indian taxation

Senecas to Target State Politicians Opposing Tribal Tax Immunities

Matthew L.M. Fletcher

From the Buffalo News via Pechanga:

ALBANY — Seen as cash cows for a cash-starved state government, the Seneca Nation is expanding its latest strategy to block tax collection efforts on its lucrative cigarette operations: The tribe will target, with campaign cash, state politicians who openly oppose the tax-free sales.

The Senecas are launching efforts to help defeat three Senate Republicans whom they call “hostile to the nation’s interests” for pushing collection of what lawmakers say could be as much as $1 billion a year in lost cigarette tax revenues by the Indian retail sales.

The lawmakers, two from upstate and one from Brooklyn, challenged the Seneca representatives at a hearing Tuesday in Manhattan called by the Senate Investigations Committee to examine the Paterson administration’s policy of not collecting the taxes on tobacco products sold by Indian retailers to non-Indians.

In a letter obtained by The Buffalo News to members of the Senecas’ Foreign Relations Committee, J. C. Seneca, the panel’s co-chairman, said the lawmakers — senators Michael Nozzolio, George Winner and Martin Golden — had “expressed tremendous hostility to our treaty rights and to our immunity from state excise taxes being collected in our territories” during Tuesday’s hearing.

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Shinnecock Member Asks Supreme Court to Overturn Cherokee Nation v. Georgia

Matthew L.M. Fletcher

Here is the cert petition in Smith v. Shulman, a tax case — Smith v Shulman Cert Petition

Questions presented:

I. Whether a “rebate” to a reservation Indian is income?

II. Whether a District Court is barred by statute from exercising subject matter jurisdiction, when an Indian treaty provides a free trade right and a procedural dispute resolution right?

III. Whether this Court should overturn The Cherokee Nation v. The State of Georgia, 30 U.S. 1 (1831)insofar as the case provides the legal underpinning of United States’ jurisdiction over Indian reservations, where this Court interpreted the Commerce Clause language of “with” to mean “over” and found Indian tribes to be “domestic dependent nations” rather than “foreign nations,” an error in Constitutional interpretation and a historical wrong against Native Americans?

Student Article on Authority of Indian Tribes to Tax Athletes and Performers

Matthew L.M. Fletcher

Here is an interesting piece called “The Power of Indian Tribes to Tax the Income of Professional Athletes and Entertainers Who Perform in Indian Country,” a student note in the Connecticut Law Review.

Here is the abstract:

Athletes and entertainers represent some of the highest paid individuals in the United States today. Historically, these individuals perform in various states throughout the country and pay state income taxes to each state they earn income in. With the recent rise of athletic and entertainment venues in Indian Country, more athletes and entertainers are earning income in Indian Country. For example, the Mohegan Tribe owns and operates the Mohegan Sun Arena on its reservation in Connecticut and the Arena annually hosts hundreds of professional athletic and entertainment events. Because the Mohegan Sun Arena is located in Connecticut, athletes and entertainers who perform at the Arena and receive compensation are currently subject to Connecticut’s state income tax. However, as a federally-recognized Tribe, the Mohegan Tribe possesses the power to tax, including the power to tax non-member Indians doing business on the Mohegan Reservation. Although the Mohegan Tribe does not currently levy an income tax on the athletes and entertainers who perform at the Mohegan Sun Arena, the prospect of double taxation raises the question of which sovereign is really the proper taxing entity — the State or the Tribe? This Note proposes an equitable tax framework that resolves this double taxation quandary.

Supreme Court Denies Cert in Rocky Barrett Tax Case

Matthew L.M. Fletcher1 Comment

Here is the order list — the docket no. is 09-32, and the notice is on page 3.

Barrett v. United States Cert Petition Materials

Matthew L.M. Fletcher

The petition stage briefing is complete in Barrett v. United States (09-32).

Barrett v. US Cert Petition

CPN Amicus Brief

SOLICITOR ANSWER BRIEF

Barrett Reply Brief

The conference for this petition is October 9, 2009.

Lower court materials are here.

Sales Taxes at Indian Casinos

Matthew L.M. Fletcher

The 1 percent sales tax at Foxwoods apparently has the attention of the Connecticut AG for some reason (Indianz report here). The concerns seem to be based in the accounting of the tax, and really just a way for this troubling AG (Blumenthal) to get in the papers.

