Tribal exemption from state gas taxes means some of the cheapest fuel can be found on Native American reservations

(SeaPRwire) –   Junelle Lewis sought relief from the elevated gas prices in the Seattle area, which were exacerbated by the conflict in Iran. An application on her phone directed her to the Tulalip Reservation, located north of the city and approximately half an hour from her residence.

She made the decision without hesitation.

“I intentionally drove here just for the gas,” Lewis stated while refueling her Chevrolet Suburban at the Tulalip Market this week for $4.84 per gallon (3.8 liters), a price about 75 cents lower than those in her vicinity. “Gas prices are outrageous. However, I’ve discovered, honestly, over the years, that this particular gas station is cheaper than many around here. Probably the cheapest.”

Lewis is not the only motorist who has realized that some of the most affordable fuel can be found on Native American reservations.

Particularly in states like California, New Mexico, New York, Oklahoma, and Washington, where numerous tribally owned stations are situated, including some along busy travel routes, tribes that are exempt from state fuel taxes can offer prices significantly lower than competing stations nearby.

Rising gas prices encourage bargain hunting

Applications such as Gas Buddy are making it easier than ever to locate the least expensive gasoline.

Nationwide, gasoline prices have increased by more than $1 since the conflict in Iran commenced on February 28, reaching an average of $4.15 per gallon, according to AAA.

Prices have been higher in the past, exceeding $5 during the summer of 2022. However, economists anticipate that prices will continue to rise and contribute to inflation in the coming weeks as geopolitical tensions persist.

Nevertheless, deals can be found at many of the nearly 500 tribally owned convenience stores with gas stations across the United States.

Fifty-five of these are located in California. At the Chukchansi Crossing Fuel Station & Travel Center, situated between Fresno and Yosemite National Park, the price of gas at $5.09 was 60 cents less than at nearby stations.

Jamie Cross, a resident of New Mexico, typically finds savings on the Mescalero Apache Reservation, where gas prices were as low as $3.79 this week.

“I hope prices don’t go any higher,” Cross said on Thursday.

In eastern New York, within the Cattaraugus Indian Territory located between Buffalo and Erie, Pennsylvania, the lowest gas price was approximately $3.65 at more than half a dozen stations, which was 50 cents less than in neighboring towns.

Tribal lands benefit from fuel tax exemptions

The question arises: how do tribes achieve these lower prices? The answer lies in tax exemptions.

Generally, tribes are required to pay the federal fuel tax, which is 18.4 cents per gallon for gasoline and 24.3 cents per gallon for diesel, and pass this cost on to consumers. State fuel taxes, however, are a different matter.

For over a century, U.S. courts have consistently ruled that states do not possess the authority to levy taxes on Native Americans within their tribal lands, according to Dan Lewerenz, an assistant law professor at the University of North Dakota who specializes in Native American law.

“The Supreme Court has consistently upheld this principle, and it remains one of the most enduring tenets of federal Indian law,” Lewerenz stated.

Federally recognized Native American tribes are located in 35 states, where state gasoline taxes range from 9 cents per gallon in Alaska to 71 cents in California.

From this point, the situation becomes complex, depending on where the fuel is taxed—whether at fuel terminals or when distributors purchase or sell fuel—and various agreements between states and tribes.

Court decisions play a significant role. In 2005, the U.S. Supreme Court determined that off-reservation distributors in Kansas could charge state tax on sales made to tribes for fuel intended for on-reservation use. However, in 2019, the Supreme Court ruled that an 1855 treaty between the U.S. and the Yakama Nation, which guaranteed the free passage of tribal members and their goods, prohibited the imposition of state fuel taxes on tribal lands in Washington state.

“This is somewhat distinct from the principle that Native Americans are not taxed within Indian Country, as this particular treaty also reserved certain off-reservation rights for Native Americans,” Lewerenz explained.

Gas sales are just one revenue stream for stores

The profitability of convenience store gas sales is surpassed by the revenue generated from customers coming inside the stores.

Selling snacks contributes to profits. However, tribal businesses are increasingly offering groceries in areas that would otherwise be considered “food deserts,” located far from traditional grocery stores.

“At times, these gas stations and convenience stores serve as the most accessible and best option for purchasing affordable food or household items,” said Matthew Klas, associated with the Minneapolis-based consulting firm Klas Robinson Q.E.D.

Klas conducts market research and provides consulting services to tribal businesses, and he tracks the 245 tribes nationwide that, as of 2025, operate 496 convenience stores with gas stations.

Oklahoma, California, Washington, Arizona, New Mexico, Wisconsin, Michigan, and New York have the highest numbers of these establishments. Some tribes, including the Choctaw Nation in Oklahoma and the Oneida Indian Nation in New York, operate their own chain of stores.

Additional revenue streams include drive-through smoke shops, car washes, and truck stop amenities. Furthermore, casinos play a role, with 205 tribally owned gas stations situated at or near casinos.

Some tribal casinos are comprehensive resorts that include gas stations. Conversely, some tribal gas stations function as a type of casino known as “gasinos,” which feature a limited number of gambling machines.

Tribally owned businesses represent a significant source of revenue for Native American reservations. On the Tulalip Reservation near Seattle, increased gas sales are being reinvested into the community, helping to fund essential services such as roads, police, healthcare, education, housing, and other needs, according to a statement from Tanya Burns, CEO of the Tulalip Tribes Federal Corporation.

“Similar to any government, we provide vital services to our constituents,” Burns stated.

Savings are not the sole benefit

“It’s terrible,” Todd Hall of Paden, Oklahoma, remarked about diesel prices as he spent approximately $90 to fill his tow truck at the Citizen Potawatomi Nation gas station, located about 30 miles (48 kilometers) west of Oklahoma City.

However, he added, “They’re cheaper here than anywhere else.”

Hall paid $4.57 per gallon for diesel, noting that prices exceed $5 in many surrounding areas.

Mark Foster mentioned that he saves about $5 per week by purchasing fuel at the tribally owned gas station. Nevertheless, he remains a loyal customer because he believes the tribe is a strong community partner.

“I appreciate the way the tribe operates,” he said. “And the price is good as well.”

At the Tulalip Market north of Seattle, Jared Blankenship expressed frustration not about the prices, but about the necessity of paying for gas at all.

“Yeah, well, my electric car was just totaled,” Blankenship said. “So this is unfortunate. This is new. It’s either Costco or looking for wherever’s cheap, like the rez. So, here we are.”