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Kootenai Tribe Trying Again To Set Up Shop Proposal Would Let Tribe Collect Sales Tax At Bonners Ferry Store

The tiny Kootenai Tribe’s hopes to run a grocery story or other business in Bonners Ferry are fading.

Members of the local business community have linked arms against the tribe’s effort to win a sales tax exemption for a tribal business, saying the tribe would compete unfairly with their own businesses, driving them to ruin.

But one final proposal from the tribe could win the local support it needs.

The latest: The tribe is offering to be no more than a landlord. It would lease property to non-tribal businesses, and would collect its own 5 percent sales tax from them in place of the state’s.

Tribal Chairman Velma Bahe said the tribe needs money to run its tribal government programs, from educational programs to welfare. Federal funds for those programs are drying up.

Besides, the tribe wants to be self-sufficient, Bahe said. “I would really like to be in a position to where we will rely on no federal funding, that we’ll be able to do our own with our own businesses.”

The Kootenais’ request for a sales tax exemption raised concerns in the local business community, killing two exemption bills in the state Legislature. At a legislative committee meeting in September, Mike Weland of the Bonners Ferry Chamber of Commerce testified, “The only outcome can be the gradual decimation of the community as a whole.”

Business owners say the exemption would give the tribe an edge over other businesses and possibly even drive them out of business. The tribe’s offer to collect its own tax equal to the state’s 5 percent sales tax wasn’t enough. Business owners said the tribe couldn’t prove it wouldn’t still use that money to subsidize the business.

“The community would love to have new businesses move into the community that operated on a competitive level,” said Darrell Kerby, president of the City Council and owner of a local insurance and real estate business.

“No other group could gain that advantage,” he said.

Bahe said, “I really don’t see the tribe being a threat in any way.”

Nevertheless, the tribe’s latest proposal backs away from tribal competition with local businesses.

Sen. Jerry Thorne, R-Nampa, who heads the committee that’s tried to work out a compromise during the summer, said he sent the new proposal to the Idaho Attorney General’s office. If it passes muster there, Thorne said he’d ask the state Tax Commission to review it. If it still stands up, he’ll put it before the committee.

Bill von Tagen, director of intergovernmental and fiscal affairs for the Attorney General’s Office, said the proposal is still being reviewed. However, he said, “It does not appear to be unconstitutional.”

Both Kerby and Tim Brennan, president of the Idaho Retailers Association, said the proposal might fly if the businesses on the tribe’s land have no competitive advantage.

“If it were pure that the overhead cost would be the same, then I believe we wouldn’t have any objection to it,” Brennan said.

Kerby said it would be “more difficult for the community to respond negatively” if competitive concerns were laid to rest. However, he said the proposal still raises a philosophical issue as to whether the state should be in the business of providing revenue to a tribe.

When Idaho banned casino gambling in 1993, it promised the state’s tribes help with other forms of economic development.

Tribal businesses on reservations already are exempt from sales tax in Idaho, as is the Kootenai Tribe’s Kootenai River Inn, which was granted an exemption in 1988 to match those that other tribes enjoyed.

One disadvantage of the new proposal for the tribe is that it wouldn’t create many new jobs for tribal members. Bahe said she hoped perhaps the tribe could negotiate with a tenant business to ask it to offer jobs to tribal members. The tribe has 50 percent unemployment.

He and other local businessmen asked that the tribe turn over confidential information on its finances, to prove it needs help.

The Tribal Council “decided to respectfully decline,” it stated in a letter to Thorne.

The 120-member tribe, which never got a large land base like Idaho’s other tribes, has been trying to accumulate land, fight its members’ poverty and move toward self-sufficiency. The Kootenais declared war on the U.S. government in 1974, demanding jobs, medical care, a tribal office and more. Congress subsequently placed 12.5 acres of the tribe’s original lands in trust for the tribe.

Bahe said the tribe is trying to reverse decades of hardship.

She said she hopes the business community and the tribe can reach agreement. The Kootenai River Inn is “spreading a lot of revenue within the community to the businesses,” she said.

“It’s time to join hands and let’s do something for Boundary County.”

, DataTimes

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