taxation – Turtle Talk

Under McClanahan v. Arizona State Tax Commission, States are categorically preempted from taxing the income of an Indian who lives within his own Tribe’s reservation and gains his income from reservation sources. Later cases have distinguished McClanahan, holding that the income of Indians who live and work within a different Tribe’s reservation is generally taxable by the State. State income taxation of these non-member resident Indians poses a number of problems for individuals, Tribal governments, and tribal sovereignty as a whole. This Comment argues that to push back against these problems, Tribes ought to enter into membership reciprocity agreements that allow non-member resident Indians to become Tribal members, thus exempting them from state income taxes under McClanahan’s categorical rule.

Emiliana Almanza Lopez has published “Tribal Sovereignty, Sales Tax, and States Interference: Why Tax Compacts May Be the Best Way Forward” in the Minnesota Journal of Law & Inequality. Here is the abstract:

Tribes as sovereigns have the power of taxation. When states seek to impede this power by imposing their own taxes on non-member transactions on Reservations, Tribes must decide if imposing their own Tribal tax outweighs the risk of increased prices deterring business and business partnerships. This is the issue of double taxation. This Note investigates paths of remedy that address the burden of double taxation specific to sales taxes. Specifically, it looks at tax preemption, litigation, and policy. Preemption is difficult, and the existing case law framework on state tax preemption in Indian Country is complex, fact specific, and generally favors the state. Current federal policies fail to address this issue, and states are unlikely to preempt their own taxes without gaining something in return. Tribe-state tax compacts offer a compromise that releives some of the burden borne by Tribes, but also requires concessions. This Note argues that while imperfect, these tax compacts may be the best remedy to double taxation in Indian Country and offers suggestions for how these binding agreements between sovereigns can be used to enforce state respect for Tribal sovereignty.

IRS Finalizes Tribal General Welfare Benefits Rule

December 16, 2025Matthew L.M. Fletcher

Here:

Final Rule Download

Stroble v. Oklahoma Tax Commission — State Brief in Opposition to Cert

December 5, 2025Matthew L.M. Fletcher

Here:

Oklahoma Brief in Opposition

Cert petition here. Amicus briefs in support of the petition here.

New Scholarship on Tribal Taxation Authority

November 13, 2025Matthew L.M. Fletcher

Alex Zhang has posted “The Other Taxation: Tribes, Territories, and Fiscal Autonomy,” forthcoming in the Columbia Law Review, on SSRN.

Here is the abstract:

Native Americans pay taxes. Residents of the territories do not. Both live with the legacy of American imperialism. Both seek the elusive fiscal self-governance and autonomy promised by Congress. The Supreme Court—through preemption, the plenary-power doctrine, and tax interpretive principles—has hollowed out the Native tax base, forcing tribes to compete fiercely with Congress, states, and localities for revenue. By contrast, territorial residents pay no federal or state taxes on territorial-sourced income by edicts of Congress and geography. But such tax exemption enabled the creation of incentive regimes that have only invited more criticism of subordination. This Article argues that the conceptual underpinnings of the divergent tax treatment of tribes and territories are unsound. Under a more robust vision of fiscal autonomy, judicial limits on Native tax sovereignty are misguided. The territories’ wide latitude in designing revenue streams merits heightened scrutiny. While imperfect, a uniform, nonrefundable federal income-tax credit for tribal and territorial taxes paid is a promising path forward. This Article thus provides the first systematic study of subfederal taxation beyond states and localities—the “other” American taxation often overlooked in scholarship.