SLVMS Wins $20 Million Tax Appeal

Aug 19, 2015

Related Practices: Business and Litigation

Stokes Lawrence Velikanje Moore & Shore attorneys Brendan Monahan and Andre Penalver successfully argued that a business owned by a member of the Yakama Nation and licensed by the tribe is exempt from Washington state gas taxes and licensing requirements.

Cougar Den is a fuel wholesaler that has been importing fuel tax-free from Oregon since 2013. The company sells fuel to other businesses owned by tribal members. Last year, the state Department of Licensing began issuing Cougar Den tax assessments for the imported gasoline, claiming the company owed $20 million in back taxes and penalties. Andre and Brendan researched the Yakama Nation’s Treaty of 1855, which protects tribal members’ right to travel freely for the purposes of trade. Based on that treaty right, they argued that Cougar Den was exempt from any of the Department’s taxes or licensing requirements. Yakima County Superior Court Judge Michael McCarthy agreed, ruling that because a federal treaty preempts state law, the state lacks the right to tax Cougar Den’s fuel.