deadly police shooting

Travis Hammons, 34, was killed by officers following a search for an armed wanted man in a north Everett neighborhood.

Ciscoe Morris, a longtime horticulturist and gardening expert, will speak at Sorticulture. (Photo provided by Sorticulture)
Get your Sorticulture on: Garden festival returns to downtown Everett

It’s a chance to shop, dance, get gardening tips, throw an axe and look through a big kaleidoscope. Admission is free.

Funko mascots Freddy Funko roll past on a conveyor belt in the Pop! Factory of the company's new flagship store on Aug. 18, 2017.  (Dan Bates / The Herald)
Lawsuit: Funko misled investors about Arizona move

A shareholder claims Funko’s decision to relocate its distribution center from Everett to Arizona was “disastrous.”

Lynnwood
1 stabbed at apartment in Lynnwood

The man, 26, was taken to an Everett hospital with “serious injuries.”

A firefighting helicopter carries a bucket of water from a nearby river to the Bolt Creek Fire on Saturday, Sep. 10, 2022, on U.S. Highway 2 near Index, Washington. (Ryan Berry / The Herald)
Red flag fire warning issued west of Cascades

There are “critical fire weather” conditions due to humidity and wind in the Cascades, according to the National Weather Service.

A house fire damaged two homes around 1:30 a.m. Tuesday, June 6, 2023 in Marysville, Washington. (Photo provided by Marysville Fire District)
Fire burns 2 homes in Marysville, killing 2 dogs

Firefighters responded to a report of a fire north of Lakewood Crossing early Tuesday, finding two houses engulfed in flames.

Snohomish County vital statistics

Marriage licenses, dissolutions and deaths.

An external audit listed over 100 recommendations, such as getting body cameras, minimizing excessive traffic stops and hiring more officers, for the Edmonds Police Department. (Edmonds Police Department)
Police: Man impersonating Edmonds officer pulls over citizen

The man wore a vest that said “sheriff” and claimed to be an Edmonds police officer.

Most Read