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Bill To Enact Alcohol Tax Squeaks By Navajo Lawmakers

Bill To Enact Alcohol Tax Squeaks By Navajo Lawmakers


Source: Law360

By Caroline Simson

July 28, 2015


The Navajo Nation has approved legislation proposing a 3.25 percent tax on alcoholic beverages sold in its casinos, which will be used to combat drunk driving on the Navajo reservation.


The tax, approved by the Navajo Nation Council on July 23 by a 10-9 vote, will apply to alcoholic beverages that are sold individually, so the responsibility for payment will be at the consumer level. The legislation, which comes on the heels of a controversial initiative earlier this year to impose a 2 percent tax on junk food, still must be signed by Navajo Nation President Russell Begaye.


The expected annual tax revenue of $73,000 will be used to fund sobriety checkpoints on the reservation, according to Council Delegate Edmund Yazzie, who sponsored the legislation. The tax is expected to take effect no later than Oct. 1.


Yazzie told Law360 on Tuesday that the initiative has been in the works for close to two years. He said that the legislation became an obvious choice after reviewing approaches taken by other local jurisdictions, and characterized the law as “one stepping stone” in the nation’s efforts to combat problems associated with alcohol.


The bill had faced opposition from council members who worried about the relative costs of collecting the tax compared to the projected annual revenue from the initiative. Moreover, $73,000 a year might not be enough if additional personnel have to be hired to conduct the checkpoints, according to Council Delegate Seth Damon.


Nevertheless, other council delegates stressed that rejecting the proposed tax could send a message that the council is against law enforcement initiatives.


“$73,000 might not sound like a lot to you, but it means a lot to the officers who want to put up their DUI checkpoints,” said Delegate Otto Tso in a statement. “We need to get dollars to them so they can continue to save lives.”


Currently, the nation operates four casinos: three in New Mexico, and one in Arizona. Alcohol is generally not sold on the reservation except in three of the four casinos, Yazzie said.


The tax follows on the heels of the Navajo Nation’s controversial “junk food tax,” enacted earlier this year in an effort to steer its citizens toward healthier food options.


The junk food tax, which went live on April 1, came in the midst of a massive health crisis for the Navajo Nation, which spans three states and is home to more than 200,000 people. Obesity rates soar as high as 60 percent in some parts of the nation, and roughly 20 percent live with diabetes, according to the junk food law, which is called the Healthy Dine Nation Act of 2014.


Despite these numbers, the junk food tax battled severe opposition and was previously defeated, highlighting the difficult, delicate and sometimes defiant battle that ensues when lawmakers try to influence consumer behavior.


Since the nation already imposes a 5 percent sales tax on food, the junk food tax imposes an additional 2 percent tax on high-calorie snacks and foods with minimal nutritional value, bringing the total tax on junk food and sugary snacks to 7 percent.


This tax comes after the nation, in the spring of 2014, eliminated its 5 percent tax on fresh fruits and vegetables in a push to make healthy foods more affordable in Navajo country, which is classified by the U.S. Department of Health as a food desert that lacks access to fresh produce and healthy foods.


Yazzie was careful to make clear in his July 23 statement that the alcohol tax will not interfere with the junk food tax, since it will only impose the tax on individuals who consume alcohol within a casino.