Blue Stone Presents Tribal Taxation Plan
By Joe Morey
The LCO Tribal Governing Board (TGB), declaring to uphold our tribal sovereignty through the right to charge various taxes that would result in additional revenues to the tribal government to support services for the membership, hired Blue Stone Strategy Group in July to develop and implement a tribal tax plan. Just last month, Blue Stone presented a tax charter and ordinance to the TGB, which has already been reviewed by the LCO Legal Department.
LCO Chairman Louis Taylor said the next step in the tax plan is to get support from the tribal membership. He indicated there may be a referendum asking the Lac Courte Oreilles membership if the plan should be implemented.
Blue Stone is recommending a couple of new taxes at tribal outlets that could add $500,000 to $750,000 in additional revenue to the tribe. The first is a Cigarette Tax of 25 cents per pack and a 5% sales tax on all convenience items at our retail outlets, which would include cigarettes. The cigarette tax is estimated to bring in $250,000 per year and the 5% sales tax on cigarettes (30 cents per pack) alone could generate an additional $250,000 or more. The 5% sales tax on additional convenience items could bring in $273,000 annually.
In Blue Stone’s analysis of the local cigarette market, they showed that the tribe sells a pack of cigarettes at $6.09 while Kwik Trip in Hayward sells them at $9.12. By adding 55 cents tax on cigarettes they would still remain under $7 per pack, and much cheaper yet than the Hayward market.
There are other taxing options the tribe could impose, which could be added to the tax plan at a later date, but Blue Stone said the tribe shouldn’t tax liquor sales because it would cause LCO’s retail operations to be in a non-competitive situation.
“Now that C2 is in trust we can start selling tobacco at a reduced price and initiate our own tax plan,” LCO TGB member Tweed Shuman said. “By adding these two simple taxes at our retail outlets, we can add a substantial amount of revenue to the tribe which will bolster the tribal budget in providing more services for our members.”
Shuman added, “Tribal member needs have increased yearly. Now that we are realizing these increased revenue streams, we are able to meet those needs more effectively, such as through more funding to the Boys and Girls Club, transportation opportunities, day care and assisted living facilities, elder services and other service organizations. These extra funds will also help us increase wages for our front line employees.”
To exercise our right to tax only strengthens our sovereignty, Shuman noted. “In addition, this added revenue stream will increase funding for our vital government services.”
Blue Stone’s report states it is the inherent sovereign authority to regulate the conduct of persons and activities within its territory and jurisdiction including the control of economic activity within its boundaries which includes the Tribe’s taxing and regulatory authority.
“Taxes are necessary to sustain governmental services and programs incident to the preservation of Tribal existence,” the report stated. “And taxes provide sources of revenue earmarked for and as a source of capital for economic development.”
Part of the Blue Stone recommendation includes establishment of a Department of Taxation as a governmental department of the tribe and the appointment of a tax administrator.