New WPC Study: State Gives Away Gas Taxes to Indian Tribes

A new Policy Brief from Washington Policy Center's (WPC) transportation director Michael Ennis shows how Indian tribes in Washington use negotiated gas tax reimbursements from the state to undercut non-tribal gas stations.

WPC conducted a price survey of 18 tribal stations located in 5 major metropolitan areas around the state. This research tested the idea that tribally owned fuel stations charge less for gas than their non-tribal counterparts. WPC's research and analysis found that:

New tribal gas tax compacts negotiated by the governor require tribal fuel station operators to collect the state’s full gas tax rate, but then state officials give back 75%, or 28 cents per gallon, to tribes.

Since 2000, the number of tribal gas stations with agreements has more than tripled from an estimated 14 to 51.

Under the new agreements, the amount of gas taxes given to tribes has grown exponentially, from $5.31 million in 2005 to more than $28.14 million in 2010.
Since 2005, motorists lost more than $90.55 million in gas tax revenue to Indian tribes.

Tribal fuel station operators are consistently underselling regional non-tribal competitors by an average of 7 to 12 cents per gallon for unleaded fuel and 15 to 26 cents per gallon for diesel in most areas of the state.

Tribal station operators charge up to 11.5% less for fuel than their non-tribal competitors.

In one example, a tribal station is estimated to have sold fuel at a loss of 2.5 cents per gallon.

The compacts allow state gas taxes to be used for non-highway purposes, subsidizing general tribal services.

Under the compacts, details of the tribal audits that are required to ensure compliance are kept secret from the public and state DOL officials.

The compacts allow tribes to undercut private fuel station operators, give away needed revenue for roads, harm taxpayers by allowing gas tax revenue to be spent on non-highway purposes, and hurt non-tribal businesses by creating an unfair playing field among fuel station operators.

Read WPC's new report State Gives Away Gas Taxes to Indian Tribes.

Watch the KOMO 4 News story spurred by WPC's research.