Yakamas' feud with Wash. over fuel taxes in court

YAKIMA, Wash. (AP) Washington state has filed suit in federal court against the Yakama Nation over a disagreement about state fuel taxes.

The lawsuit marks the latest move in a string of back-and-forth court filings and disagreements over whether tribal gas station owners may continue to buy bulk fuel largely free of state fuel taxes.

Tribal members are exempt from the tax. The state and the tribe have operated under an agreement that tribal gas station owners would only be required to pay taxes on 25 percent of the total amount of bulk fuel they purchase, to reimburse the state for fuel purchases by non-Indians at tribal stations.

However, the state terminated the agreement Dec. 5, saying the Yakama Nation was not abiding by its audit requirements. The Yakama Nation filed suit the following day in Yakama Tribal Court.

In response, the state filed suit in U.S. District Court in Yakima on Dec. 17, seeking to have a federal judge force the tribe to pay about $19.4 million in unpaid fuel taxes and to uphold the state's termination of the agreement, the Yakima Herald-Republic reported Friday.

The state fuel tax is 37.5 cents per gallon.

In a separate case, a nonprofit fuel marketing association has sued the state in federal court, questioning the legality of the agreements.

The Automotive United Trades Organization says the agreements reimburse tribes for fuel taxes they do not pay, passing the tax on to customers.

Tim Hamilton, the association's executive director, claims the state will pay tribes half a billion dollars over the next 10 years in fuel tax reimbursements.

"It's economic suicide, what's going on in our state," he said. "And no other state in the union is like this."