An effort by the Fort Berthold Reservation to impose new taxes may be backfiring. The reservation needs to reconsider the tax plan.
The new 7 percent tribal sales tax is on top of the state's 7 percent sales tax on alcohol that was imposed on the 22 non-American-Indian-owned businesses selling alcohol on the reservation. The new rules also require permits and require records and businesses to be open for inspection by the tribe. Many business owners are more upset over the records and inspection requirements than the additional tax. Alcohol distributors also must follow the new rules and apparently delivered the final shipments of alcohol last week.
The Four Bears Casino, where the most alcohol sales occur, has had its supply cut off. This apparently wasn’t the intention of the Mandan, Hidatsa and Arikara tribes on the reservation. The sales tax comes on the heels of an announcement that the Three Affiliated Tribes would impose a higher tax rate for oil drillers.
The tribes say the tax money is needed for road repairs, law enforcement and to deal with other impacts from oil development on the reservation. They have been using the revenue from oil development to make improvements.
They are building a new courthouse and law enforcement building; they also hope to build a wellness-recreation center; there are plans to invest $5 million in a water park near the 4 Bears Casino and Lodge; an improved swimming pool and splash pad in Parshall; plus plans for a $10 million assisted living facility for 20 elders in Parshall. The tribes plan to help the young with an attended care facility for up to 12 children and juveniles. These are kids who haven't broken the law but have been left with no supervision. Another ambitious project underway is a $25 million drug treatment center in north Bismarck.
So the new taxes shouldn’t be looked at as a money grab. It’s part of the plan to improve the reservation. Unfortunately, there appear to be flaws in their efforts.
The Tribune doesn’t believe the intent was to create a dry reservation. Certainly they didn’t want to cut off the alcohol supply to the recently expanded casino. The casino needs alcohol to continue to draw crowds for concerts, conventions and the daily gambling operations.
It’s likely the new rules and taxes could face a legal challenge. Some retail alcohol business owners have apparently pooled money to hire an attorney to fight the tribes' rules. They are more concerned about subjecting their businesses to tribal rules than the higher taxes.
Bob Nelson, president of Fargo-based liquor distributor Johnson Brothers, told the Associated Press his company has halted sales until the tribal rules are changed. "Our greatest concern is that these rules would subject us to legal liabilities that we don't face anywhere else," he said in a statement. "Unfortunately, until those rules are actually changed, the risk to our business is too great."
The tribes need to rethink the new rules and sales tax. They need to meet with business owners and work on a compromise. There should be a way to impose a tax without the intrusive rules. While some may see benefits in a dry reservation, it could lead to more problems due to illegal sales. This doesn’t appear to be an impossible situation, just one that will take some time and discussion.