Issues about taxes needs clarified
The Valley Journal re-printed an informational article from the Montana Free Press newspaper on Feb. 10 related to Lake County’s attempt to have the Temporary Tribal Tax Exemption statute repealed by the 2021 legislature. I would like to clarify some of the points raised in the article.
The Temporary Tribal Tax Exemption legislation was passed by the 2011 legislature with an effective date of Jan. 1, 2012. The statute allows a tribe to apply for a five-year tax exemption for fee properties purchased by the tribe while the properties are being moved into trust status. A completed trust application must be pending. If the properties “time out” or are not accepted into trust during the five- year tax vacation, the properties are returned to taxable status.
The article stated that moving properties into trust is, “a process some counties have slowed by objecting to the trust applications themselves.” The inference is that some properties are “timing out” due to protests of trust applications by the affected county. By Federal statute, local governments must be notified when the Bureau of Indian Affairs is considering accepting a property into trust. This notice makes local governments aware that if a property is accepted into trust, the property will be permanently removed from taxable status.
The tax liability for the exempted property is then assumed by the remaining taxpayers. Lake County protests all transfers of land into trust as it has a negative impact on remaining taxpayers, but the protesting does not slow down, or impede, the trust process. Not a single property on the Flathead Reservation has “timed out” or been denied trust status due to a protest by Lake County.
In 2016, Lake County did file a Notice of Appeal to the Flathead Agency, BIA, of a trust application submitted by the Confederated Salish and Kootenai Tribes for six properties formerly known as “Sunny Shores.” These properties now comprise the Big Arm Marina and Grill and RV Resort. The county’s appeal was based on the fact that an environmental assessment had not been prepared for the properties prior to development. The county noted that extensive renovation and modifications to the properties were being made, although the tribe had asserted that they had no plans for changing the use of the property after purchasing.
Among the county’s concerns were the impact on the water quality of Flathead Lake and removal of wastewater from the numerous RV sites. In 2018, the Portland BIA office agreed with the county and the trust application was remanded, or set aside. The Montana Free Press article included a claim by a Montana Department of Revenue spokesperson that, “he wasn’t aware of a single land trust application being denied within the five-year exemption period.” This statement is false as the county notified the MDOR twice by letter in April of 2018 that the trust application for the properties had been denied.
The county has raised the issue of tax equity during the legislature’s deliberation on whether or not to repeal the statute. County property taxpayers have seen significant increases in taxes since 2012 as 149 properties have been granted using Temporary Tribal Tax Exemptions in addition to the estimated two million loss of taxes from the former Kerr Dam. Many of our taxpayers are retired and living on limited incomes and ever increasing property taxes presents a hardship they cannot control. The question of who is better able to pay taxes on CSKT fee properties, CSKT or private citizens, must be asked.