Taxation in Indian Country: An Overview of the Causes of Tax Inequity in Indian Country and Modern Reform Efforts

POLICY DISCUSSION PAPER SERIES | 2023-02 Taxation in Indian Country: An Overview of the Causes of Tax Inequity in Indian Country and Modern Reform Efforts APRIL 2023 Andrew Huff Center for Indian Country Development Federal Reserve Bank of Minneapolis This paper reflects the views of the authors but not necessarily those of the Center for Indian Country Development (CICD) or anyone in the Federal. [...] Under the balancing test, courts must assess (1) the state’s interest in taxing or regulating the activity in question; (2) whether a comprehensive federal regulatory regime exists with respect to the issue in question; and (3) whether the state law impermissibly infringes on the “right of reservation Indians to make their own laws and be ruled by them.”16 If federal or tribal interests outweigh t. [...] In Cotton Petroleum, arising seven years after the Merrion decision and again involving the Jicarilla Apache 4 Reservation, the Supreme Court held that the State of New Mexico could impose its own severance and privilege taxes on non-tribal member lessees of the Jicarilla Apache Tribe extracting oil and gas from tribal trust lands—on top of the tribal taxes that the Court endorsed in Merrion. [...] In 2015 NCAI called on Congress to “enact legislation and promote Indian Self-Determination, Tribal Economic Development, and Tribal Self-Sufficiency in the area of Indian oil and gas development, protect tribal taxation and regulatory authority, and preempt state taxation on Indian oil and gas development and overturn the Cotton Petroleum case.”27 • In 2016 the Native Nations Institute (NNI) and. [...] For example, a dispute between the State of Montana and the Crow Tribe concerning state taxation of tribal coal lasted 38 years, journeying many times through federal district court, the Ninth Circuit Court of Appeals, and up to the U.