The taxation situation between Shelter Bay and the Swinomish Tribal Community resulted from a court decision in 2013.
“2013 The United States Court of Appeals for the Ninth Circuit determined in Confederated Tribes of the Chehalis Reservation v. Thurston County Board of Equalization, 724 F.3d 1153 (9th Cir. 2013) that where the United States owns land covered by 25 U.S.C. § 465 and holds it in trust for the use of a tribe or tribal member, permanent improvements on that land are exempt from state and local property taxation. This is true without regard to the ownership of the improvements.”
Also known as “The Great Wolf Lodge decision.”
State and local property taxes on permanent improvements built on land owned by the United States and held in trust for an Indian tribe or tribal member are preempted by § 465. This is true without regard to the ownership of the improvements. Thus, state and local governments cannot assess property tax on permanent improvements built on trust land.
As a result of this decision, in 2014 Shelter Bay was removed from the Skagit County tax roll. At that time Shelter Bay property was no longer assessed by the county and residents no longer paid county taxes.