Fuel Tax Lawsuit Against Washington State Dismissed

The retailers, which allege that the state has unlawfully paid $90 million in fuel tax funds to Native American tribes, will appeal.

February 09, 2011

OLYMPIA, Wash. (UPI) - A county judge dismissed a lawsuit filed against Washington state by a group of gasoline station owners claiming that the state has refunded $90 million to Indian tribes that didn??t pay fuel taxes, UPI reports.

Tribal members do not have to pay the tax at reservation gasoline stations, but the Automotive United Trades Organization (AUTO) alleges in its suit that the state has given refunds for taxes Native Americans did not pay in the first place.

The lawsuit points out that the refund payments allow tribal gasoline stations to set less expensive fuel prices "in the range of 5 cents or more per gallon," which creates an unfair advantage for those stations. Also at issue is whether the payments are in breach of the Washington Constitution, which earmarks the fuel tax "exclusively for highway purposes."

The judge rejected the suit because tribes cannot be sued in state or federal court. The state had argued that the tribes are "indispensable parties" to the suit.

"From a legal standpoint, it still boggles my mind," said Phil Talmadge of the judge??s dismissal. Talmadge is a lawyer for AUTO. Attorneys for AUTO said they will file an appeal to the state Supreme Court.

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