indian taxation – Page 22

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.”

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

February 18, 2013Matthew 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

February 18, 2013Matthew 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.

Alaska SCT Affirms Local Taxation of Alaska Native’s Home Built/Financed with BIA Funds

February 18, 2013Matthew L.M. Fletcher

Here is the opinion in Williams v. Ketchikan Gateway Borough.

An excerpt:

Fredrick Williams appeals the superior court’s decision affirming the Ketchikan Gateway Borough’s ruling that the house at 511 Stedman Street is not exempt from Ketchikan Gateway Borough taxation. In March 2002 Williams received a grant to rebuild his house from the Bureau of Indian Affairs Housing Improvement Program. Under the grant, Williams would have been required to repay the full amount of the grant if he had transferred the house within ten years of ownership. Because Williams has owned the home for ten years, the repayment amount will annually decrease by ten percent of the original amount, resulting in no repayment for a transfer occurring 20 years or more after Williams received the grant. Williams executed a deed of trust securing the federal government’s right to repayment under the grant with the Stedman Street property. Williams claims that under the grant and the deed of trust, “[t]he federal government owns … the $115,000 it took to build the home,” and that Williams was therefore exempt from paying property taxes on it. On appeal, the superior court heard this argument and rejected it, upholding the Ketchikan Gateway Borough’s view that the deed of trust securing the grant did not divest Williams, the record owner, of the ownership interest in his real property. Because we agree with the superior court that substantial evidence supports the Ketchikan Gateway Borough’s factual determinations and that the Borough’s decision was correct as a matter of law, we AFFIRM the superior court and adopt its decision, which is attached as an appendix.

Chehalis Asks Ninth Circuit to Take Judicial Notice of New Interior Regulations re: Taxability of Trust Land Improvements

February 5, 2013Matthew L.M. Fletcher1 Comment

Here is the motion in Confederated Chehalis Tribes v. Thurston County Board of Equalization:

Chehalis Motion to Take Judicial Notice

The federal regs are here. 25 CFR 162.017 reads:

Subject only to applicable Federal law, permanent improvements on the leased land, without regard to ownership of those improvements, are not subject to any fee, tax, assessment, levy or other charge imposed by any State or political subdivision of a State. Improvements may be subject to taxation by the Indian tribe with jurisdiction.

Briefs are here. Lower court materials here.

Updated Per Capita Payments from Proceeds of Settlements of Indian Tribal Trust Cases (Notice 2013-1)

December 28, 2012Matthew L.M. Fletcher

Here:

2012-26751-1

An excerpt:

Notice 2012-60, 2012-41 I.R.B. 455, provides guidance on federal tax treatment of certain per capita payments made to members of Indian tribes. Since publication of Notice 2012-60, six additional tribes – Qawalangin Tribe of Unalaska, Tlingit & Haida Tribes of Alaska, Northwestern Band of Shoshone Indians, Hoopa Valley Tribe, the Ak-Chin Indian Community, and the Oglala Sioux Tribe – have reached tribal trust case settlements with the United States and have been included in the Appendix.

Prior notice here.