Opinion

Harlan McKosato: Yes, Indians do pay taxes

Monday, March 24, 2008

"It's tax time again, but luckily, since I'm an Indian, I don't have to pay taxes. That's a commonly held belief by, I would wager, a majority of most Americans — even the so-called educated ones — that Indians don't pay taxes. I wish it were true, but as blues singer/guitarist Jon Butcher Axis once wrote, "If Wishes Were Horses, then Dreamers Would Ride."

First of all, all individual American Indians pay federal taxes. In a case decided by the U.S. Supreme Court in 1956 known as Squire v. Capoeman, the U.S. government argued "As citizens of the United States they (American Indians) are taxable under the broad provisions ... of the Internal Revenue Code of 1939, which imposed a tax on the net income of every individual, derived from any source whatsoever."

The high court declared, "We agree with the government that Indians are citizens and that in ordinary affairs of life, not governed by treaties or remedial legislation, they are subject to the payment of income taxes, as are other citizens."

There are exceptions in which Indians do not have to pay federal taxes. One is when an Indian person receives income directly from a treaty or trust resource such as fish or timber or farm land. And no taxes are levied when the government compensates a tribal member for the taking of his or her trust land for government use.

What about state taxes? It depends on who you work for, where you work and where you live. If you work for the tribal government or a tribal enterprise located on tribal lands and live on tribal lands, generally you don't have to pay state taxes. Here in New Mexico, you can opt to pay state taxes but you will receive a full refund at the end of the year in most cases."

Get the Story:
Harlan McKosato: Yes, we do pay taxes, here's how it works (The Santa Fe New Mexican 3/23)

Relevant Links:
Native America Calling - http://www.nativeamericacalling.com