FROM THE ARCHIVE

Supreme Court accepts taxation case

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JANUARY 23, 2001

The Supreme Court on Monday agreed to step in and resolve a taxation dispute between two Oklahoma tribes and the federal government.

The case is the second one the Supreme Court will hear this term affecting taxation in Indian Country. But unlike the Navajo Nation case which involves taxation by tribal governments, the dispute here centers on the types of taxes tribes have to pay to the federal government.

The Chickasaw Nation and the Choctaw Nation have protested paying gaming taxes on "pull-tabs." Pull-tabs are cards or tickets which consumers buy in hopes of winning a certain amount of money.

Since the pull-tabs are effectively a bet, the Internal Revenue Service considers them a wager and therefore subject to wagering excise taxes and federal occupational taxes. But the tribes have protested paying the taxes because they say they are exempt, a privilege given to states.

The tribes have argued pull-tabs aren't wagers and that tribes don't meet key definitions required by the IRS, so they aren't subject to the taxation. The tribes also say the Indian Gaming Regulatory Act (IGRA) exempts tribes from the wagering taxes.

Two courts have so far disagreed with the tribes, however. The 10th Circuit Court of Appeals in April 2000 said IGRA doesn't contain such an exemption and upheld a federal court ruling which directed the tribes to pay the taxes.

But the tribes say IGRA is ambiguous on the issue. As such, the tribes argue the Supreme Court should apply well-established principles of Indian law and resolve the dispute in their favor.

In their brief, the Department of Justice discounts the idea that IGRA is ambiguous and says the tribes should pay the taxes. As of 1997, the Chickasaw Nation owed about $42,000 dollars while the Choctaw Nation owed almost $153,000.

Get the 10th Circuit Rulings:
Chickasaw Nation v. US (10th Circuit No. 99-7042. April 2000)
Choctaw Nation v. US (10th Circuit No. 99-7042. April 2000)

Get the Department of Justice Brief:
PDF | HTML

Get a GAO report on Indian gaming taxation issues:
Tax Policy: A Profile of the Indian Gaming Industry (GAO GGD-97-91. April 1997)

Relevant Links:
The Choctaw Nation of Oklahoma - www.choctawnation.com
The US Supreme Court - www.supremecourtus.gov

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