taxation

Guest Post: Indian Country Completely Shut Out of New Markets

ilpc6 Comments

INDIAN COUNTRY COMPLETELY SHUT OUT OF NEW MARKETS TAX CREDITS

Gavin Clarkson

Not a single Native Community Development Enterprise (NCDE) was selected for an award in the most recent round of New Markets Tax Credit (NMTC) allocations (just announced by the CDFI Fund of the US Department of the Treasury) despite at least one Native-sponsored applicant and one non-Native applicant totally dedicated to Indian Country deployment. These two CDEs’ allocation requests were peer reviewed and ranked ‘highly qualified’ to be eligible for an allocation.

The NMTC program, which annually allocates about $3 Billion in Federal Tax credits that are sold to private investors for investing in low income communities’ economic development projects, has allocated over a $100 Billion in tax credit authority since the program’s inception in 2003. Indian Country NCDEs have only just started to receive a small portion of the annual allocations, in recent years. In total, Native CDEs have received about $250 Million in tax credit authority, or about 0.25% of total investment authority. While small in proportion to total NMTC allocation, this amount has made the NMTC program a significant source of Indian Country investment capital in only a few short years. Until this year, that is.

The failure to allocate ANY NMTC to Native CDEs in the most recent competition puts hundreds of millions of dollars of Indian Country pipeline projects at risk and highlights the need for the Federal Government to more directly address Indian Country’s rapidly expanding capacity to utilize NMTC. There is precedence at the CDFI Fund to solve this problem: Carve Out a portion of each NMTC allocation for competitive allocation just among Native CDEs similar to the already existing carve out that exists in the Native American CDFI Assistance (NACA) program, which reserves other elements of the CDFI Fund’s programs just for Indian Country. Without such a carve out, Indian Country will continue, in any given year, to be at risk of being crowded out of the intense competition for NMTC by other low income communities, whose larger populations support the formation of more CDEs that can enter, and potentially, win in the annual NMTC competition.

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Miller v. Wright Cert Petition

Matthew L.M. Fletcher1 Comment

Here:

Miller v Wright Cert Petition

Questions presented:

The questions presented in this case are:
1. Whether Indian tribal immunity from suit allows the Indian tribe, a price fixing competitor, to be immune from federal anti-trust laws?
2. Whether the officials of an Indian tribe, acting beyond their authority, can be protected by tribal immunity when prospective relief is sought?
Lower court materials here.

 

Federal Court Finds Unkechauge Reservation Smoke Shops Liable for Violations of Federal Law in City of New York v. Golden Feather Smoke Shop

Matthew L.M. Fletcher4 Comments

Here are the materials:

DCT Memorandum & Order

NYC Motion

Remaining Defendants’ Cross-Motion

An excerpt:

For the reasons below, the Court grants the City summary judgment as to defendants’ liability under the CCTA and the CMSA. With respect to relief, the Court (1) grants the requested permanent injunction against defendants’ “purchase, receipt, possession, sale, distribution, offer and advertisement of unstamped cigarettes-even to tribe members for personal use”; (2) awards damages as against the Peace Pipe and TDM defendants; (3) awards civil penalties as against the Red Dot defendants, the amount of which will be determined at a later hearing; and (4) awards the City attorney’s fees, the amount of which will be determined in the first instance by Magistrate Judge Vera Scanlon by report and recommendation.

And the bad news (liability):

For the reasons stated, the Court concludes the following: As to defendant Phillips, the City is directed to clarify whether it is still seeking monetary relief against him, and if so, to submit further damages briefing that identifies the amounts the City is seeking against Phillips only. As to the Peace Pipe, TDM, and Red Dot defendants, the Court finds that the City is entitled to summary judgment on (1) defendants’ liability under the CCTA and the CMSA, and (2) its requested permanent injunction against defendants’ “purchase, receipt, possession, sale, distribution, offer and advertisement of unstamped cigarettes-even to tribe members for personal use.” In addition, the Court awards to the City (1) damages in the amount of $10,041,075 as against the Peace Pipe defendants and $450,000 as against the TDM defendants; (2) civil penalties as against the Red Dot defendants, the amount of which will be determined at a later hearing; and (3) attorney’s fees, the amount of which will be determined in the first instance by Magistrate Judge Scanlon by report and recommendation.

Prior posts here and here.

