indian taxation

New York Prevails over UPS in Indian Country Smokes Case

Matthew L.M. Fletcher1 Comment

Here are the materials in State of New York v. United Parcel Service (S.D. N.Y.):

287-ny-motion

345-opposition

384-reply

406-dct-order

An excerpt:

The fundamental reason why plaintiffs are entitled to summary judgment and defendant is not is that when UPS was transporting unstamped cigarettes (how many is “TBD”), it was transporting contraband. Pre-amendment § 471 confirms that stamps were required, that taxability was presumed, and that the burden of proving otherwise was on UPS. UPS has not carried this burden. UPS is not entitled to rely on the judicially imposed injunctions or stays of enforcement obtained by Indian tribes, nor is it entitled to rely upon forbearance. It is also of no moment that there were difficulties in determining when tax was required to be paid or not, and it is also of no moment that the State had stood down on collection from reservation retailers altogether. At the end of the day, the situation — which may have advantaged reservation retailers — placed UPS in a precarious position; without its own statutory exemption or legal assurance, and in the absence of information as to ultimately taxability of the cigarettes they were shipping, transporting shipments was a risky business indeed. But this was a business risk. UPS could choose to undertake such risk or not. One thing has [38]  always been clear: UPS has never had exemption from the CCTA.

Counterclaims against US and Poarch Band Dismissed in Tax Dispute

Matthew L.M. Fletcher1 Comment

This is a continuation of Poarch Band of Creek Indians v. Hildreth, recently decided by the Eleventh Circuit.

Here are the materials in Poarch Band of Creek Indians v. Moore (S.D. Ala.):

77-magistrate-rr

79-poarch-band-objections

80-dct-order

An excerpt:

After due and proper consideration of all issues raised, and a de novo determination of those portions of the recommendation to which objection is made, the recommendation of the Magistrate Judge made under 28 U.S.C. § 636(b)(l)(B) and dated August 10, 2016 is ADOPTED as the opinion of this Court with the following exceptions. The Court does not adopt the recommendation to deny the Plaintiff’s Motion to strike Defendant Moore’s affirmative defenses numbered 4 and 5, but rather grants the motion to strike defenses 4 and 5 for the reasons set forth in Plaintiff’s Objections (Doc. 79). The report and recommendation is adopted in all other respects.

Washington COA Decision in Comenout v. Washington State Liquor Control Board

Matthew L.M. Fletcher

Here.

An excerpt:

In State v. Comenout, our Supreme Court upheld the State’s exercise of nonconsensual criminal jurisdiction over tribal members selling unstamped cigarettes from an unlicensed store located on trust allotment property lying outside the borders of an Indian reservation. Edward Comenout challenges that decision in this administrative forfeiture action appeal arising out of the same seized cigarettes at issue in Comenout. He claims Comenout is not binding because the case was remanded and ultimately dismissed. But we are bound by that decision unless and until the Washington Supreme Court or the United States Supreme Court rules otherwise. Neither court has done so. And under Comenout, it is clear the State court had personal and subject matter jurisdiction in this administrative forfeiture action and that Comenout is not exempt from the State’s cigarette tax as an “Indian retailer.” Because Comenout fails to establish any error of law or arbitrary and capricious action under the Administrative Procedure Act2 (APA) standards, we affirm

New York Largely Prevails in Smokes Suit against King Mountain Tobacco

Matthew L.M. Fletcher

Here are the materials in State of New York v. King Mountain Tobacco Co. (E.D. N.Y.):

195-1 King Mountain Motion for Summary J

197-1 NY Cross Motion

201 NY Opposition

202 King Mtn Opposition

205 King Mtn Reply

206 NY Reply

214 DCT Order

Eleventh Circuit Affirms Injunction Favoring Poarch Band against Escambia County Assessor

Matthew L.M. Fletcher1 Comment

Here is the opinion in Poarch Band of Creek Indians v. Hildreth.

An excerpt:

The Poarch Band of Creek Indians (“Poarch Band”) sued James Hildreth,
Tax Assessor of Escambia County, Alabama, for declaratory and injunctive relief to prevent the assessment of property taxes on lands owned by the Poarch Band in Escambia County, Alabama, and held in trust by the United States (“Trust Property”). The Poarch Band maintains the Trust Property is exempt from taxation pursuant to the Indian Reorganization Act of 1934 (“IRA”). See 25 U.S.C. § 465.1 The district court granted injunctive relief barring the tax assessment efforts during the pendency of the case, and Hildreth appeals.2 Finding no abuse of discretion and no error of law, we affirm.

