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Interim Guidance to County Assessors regarding the Application of the Federal Ninth Circuit Court of Appeals Decision in Confederated Tribes of the Chehalis Reservation v. Thurston County Board of Equalization
Chronology and Background
In its opinion for the case Confederated Tribes of the Chehalis Reservation v. Thurston County Board of Equalization, No. 10-35642, 724 F.3d 1153 (9th Cir., 2013), the federal Ninth Circuit Court of Appeals addressed whether permanent improvements at the Great Wolf Lodge are subject to property tax.
The appellate court reversed the district court, which had granted summary judgment to Thurston County. The Court, relying on Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973), explained that “the question of tax immunity cannot be made to turn on the particular form in which the Tribe chooses to conduct its business.” The Court then held that under Mescalero and 25 U.S.C. § 465, state and local governments cannot tax permanent improvements built on non-reservation land owned by the United States and held in trust for an Indian Tribe, stating that:
Under Mescalero, § 465’s exemption from state and local taxation applies to the permanent improvements on that land. Thus, neither Thurston County nor any other state or local entity can tax the Great Wolf Lodge or other permanent improvements on that land. Thurston County’s property taxes on the Grand Mound Property are therefore invalid under § 465 and Mescalero. Confederated Tribes, 724 F.3d at 1157.
Facts of the Case
The Great Wolf Lodge is located in Thurston County on land owned by the United States and held in trust for the Chehalis Tribe, and the Lodge itself (i.e., the permanent improvements and buildings on the property) is owned by CTGW, LLC, an entity in which the Chehalis Tribe has a 51 percent ownership interest.
Prior to issuing final guidance, the Department will be seeking input from all interested stakeholders regarding the property tax implications of the Ninth Court’s decision. The Department’s intent is to issue a Property Tax Advisory on the application of the decision within six months. In the interim, county assessors should apply the decision based on the specific facts presented to the Ninth Circuit. That is, the immunity from state and local taxation provided by Mescalero and 25 U.S.C. § 465 should be afforded to permanent improvements located on land held in trust by the United States for a Tribe or Tribal member that is leased to a Tribe, individual Indian, or an entity in which the Tribe or Indian has at least a 50 percent ownership interest.