CHEHALIS: Judge cancels trial over Great Wolf tax rift

A federal judge in Tacoma has canceled a trial scheduled to begin next month in the Great Wolf Lodge property-tax dispute.

U.S. District Judge Benjamin Settle heard oral arguments last week related to dueling motions for summary judgment that will decide the case. He is expected to rule in the next few days.

At that hearing, Settle left open the possibility that a bench trial might proceed if issues of fact require it.

Lawyers for both sides agreed the case could be decided through his rulings on the motions because there’s no dispute of the facts, but rather issues of law and the applications of the law.

In 2005, the Chehalis Indian tribe and Great Wolf Resorts Inc., a publicly traded company, formed CTGW LLC under Delaware law to develop and operate the lodge, which includes an indoor water park, a hotel and a conference center. The tribe is the majority owner in the limited-liability company and leases its tribal land to CTGW. The lodge is on a 43-acre parcel between Interstate 5 and Old Highway 99 in South Thurston County.

The property itself is exempt from property taxes because it’s on tribal land, but there’s disagreement on whether the improvements on it are subject to taxes. The tribe sued the county in September 2008 after Thurston County Assessor Patricia Costello moved to tax the improvements.

Specifically, the case has hinged on whether the state’s interest in taxation outweighs the federal and tribal interests against such taxation. Federal pre-emption severely limits the ability of states to impose taxes in Indian country.