Cougar Den, owned by Yakama tribal member Kip Ramsey and operated on the reservation, is incorporated under Yakama law. Cougar Den is designated by the Yakama Nation as its agent to obtain fuel for members of the Tribe. (Google Maps)
Today a six-year stand-off between a Yakama member-owned gas station and the Washington Department of Licensing came to an end. The U.S. Supreme Court ruled 5-4 to uphold a Washington State court ruling. Cougar Den is exempt from paying tax on fuel it transports on public highways in Washington State under the Yakama Treaty of 1855.
If the Supreme Court had ruled against Cougar Den, the White Swan, Washington-based gas station would have owed millions to the state in back taxes. In 2013, Washington assessed Cougar Den $3.6 million in taxes, penalties and licensing fees for importing wholesale gasoline from Oregon to the Tribe’s reservation in Washington.
Cougar Den argued that the Washington State tax is pre-empted by the “right to travel” provision in its Treaty of 1855, which allows Tribal members to travel freely on public highways and transport goods across state lines without taxation. That’s a right the Tribe fought for when it ceded 12 million acres of Tribal lands — a swath of land greater than the size of Maryland.
“We gave up the vastness of that land base for the reserved rights in order to, in this case, conduct trade and our commerce,” Yakama Tribal Chairman JoDe Goudy said.
Mathew Harrington, an attorney for Cougar Den with firm Stokes Lawrence, thanked the high court for recognizing “that the Yakama people gave up millions of acres (90 percent of their land) to protect this right to travel.”
The Washington Supreme Court previously sided with Cougar Den, and the Supreme Court affirmed Tuesday. The U.S. Supreme hearing Washington Department of Licensing v. Cougar Den, Inc. took place October 30, 2018, and Indian Country has intently awaited a verdict. The decision on March 19, 2019, preserves Tribal sovereignty and likely sets a precedent, impacting future decisions on taxing in and related to Indian Country in the Pacific Northwest.
“The Court’s holding is, of course, limited to the specific treaty provision and tax at issue and is undoubtedly a significant victory for the Yakama Nation and its members,” stated James Nichols, an attorney at the international law firm Dorsey & Whitney who specializes in the areas of American Indian law, antitrust and securities litigation.
Justice Stephen Beyer wrote for the majority:
“To call the Washington statute a tax on ‘first possession’ would give the law an over-inclusive label. As explained at length above, there are several ways in which a company could be a ‘first possessor’ of fuel without incurring the tax. For example, Cougar Den would not owe the tax had Cougar Den ‘first possessed’ fuel by piping fuel from out of state into a Washington refinery. First possession is not taxed if the fuel is brought into the State by pipeline and bound for a refinery. Similarly, Cougar Den would not owe the tax had Cougar Den ‘first possessed’ fuel by bringing fuel into Washington through its waterways rather than its highways. First possession is not taxed if the fuel is brought into the state by vessel. Thus, it seems rather clear that the tax cannot accurately be described as a tax on the first possession of fuel.”
The opinion goes on to specify why Cougar Den’s travel does not fall within the scope of the language: “Here, the Yakamas’ lone off-reservation act within the state is traveling along a public highway with fuel. The tax thus operates on the Yakamas exactly like a tax on transportation would: It falls upon them only because they happened to transport goods on a highway while en route to their reservation.”