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Court halts tax on inter-tribal commerce deal
SATURDAY, MAY 18, 2002

A federal judge has dealt the state of Kansas a setback in its ongoing tax fight against the Winnebago Tribe of Nebraska.

U.S. District Judge Dale E. Saffels on Friday issued a temporary restraining order barring Kansas officials from imposing state taxes from the Winnebago Tribe. Ruling that tribal chairman John Blackhawk, tribal executive Lance Morgan and two tribal employees could suffer "irreparable injury," he stopped the state from seizing any tribal and personal property.

Saffels also ordered the state to delay its criminal proceedings against Blackhawk and Morgan. Kansas Attorney General Carla Stovall had ordered the two arrested for allegedly failing to pay the taxes.

The ruling comes in a dispute over the payment of $1.25 million in gas distribution taxes. In April, the Kansas Department of Revenue -- "without advance notice," the court stated -- seized two trucks, two tanker trailers and other property belonging to the Ho-Chunk Inc., an economic arm of the Winnebago Tribe.

The state argues that the tribe is violating state law.

But while not ruling on the legality of the tax, Saffels found reason to doubt the state's claim. Noting that the case involves an inter-tribal commerce deal, his order stated that questions of sovereignty and self-determination need to be resolved.

"[T]he issues presented are so serious, substantial, difficult, and doubtful as to make them fair ground for litigation," he wrote in the 21-page order.

The Winnebago Tribe delivers gas to three Kansas tribes: the Sac and Fox, the Kickapoo and the Iowa. All four tribes are plaintiffs in the suit.

Saffels set a June 12 hearing in federal district court to consider permanently extending the collection of taxes.

Get the Ruling:
Winnebago v. Stovall (5/17)

Relevant Links:
The Winnebago Tribe - http://www.winnebagotribe.com
Kansas Department of Revenue - http://www.ksrevenue.org