Tribe Must Trade Casino For Sales Tax

North Idaho’s Kootenai Tribe may get its long-sought sales tax exemption - but only if it loses its successful gambling operation at the Kootenai River Inn.

A legislative committee voted 5-4 Wednesday to endorse the tribe’s proposal, after committee Chairman Sen. Jerry Thorne said he’d add a provision when it came to the Legislature.

Thorne, who chairs the Senate Local Government and Taxation Committee, said he’d add an “enactment clause” saying the tax exemption would take effect only when Indian gambling like the Kootenais’ casino is banned.

Several Bonners Ferry businessmen on the committee voted against the proposal anyway. They said the tribe’s newly successful casino means they don’t need any help. The casino features bingo and electronic gambling machines.

“They are currently financially stable and will be into the future,” said Skip O’Fallon. “There is no need whatsoever for any support from the state of Idaho.”

The tiny tribe has been seeking new funding sources because federal funds are drying up and legal challenges threaten Indian gambling.

When Idaho’s Legislature held a special session in 1992 to ban full-scale casino gambling, the state promised Idaho tribes help with other forms of economic development.

The Kootenai Tribe, located near Bonners Ferry, has pressed the Legislature for several years for a sales tax exemption for a grocery store. The local business community opposed the idea, saying an exemption would give the tribal store an unfair advantage over other businesses.

The tribe made numerous changes in its proposal in response to the concerns: It agreed to collect a sales tax equal to Idaho’s; it agreed to earmark a share for local government services, and it agreed to refrain from subsidizing the business with the tax money.

But the business community remained unconvinced. Finally, the tribe proposed that it be no more than a landlord, collecting the sales tax from non-tribal businesses that would locate on land the tribe would purchase.

On Wednesday, Bonners Ferry City Councilman Darrell Kerby said he still thought the tribe might try to subsidize its tenant businesses. “They could redirect that money back into a rent subsidy for this business, to make certain that it is highly competitive against a free enterprise operation.”

That made the tribe’s lobbyist, former state Sen. Skip Smyser, blow up. “There is no valid argument why the Kootenai Tribe would take those monies and use them to subsidize a business that they do not own,” he fumed. “The purpose is to take the money to help the tribe.”

Smyser noted that the tribe hasn’t subsidized the Hagadone Corp., which manages its Kootenai River Inn.

, DataTimes