New ND law offers alcohol tax sharing agreements with tribal nations

BISMARCK, N.D. (Valley News Live) - Gov. Doug Burgum has signed legislation allowing tribal nations to enter into agreements with the State of North Dakota to share revenue from alcohol taxes on tribal lands, resolving a longstanding issue.

Under Senate Bill 2377, each of the five tribal nations in North Dakota will have the opportunity to enter into an agreement with the state to impose a single tax on alcoholic beverages sold at the retail and wholesale levels within their respective reservations. Tribal nations that adopt the alcohol tax will keep 80% of the tax revenue, while the state’s general fund will receive 20%.

The Governor’s Office has worked with tribal nations, legislators and the Office of the State Tax Commissioner for several years to negotiate an acceptable framework for revenue sharing agreements and avoid a situation in which both the state and tribe could levy separate alcohol taxes on reservations.

“This bill creates a fair and uniform framework for taxing alcohol on reservations while ensuring that the bulk of the revenue goes to the tribes to support addiction treatment and other programs,” Burgum said.

“This bill provides a fair mechanism to share taxes generated from the sale and consumption of alcohol on the reservation,” MHA Chairman Mark Fox said. “The tribal share collected under SB 2377 will help develop and provide resources for addiction treatment, law enforcement, community safety, and wellness programs.”

The bill was approved unanimously in both the House and Senate. It improves upon an alcohol tax revenue sharing bill that passed in 2019 but hadn’t been utilized.

The legislation builds upon previous state-tribal tax agreements signed by Burgum in recent years. A compact signed with MHA in 2019 and ratified by the Legislature changed how the state and tribe share tax revenue from new oil and gas activity on trust and fee lands. Legislation signed in 2021 provided a framework for the state and MHA to share tax revenue from oil wells that straddle the boundary of the Fort Berthold Reservation, while another bill in 2021 authorized the governor to enter state-tribal agreements for sales, use and gross receipts taxes.