Briefs here.

Federal Court Confirms Arbitration Award in Favor of Citizen Potawatomi against Oklahoma

Matthew L.M. Fletcher

Here are the materials in Citizen Potawatomi Nation v. Oklahoma (W.D. Okla.):

16. Memorandum Opinion and Order 6-21-16

17. Judgment 6-21-16

Award

We posted commentary on this matter here.

 

SCOTUS Denies Cert in Seminole Tax, American Samoan Birthright Citizenship Cases

Matthew L.M. Fletcher

Here is the order list today. The Court denied cert in Seminole Tribe v. Biegalski. The petition and lower court briefs are here.

The Court also denied cert in Tuaua v. United States, the American Samoan birthright citizenship case.

Keweenaw Bay Indian Community Sues over Michigan Sales & Use and Tobacco Taxes

Matthew L.M. Fletcher

Here is the complaint in Keweenaw Bay Indian Community v. Khouri (W.D. Mich.):

Complaint

Citizen Potawatomi Prevails in Dispute over Alcohol Sales and Taxes at Gaming Facility

Matthew L.M. Fletcher1 Comment

Here is the AAA award in Citizen Potawatomi Nation v. State of Oklahoma:

Award

an excerpt:

In 2014, the OTC sent an audit demand to the Nation questioning more than $27,000,000 of exemptions claimed on the Nation’s past sales tax reports. The Nation did not respond and declined to submit further sales tax reports. The OTC then filed and prosecuted an administrative complaint seeking to revoke all of the Nation’s alcoholic beverage permits relying on State law providing for revocation of any alcoholic beverage permit upon noncompliance with State tax laws. In its complaint, the OTC asserted for the first time that State sales taxes apply to all sales by an Indian Tribe to nontribal members.

Interesting negotiating strategy.

Commentary:

Justice Daniel J. Boudreau issued the attached arbitration award in Citizen Band Potawatomi Nation v. State of Oklahoma, No. 01-15-0003-3452 (AAA, April 4, 2016).   The Award includes (i) a declaratory judgment that federal law protecting tribal sovereignty interests preempt and invalidate the State’s sales taxes on the Nation’s sales in question; and (ii) issues an injunction against the State from taking any further actions to divest the Nation’s Compact gaming facilities of the right to sell and serve alcoholic beverages or threaten enforcement actions against them on the ground that the Nation does not comply with the State’s sales tax laws.  Justice Boudreau was the single arbitrator in this dispute.   

The declaratory judgement applied the balancing test analysis in White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) and other federal Indian law cases.  Judge Boudreau held that the evidence established (i) significant federal and tribal interests in the Nation’s self-governance, economic self-sufficiency, and self-determination; (ii) the Nation alone invests value in the goods and services that it sells, does not derive value through an exemption from State sales taxes and imposed its own equivalent  tribal tax on the sales; (iii) the State possesses no economic interest beyond a general quest for revenue in imposing a sales tax on the Nation’s transactions and suffers no uncompensated economic burden arising therefrom; and (iv) the federal and tribal interests at stake predominate significantly over any possible State interests in the transactions upon which the State seeks to impose its sales tax.

 

Eleventh Circuit Rejects Miccosukee Members’ Federal Tax Challenge

Matthew L.M. Fletcher

Here is the opinion in Cypress v. United States:

CA11 Unpublished Opinion

An excerpt:

This appeal arises out of a dispute between sixteen members of the Miccosukee Tribe of Florida (the “Tribe members”) and the United States, the U.S. Department of the Interior, the U.S. Department of the Treasury, and the Secretaries of the Treasury and of the Interior (collectively, “the Government”). The Tribe members seek declaratory relief to avoid paying federal income taxes on distributions, including gaming proceeds, paid out of the Tribe’s trust account. The district court dismissed the complaint for lack of subject matter jurisdiction, finding that the United States had not waived sovereign immunity for suits brought by individual Tribe members. The Tribe members now appeal the dismissal.

We agree with the district court that the Government did not waive sovereign immunity. Accordingly, we affirm the district court’s dismissal of this matter.

Briefs here.