PORT ANGELES — Clallam County Public Utility District will soon be figuring out how to best deliver a $456,000 tax refund to tribal members living on their own reservations.

The money owed represents the total privilege and utility taxes collected from tribal members during a five-year period, said Shelley Burgett, general manager and treasurer-controller for the utility district.

In 2002, after negotiations between the state, tribes and federal government, the state notified the utility district to stop collecting two taxes from tribal members.

Under federal law, the state and local taxing districts cannot tax Native Americans or tribes who are on their own land. However, tribal members must pay taxes if they are living on non-tribal land.

The two taxes — the “privilege tax,” which is levied against public utility districts by the state in lieu of property taxes, and a utilities tax — were included in the rates the district charges its customers, including those living on tribal lands, until the end of 2005.

A portion of the refund money, $68,646, was cycled through the state, back to Clallam County, then disbursed to various taxing districts, said county Treasurer Judy Scott.

The rest of the refund money was delivered to the utility district from the state, Burgett said.

Although the utility district was notified to stop collecting the taxes in early 2002, personnel turnover in critical departments and the complexity of separating the tax out of the rate, as well as working with tribes to determine how many customers are due a refund, has taken time, Burgett said.

“We knew it was going to be pretty involved,” Burgett said.

“It’s not an overnight process.”