American Indian Law. Class 6 Taxation and Economic Development. Federal Statutes Impacting Trade. Trade and Intercourse Acts We’ve discussed mostly land issues b ut see, Indian Trader Statutes Tax statutes Don’t tax tribal income derived from lands
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Taxation and Economic Development
Can tribes tax non-Indians?
If so, do the tribal taxes bar state taxes?
Do the state taxes infringe on tribal sovereignty?
Must the state credit the tribal taxes?
tribes retain all sovereign powers that have not been ceded in treaty, abrogated by statute or divested by implication
Power to tax is fundamental attribute of sovereignty
Never ceded in a treaty. Never abrogated in a statute. Never implicitly divested.
All smokeshops offer is an exemption from state tax, nothing in federal Indian law authorizes tribes to market a tax exemption
There is no indication that Congress intended to preempt state taxes of non-Indians. The treaties and a variety of federal statutes protect and promote tribal self-government and economic development, but nothing in these would preempt state taxation of non-Indians
Weigh the various state and tribal/federal interests involved in taxation
Is the state tax directed at off-reservation value
Does the tax payer receives state services?
Double taxation (tribal and state) poses no legal conflict and in fact evinces that tribes are not infringed upon. They are still free to tax everyone.
If there is no evidence that lack of credit would place smokeshops at a competitive disadvantage to retailers elsewhere, state tax ok
Indian Commerce Clause arguably requires states to give a credit so long as the tribe and state are taxing the same thing. This way states interest is protected but Indian stores not placed in disadvantage.
motor carrier license tax and
excise (use fuel tax)
Is there a comprehensive federal scheme?
If so, does the state tax interfere with it?
If so, is the state tax nonetheless justified by state services?