Paul L. Caron

Tuesday, January 4, 2022

Taxes, Theft, And Indian Tribes: Seeking An Equitable Solution To State Taxation Of Indian Country Commerce

Adam Crepelle (Southern), Taxes, Theft, and Indian Tribes: Seeking an Equitable Solution to State Taxation of Indian Country Commerce, 122 W. Va. L. Rev. 999 (2020):

Though often overlooked, Indian tribes are the third sovereign recognized in the United States' constitutional order.' A long and sordid history of colonization resulted in tribes relinquishing much of their land, but only some of their aboriginal sovereignty. Indeed, the settled principle is that tribes possess all inherent powers that have not been expressly or necessarily abnegated by their incorporation into the United States. The Supreme Court has found three limitations on tribes: tribes cannot alienate their land, tribes cannot prosecute non-Indians, and tribes cannot engage in foreign relations without federal approval. Accordingly, tribal sovereignty is akin to state sovereignty in that states have those powers that were not surrendered to the federal government in the Constitution' in contrast to the powers of municipal governments under Dillon's Rule.

For the last 50 years, the United States has adopted a policy of tribal self-government. The policy's goal is to free tribes from their dependence on federal funds and allow tribes to build functioning economies on their land. Tribes have made tremendous strides at self-determination; however, tribes still have a long way to go. Economic transformation is the major lag in Indian country. Hardly any privately-owned businesses operate in Indian country. 

The court in QCV was right about one thing: the tribe could not point to a single modern era case supporting its position.23 Sadly, the Supreme Court has made it virtually impossible for tribes to create a tax base. The Supreme Court's authorizing state taxation of Indian country violates the Constitution and undermines tribal sovereignty. Furthermore, the Supreme Court's permitting state taxes of tribal commerce contradicts the United States' Indian policy of tribal self-determination. Until tribes are allowed the same taxing rights as other governments, tribal self-government will be hobbled. Prohibiting state taxes of Indian country will allow tribes to recruit businesses to their land, levy taxes, and operate as the nations they are and always have been.

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