 

Federal Court Rules Against King Mountain Tobacco in Dispute with Washington State

Matthew L.M. Fletcher1 Comment

Here are the materials in King Mt. Tobacco Co. v. McKenna (E.D. Wash.):

DCT Order

Washington AG Motion for Summary J

King Mountain Opposition

Washington AG Reply

King Mountain Tobacco Motion for Summary J

Washington AG Opposition

King Mountain Reply

An excerpt:

Based on the finding above that the finished cigarettes and roll-your-own tobacco [24] are not directly derived from trust land, King Mountain can prove no set of facts in support of the claim that Washington’s escrow statutes are in conflict with the Treaty or federal law which would entitle Plaintiffs to relief. Escrow is required for all non-exempt sales subject to the State’s cigarette taxes, regardless whether those sales occur on or off the reservation. Escrow isnotrequired for tax exempt King Mountain sales of cigarettes purchased directly by enrolled members of federally recognized Indian tribes from an Indian tribal jurisdiction of the member’s tribe for the member’s own use. If there were any past sales that were exempt from state excise tax, but for which King Mountain has deposited money into escrow anyway, King Mountain has failed to offer evidence in support of a refund claim and the court expresses no opinion concerning the same. Accordingly, King Mountain, a NPM, is required to comply with the escrow statute for all past and future sales deemed “units sold.”

IRS Throws Open Door to Tribal Participation as Owners of Renewable Energy Projects

Matthew L.M. Fletcher

Here is the ruling:

IRS Tribal Ruling

Thanks to John Marciano who sent this along, and wrote it up here.

Materials in Denial of Yakama Motion to Dismiss Washington v. Yakama Tribal Court

Matthew L.M. Fletcher1 Comment

Here:

DCT Order Denying Yakama Motion to Dismiss

Yakama Motion to Dismiss

Washington Opposition to Motion to Dismiss

Yakama Reply re Motion to Dismiss

PI materials here.

Ninth Circuit Rejects Another Challenge to Colville Tax Agreement

Matthew L.M. Fletcher2 Comments

Here are the materials in Tonasket v. Sargent:

CA9 Unpublished Opinion

Tonasket Opening Brief

Colville Answer Brief

Tonasket Reply

Lower court materials here.

The Ninth Circuit recently decided a related appeal here.

Omaha Tribal Court Opinion Holding Tribe Has Authority to Tax Liquor Retailers on 1854 Reservation

Matthew L.M. Fletcher4 Comments

Here is the opinion:

Village of Pender v Morris — Omaha Tribal Court

The District of Nebraska previously ordered exhaustion of tribal remedies in this matter, materials here.

And here is the briefing schedule:

DCT Order w Briefing Schedule

News coverage here.

Thurston County Response to Chehalis Request for Judicial Notice of Federal Leasing Regs

Matthew L.M. Fletcher1 Comment

Here:

Thurtson County Response to Motion for Judicial Notice

The motion is here.

Federal Court Rejects Yakama Treaty Defense to Federal Taxes on King Mountain Tobacco Products

Matthew L.M. Fletcher

Here are the materials in King Mountain Tobacco Co., Inc. v. Alcohol and Tobacco Tax and Trade Bureau (E.D. Wash.):

DCT Order Denying Yakama Motion

Yakama Motion for Partial Summary J

Federal Opposition Memorandum

Yakama Reply

An excerpt:

This Court already has held that King Mountain does not enjoy an exemption from the federal excise tax on tobacco products under Capoeman because the tax is not imposed on products directly derived from the land. Therefore, to the degree that Article II contains express exemptive language, the exemption to taxation created by Article II would not apply to the facts of this case. Id. Accordingly, the Plaintiff has failed to establish an exemption to the excise tax under the Treaty.

The court also rejected claims that the General Allotment Act forbid the federal taxes as well:

In this case, Mr. Wheeler is the allottee, but King Mountain is the tax payer. The tax lien statute applies to the property of the “person liable to pay” the unpaid tax. 26 U.S.C. § 6321. Although the Court is aware that Mr. Wheeler’s assets could be subject to lien if King Mountain were found to be Mr. Wheeler’s alter ego, see G.M. Leasing Corp. v. United States, 429 U.S. 338, 350–51, 97 S.Ct. 619, 50 L.Ed.2d 530 (1977), the record is devoid of any evidence that King Mountain is Mr. Wheeler’s alter ego. Accordingly, any lien would be imposed on King Mountain’s property. As the trust property is held for the benefit of Mr. Wheeler, it is not an asset of King Mountain. Therefore, under the reasoning of Anderson, the Capoeman exception to taxation would not apply to income earned by King Mountain.

Materials in a related case are here.