The Tax Lawyer

Commentary on Richard Pomp’s “The Unfulfilled Promise of the Indian Commerce Clause and State Taxation”

Matthew L.M. Fletcher1 Comment

A few words on probably the most important recent law review article in Indian law — Richard D. Pomp’s The Unfulfilled Promise of the Indian Commerce Clause and State Taxation, 63 Tax Lawyer 897 (2010).

In The Brethren, the 1979 book that opened the door the mysteries of the interior of the Supreme Court (and served as a source of deep embarrassment to several Justices), Bob Woodward and Scott Armstrong found that the Justices of the 1970s, unusually hospitable to the claims of Indian tribes given the history of American Indian law and policy, considered being assigned to draft the majority opinion in an Indian case a sign of disrespect. No Justice wanted those assignments. H.W. Perry, Jr.’s Deciding to Decide (1991), which was the first book detailing the insides of the Court after The Brethren, confirmed that assignments to write majority opinions in Indian cases and tax cases – “the crud” – tended to go to the junior Justices. For example, Chief Justice Burger, according to Woodward and Armstrong, assigned then-Justice Rehnquist an Indian tax case (Moe v. Confederated Salish and Kootenai Tribes, 426 U.S. 463 (1976)) as punishment for a 1975 Supreme Court Christmas party joke gone wrong.

If Indian cases are bad, and tax cases are bad, then Indian tax cases must be the worst.

Or are they?

Richard Pomp’s entertaining paper, The Unfulfilled Promise of the Indian Commerce Clause and State Taxation, blows the lid off of the myth that Indian tax cases are boring.

It turns out that one of the most exciting things about the Indian Commerce Clause is the history of the Clause, which generated more debate at the Constitutional Convention than the Interstate and Foreign Commerce Clauses combined. For some reason (perhaps because Pomp’s article hadn’t yet been written), the Supreme Court has simply refused to engage at all on the “original meaning” of the Indian Commerce Clause. The Court had a chance to in Seminole Tribe v. Florida, 517 U.S. 44 (1996), but Chief Justice Rehnquist just ignored the question by concluding that the three Commerce Clauses were the same for Eleventh Amendment purposes. But maybe since the Supreme Court frequently enters into the thicket of early American history to interpret many Constitutional provisions, the history of the Indian Commerce Clause is worth a second look, as Pomp does here.

Continue reading →

Richard Pomp on the Indian Commerce Clause and State Taxation

Matthew L.M. Fletcher

Richard Pomp’s incredible opus, “The Unfilled Promise of the Indian Commerce Clause and State Taxation,” has been published in the Tax Lawyer.

Here is the pdf: Richard Pomp Indian Commerce Clause Article

Excellent New Scholarship: Richard Pomp’s “The Unfulfilled Promise of the Indian Commerce Clause and State Taxation”

Matthew L.M. Fletcher

Richard Pomp has published his mammoth article in the ABA’s “The Tax Lawyer.” A short description of this paper is here. If you are a member of the ABA taxation section, you can get the whole thing here.

An excerpt:

This Article is an expanded version of luncheon remarks delivered at a symposium on the Commerce Clause at Georgetown Law School. A few things became clear after my address on the Indian Commerce Clause and state taxation. Many people at the Conference had only a faint memory that such a clause even existed. To most state tax practitioners and academics, “the Commerce Clause” meant the Interstate Commerce Clause and, perhaps secondarily, the Foreign Commerce Clause, but certainly not the Indian Commerce Clause.

True, a small group of “Indian law” insiders has long existed. These specialists have traditionally serviced tribes endowed with natural resources. More recently, revenue generated across the country from Indian gaming, hotels, restaurants, manufacturing, industrial parks, gas stations, cement factories, timber operations, smokeshops, or sports franchises has created legal work for firms that traditionally did not practice Indian law.

This new group of practitioners has quickly learned what the more experienced firms have long known: the issues raised by the taxation of Indians, the tribes, and those doing business with them are sui generis—and complicated, even by tax standards. To be sure, state tax lawyers are used to multijurisdictional issues. Taxes are levied by sewer, water, school, and transit districts; cities; counties; states; and the national government—tribal taxes would seem to add merely one more level.

Although comforting, this view would be misleading. Indian taxation drags lawyers into areas outside their normal comfort zone. Practitioners need to master treaties between the federal government and the tribes; state enabling acts; numerous Indian-specific statutes and executive orders that often reflect polar swings in Congressional policy; special Indian canons of construction; the unique patchwork pattern of land ownership on reservations; and concepts like “Indian sovereignty” that serve as a ubiquitous, amorphous, and malleable backdrop in many cases. Bread-and-butter issues for state tax lawyers—like apportionment and discrimination—take on new meanings. The Indian tax cases tolerate results that would violate the Interstate Commerce Clause. The formative Supreme Court cases on Indian taxation often reflect the composition of the bench and sympathies (or lack thereof) of individual justices for the Indians. Add to this the difficulty of obtaining up-to-date information on tribal tax codes, and the result is a labyrinth of unpredictability.

While the topic of my conference presentation and hence the subject of this Article is the Indian Commerce Clause and state taxation—and not a treatise on all aspects of state taxation (and nothing on federal taxation)—I would disserve the reader by not straying a bit afield. To cut to the chase, the Court has emasculated and denigrated the Indian Commerce Clause, preventing implementation of the Founders’ vision. Readers would have every right to feel that slogging their way through this lengthy Article was not worth the effort if that were the only message at the end of the journey. And so, with the encouragement of the conference organizers and journal editors, I have interpreted my charge broadly to sketch the contours of other Indian tax doctrines so that the reader will have a feel for the signposts and boundaries. I have focused on a selection of prominent U.S. Supreme Court cases, mostly involving state taxation; many more could have been discussed. My goal is not to be exhaustive (or exhausting), but rather suggestive and illustrative.

Continue reading →