Tribe Tax Alternative Proposed Compromise Would Let Kootenai Collect Tax From Business

In hallways, stairways and a cafeteria, Sen. Tim Tucker shuttled between Kootenai tribal officials and Bonners Ferry businessmen Wednesday.

As a result, when a three-hour hearing on the tribe’s proposed tax exemption produced lots of emotion but no agreement between the two sides, the Porthill Democrat had a compromise ready.

“What we have is an issue that’s divided my community for three years,” Tucker told the other lawmakers on the Senate Local Government and Taxation Committee. “It pains me personally that we haven’t been able to resolve it in our own community.”

“The bill…is a good-faith effort,” he said. “There are some problems.”

Tucker proposed an alternative: The tribe would contract with one local business, whose identity would remain secret, to receive that business’ sales tax in place of the state. Then the tribe wouldn’t start or build its own business or buy land, relieving businessmen’s fears about unfair competition.

The committee agreed to consider Tucker’s alternative, along with the existing bill (and possible amendments), on Monday.

“I feel like we’re finally coming to something that is going to satisfy both the community and the tribe,” Tribal Council Chairman Velma Bahe said after the vote. “I’m pleased with the results.”

Lou Maring, owner of Bonners Ferry Appliance & TV, said of Tucker’s idea, “I think it helps everyone. The tribe gets what they want and we’re not facing unfair competition.”

All sides will wait to see Tucker’s proposal in its final form before they say for sure. But it was the most conciliatory moment yet in a dispute that’s dragged on for three years.

Former Boundary County sheriff and commissioner Ron Smith presented 1,800 signatures on petitions opposing the tax exemption. But when Tucker asked him to read the committee the top of the petition, some lawmakers on the committee were angered.

“The preamble you read to that petition is as erroneous as anything I’ve ever heard,” said Committee Chairman Sen. Jerry Thorne, R-Nampa. “I can see why you got that many people to sign.”

Thorne said he’d received a large stack of phone messages about the bill from Boundary County residents, and they were evenly divided for and against.

Among the petition’s claims were that the tribe’s tax exemption would cost taxpayers $1 million, and that it would mean lost jobs and business failures.

Actually, the bill would simply allow the tribe to collect the 5 percent sales tax in place of the state, from one private business that would operate on land the tribe would purchase. It wouldn’t take effect unless courts rule that the tribe’s gaming machines at the Kootenai River Inn are illegal.

Idaho already grants sales tax exemptions to tribal owned and operated businesses on other Indian reservations, without any requirement that they collect their own tax. The Kootenais are the only Idaho tribe without a large reservation that includes commercial centers.

Bonners Ferry businessman Paul Matejovsky told the committee, “There are other ways to accomplish what you’re trying to accomplish. Give them money out of the general fund. Don’t put them into competition with me.”

Tribal officials said they didn’t want a handout - they want to become self-sufficient.

“When we depended on the federal government, our people were sick, alcoholic and without hope,” said Tribal Council member Eileen Wheaton. “We have hope now.”

, DataTimes