Law Article: Sovereignty, jurisdiction and taxes in Indian Country

Tuesday, January 4, 2011  

"Just as general tax matters run throughout every facet of civil practice, in Washington, Indian tax issues permeate the law. From the family law attorney who must evaluate trust assets of a Native American spouse, to the business practitioner minimizing his clients' tax exposure, to the public lawyer serving state or local government, Washington lawyers are often confronted with the abstruse world of Indian tax, due in no small part to the resurgence of tribal economies and related rise of a tribal middle class.

The rumors of tax-free Native America have been greatly exaggerated. Ironically, for an ostensibly tax-free zone, Indian tribes and lands are rife with nuanced tax issues that both tribal clients and non-Indian entities interacting with them must confront.

The commonly held but mistaken belief that individual tribal members are exempt from federal income tax tells only the beginning of the story. Both tribal governments and non-tribal parties doing business in Indian Country must carefully navigate the pitfalls of Indian tax law, which can often hinge on subtle factor-based tests and sprawling inquiries into the character of a putative taxable event and its players. If they and their counsel are successful, significant federal, state, and local tax savings can flow from Indian reservation-based transactions.

Still, the jurisdictional complexity of Washington's sovereign domestic nations certainly adds a layer of intricacy to an already labyrinthine area of the law."

Get the Story:
Gabriel S. Galanda and Anthony S. Broadman: Taxing Times in Native America (Washington State Bar Association January 2011)