Business | Law | National

City cites Supreme Court ruling in push for sales tax from tribes

Monday, February 24, 2014

The city of Shawnee, Oklahoma, says a U.S. Supreme Court decision from 1991 requires tribes to collect taxes on the sale of goods to non-Indians.

In Oklahoma Tax Commission v. Citizen Potawatomi Nation, the court held that sales to tribal members were protected by sovereignty. But non-Indian transactions weren't covered, Chief Justice William H. Rehnquist wrote in the unanimous opinion.

"Although the doctrine of tribal sovereign immunity applies to the Potawatomis, that doctrine does not excuse a tribe from all obligations to assist in the collection of validly imposed state sales taxes," Rehnquist wrote.

Chairman John A. Barrett of the Citizen Potawatomi Nation, however, says only Congress has the power to force tribe to collect the taxes. His tribe operates a grocery store and gas station whose tax revenues are in the city's cross-hairs.

“Based on the Commerce Clause of the U.S. Constitution ... only the U.S. Congress can regulate commerce on Native land,” Barrett said in a statement to The Oklahoman. “We are not required to pay the city sales tax any more than the other businesses outside of the city’s jurisdiction would be required to. The courts have consistently rejected municipal attempts to regulate or tax tribal activities except when the tribe tried to sell a tax exemption. We charge the same amount of tax as any other grocery store in Shawnee.”

The tribe will host a meeting next month to discuss the matter. The Absentee Shawnee Tribe, the Kickapoo Tribe and the Sac and Fox Nation are also being asked to share taxes with the city.

Get the Story:
State tax commission powerless to audit tribes, enforce sales tax collections (The Oklahoman 2/23)
Tribes answer: leaders respond to city's request for salex tax dollars (The Shawnee News-Star 2/21)
Citizen Potawatomi Nation faces off with city of Shawnee (KOCO 2/21)