The Select Committee on Tribal Relations is working on a bill draft that would return improperly collected online sales taxes back to the Eastern Shoshone and Northern Arapaho Tribes. The legislative committee discussed the issue at an interim meeting in Fort Washakie on Aug. 26.
Enrolled Eastern Shoshone and Northern Arapaho tribal members are currently exempt from paying state sales tax while on the Wind River Reservation. However, getting that exemption applied to online purchases shipped to the reservation from out-of-state requires filling out a form to get a certificate, a process that’s been called “cumbersome” and has questions that aren’t very “straightforward,” as described by Wyoming Department of Revenue Administrator Bret Fanning in a previous meeting on the topic.
The proposed bill would return those wrongfully collected online sales taxes to the two tribes, who’d then independently decide how to use the money.
Legislative Service Office (LSO) attorney Lily Sharpe explained the process outlined in the draft bill at the most recent meeting in Fort Washakie.
“The Department of Revenue will hold those sales taxes and distribute them to each of the tribes, and the way that they'll distribute them will be based on an agreement with each of the tribes,” she said.
As it currently stands, the state would retain one percent of the funding in order to cover administrative expenses and costs. Fanning clarified that if the bill were to go into effect, people would still be able to use exemption certificates to ensure they aren’t improperly taxed in the first place.
The committee also discussed another potential bill, which they had requested at their last meeting. The language of the bill states that it would write into law the Department of Revenue’s current practice of “not collecting sales or use tax sourced to land held in trust solely for one tribe (as opposed to land held in trust for the benefit of both tribes).”
As an example, LSO attorney Sharpe explained that the Wind River Casino is on land held in trust by the U.S. government exclusively for the Northern Arapaho Tribe, while the Shoshone Rose Casino is held in trust exclusively for the Eastern Shoshone Tribe.
Fanning emphasized that the bill would just codify what the Department of Revenue is already up to, adding, “there is no sales tax or lodging taxes that are being collected on the vast majority of establishments on the reservation.”
Northern Arapaho Business Councilman Lee Spoonhunter and Eastern Shoshone Business Councilman Wayland Large expressed their support for both bills on behalf of the two business councils.
Kit Wendtland is the tribal relations policy advisor for Gov. Mark Gordon. He said the governor’s office agrees with “the goal of ensuring tribal members are not unlawfully taxed by the state.” But he expressed concern that there might be legal issues with the state collecting money from individuals and then distributing it to the tribal governments, rather than back to the individuals themselves.
During public comment, Eastern Shoshone tribal member Larry McAdams expressed concerns about where the tax money would go and how it would be used. He said not many tribal members know about the exemption form and advocated that the committee work with the tribes to bring the conversation into their general council meetings.
“We need to make a better way so that the whole people, the whole majority of our Eastern Shoshone tribe, gets this information and makes a determination on how to go forward with that. I would very much appreciate it and I know our people would, too,” he said.
“Our plan is to go ahead and seek out feedback from the tribal members, and we're going to do that by having informational meetings or get these bills voted on through general council,” he said.
Committee co-chair Ember Oakley (R-Riverton) offered to attend the two tribes’ general council meetings, while Sen. Cale Case (R-Lander) suggested that the committee could hold local forums to talk about the possible bill.
“We could have meetings here, there's things we could do. Any assistance you would need,” he said.
Navajo Sen. Affie Ellis (R-Cheyenne) co-chairs the committee and first brought up the issue of online sales taxes in the spring of 2022. At the end of their discussion, she emphasized that the goal of the bills is not to collect more taxes from tribal members.
“That's the complete 180 intention of what we're trying to do. We are trying to fix a problem where we know we're impermissibly collecting a tax we shouldn't be and it's a real sticky thing to figure out how to untangle that. And we're trying to do it the best way we can using the tools we have and the technology we have to get it right,” she said.
The committee did not vote on the bills, but will revisit the bill drafts at their next meeting in October.