But tribal sales taxes at Indian casinos imposed on the largely non-Indian customer base is an important and real expression of tribal sovereignty. But largely because of numerous Supreme Court decisions like Wagnon, Cotton Petroleum, and Moe, the states get most of the money from the on-reservation tribal tax base. Moe says tribes have to collect sales taxes from non-Indians purchasing tobacco products in Indian Country. Cotton Petroleum says that tribal taxes don’t preempt states taxes imposed on non-Indians doing business in Indian Country, allowing state taxes to economically trump tribal taxes. As does Wagnon.

The one percent tax added on to the state sales tax at Foxwoods is an economic representation of the tribal tax base in stark forms. The state gets 6 percent of tribal sales, and the tribe (if its lucky) can tack on an additional 1 percent. What does the state have to do for this money? Absolutely nothing. They already get 25 percent of the net win in Connecticut. Because of these very unfair Supreme Court decisions, AG Blumenthal can wax politic about sales taxes that are pure windfalls to his state.

Materials in the New York City Smokeshop Case

Matthew L.M. Fletcher

Here are the materials in the New York City v. Golden Feather Smoke Shop case (E.D. N.Y.), reported here. Earlier materials are here.

NYC Motion for Preliminary Injunction

Golden Feather Opposition to Motion

Peace Pipe Smoke Shop Opposition

NYC Reply Brief in Support of Motion (Attachment: IMO Gutlove & Shirvant)

Golden Feather DCT Order on Motion for PI

NYT’s Article on New York State’s Tobacco Fight with Indian Tribes

Matthew L.M. Fletcher1 Comment

From the NYTs:

A federal judge ruled on Tuesday that a group of tobacco vendors on an Indian reservation on Long Island cannot sell tax-free cigarettes to the general public until a court rules in a closely watched legal battle between the reservation and New York City.

A temporary injunction issued by Judge Carol B. Amon of Federal District Court in Brooklyn gave the city at least a temporary victory in its efforts to collect hundreds of millions of dollars in tax revenue.

“The city will go after every dollar that is owed to city taxpayers,” Mayor Michael R. Bloomberg said in a statement on Wednesday. Under Judge Amon’s ruling, a group of cigarette businesses on the Poospatuck Indian Reservation near Mastic can sell tax-free cigarettes only to tribe members, for personal use, until a verdict is reached in a federal lawsuit the city filed in September.

The judge stayed the ruling for 30 days to give the vendors time to appeal.

“The judge’s ruling is completely wrong,” said Harry Wallace, a lawyer and the chief of the Unkechaug Indian Nation, which is on the Poospatuck reservation, adding that it ignored the Indian nation’s sovereignty.

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Idaho Federal Court Refuses to Dismiss Smokeshop Case

Matthew L.M. Fletcher

Here is the opinion in Lil’ Brown Smoke Shop v. Wasden (D. Idaho) in which the court rejected a motion to dismiss on Eleventh Amendment and Young absention grounds. An excerpt:

Based on the aforementioned cases and standards, and the arguments of the parties with respect to whether the Act regulates on or off reservation activity, the Court disagrees with Defendants and finds that the issue of the state’s jurisdiction is not conclusive. Here, like in Fort Belnap, Sycuan, and Seneca-Cayuga, the question of whether the state law is enforceable against Plaintiff is a federal question in an area, tribal law, where federal interests predominate. Thus, the Court finds that the State of Idaho’s interest in this litigation is not sufficiently important to warrant Younger abstention in light of the predominant federal question regarding the State of Idaho’s jurisdiction to enforce the Act. Thus, as Defendants have failed to prove all requirements for Younger abstention, the Court will deny Defendants Motion to Dismiss (Docket No. 8 ) with respect to Defendants Wasden and Armstrong.

Lil Brown Smoke Shack DCT Order

Idaho Motion to Dismiss

Smoke Shack Opposition

Idaho Reply Brief

Cayuga Indian Nation Wins Important Tax Case

Matthew L.M. Fletcher1 Comment

The New York Appellate Division has reversed a N.Y. Supreme Court decision denying a request for a declaratory judgment against county impoundment of tobacco products intended for sale on-reservation to tribal members. The case is Cayuga Indian Nation v. Gould.

NY Supreme Court Slip Opinion

NY Appellate Division Opinion

News coverage here.