Lake County questions dam’s tax status
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POLSON – Lake County filed court documents in late August asking the Montana Department of Revenue to tax the Selis Ksanka Qlispe Dam.
The county states the loss of revenue from the dam affects taxpayers of Lake County and results in a significant reduction of services from many entities including fire departments, law enforcement, and school districts.
According to an affidavit, the county collected property tax revenue from the dam for an excess of 75 years. In 2015, the dam was transferred from Northwestern Energy to the Confederated Salish and Kootenai Tribes, which removed the dam from the county’s taxable jurisdiction due to the state’s limited ability to tax property held in trust by the United States on reservations.
The county alleges that the dam is within the taxable jurisdiction of the county as per Montana Constitution Article 15-6-201. The article states tax-exempt tribal property may not be: operated for gain or profit, leased or sold by a taxable individual or held by a tribal corporation except for educational purposes.
The county has questioned whether the property the dam sits on is on tribal trust property, as it was once owned by non-tribal entities in the past. They also assert that a deed for the property issued to North Western Corporation, former dam owners, states that the grantee is subject to property taxes and assessments, including special improvement district assessments for 2016 and subsequent years.
The County noted that the state Department of Revenue has refused to appraise, assess and equalize the valuation of the property. It was also stated that the department solicited input from the owners of the dam on the tax issue without input or responses from the county. The department made a final decision that the property was exempt from tax.
The county filed an application for Writ of Mandamus in district court against the State of Montana’s Department of Revenue and Director Michael Kadas, which is basically a court order telling another government official to fulfill their duties. Lake County Attorney Steven Eschenbacher and Civil Deputy County Attorney Walter Congdon are working with the county on the action.
The Montana Department of Revenue submitted a letter to the attorneys stating that the documents the county provided did not establish that the land is not currently owned by the United States in trust for the benefit of CSKT.
“Federal Indian law prohibits states from imposing state taxes on tribes within the exterior boundaries of the governing tribe’s reservation, unless expressly authorized by congress,” Kadas states in a letter to county attorneys. “The Department is unaware of any source of Congressional authority that supports that state property taxation for which you appear to advocate.”
Kadas noted that Montana Constitution Article 15-6-201 applies to tribal fee land Congress has already authorized states to tax and is “irrelevant for purposes of evaluating whether the State is federally preempted from taxing tribal trust land … .” He stated that it appears the county and the state will continue to have a difference of opinion.
CSKT Chairman Vernon Finley sent a letter to Kadas outlining the tribe’s research on the subject. He states that the Internal Revenue Service concluded after analyzing the tax status concerning corporations that an Indian tribal corporation shares the same status as the Indian tribe and is not taxable.
CSKT determined that it would pay property tax levied against two parcels of fee land acquired from the dam turnover of about $4,000 until that land can be put in trust status.
Lake County Commissioner Bill Barron and CSKT Representative Rob McDonald have said the two governments are sitting down and talking about funding issues and will continue to negotiate until the matter is settled.
