Calling for the State of South Dakota to Recognize Tribal Taxing Powers in Indian Country and the Non-Taxability of Products with Added Value and Tribal Enterprise

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The National Congress of American Indians
Resolution #TUL-13-024

TITLE: Calling for the State of South Dakota to Recognize Tribal Taxing Powers in Indian Country and the Non-Taxability of Products with Added Value and Tribal Enterprise

WHEREAS, we, the members of the National Congress of American Indians of the United States, invoking the divine blessing of the Creator upon our efforts and purposes, in order to preserve for ourselves and our descendants the inherent sovereign rights of our Indian nations, rights secured under Indian treaties and agreements with the United States, and all other rights and benefits to which we are entitled under the laws and Constitution of the United States, to enlighten the public toward a better understanding of the Indian people, to preserve Indian cultural values, and otherwise promote the health, safety and welfare of the Indian people, do hereby establish and submit the following resolution; and

WHEREAS, the National Congress of American Indians (NCAI) was established in 1944 and is the oldest and largest national organization of American Indian and Alaska Native tribal governments; and

WHEREAS, since joining the union, the State of South Dakota has utilized its local taxation powers to overstep its constitutional authority, and infringe on the sovereignty and self-determination of South Dakota Tribes; and

WHEREAS, South Dakota Tribes are among the most economically disadvantaged in the United States, and the revenues generated from carefully crafted Tribal taxation ordinances are the lifeblood of these Tribal Governments; and

WHEREAS, South Dakota Tribes are engaged in sophisticated gaming, agricultural, manufacturing, and other economic activities that provide a substantial influx of revenues into their communities, South Dakota, and the nation; and

WHEREAS, the jobs created by Tribal gaming facilities, the ancillary businesses connected to the gaming facilities, and other Tribal government and enterprise employment result in Tribal employees spending their wages on goods and services in Indian country and surrounding non-Indian communities; and

WHEREAS, Tribal enterprises generate substantial revenues for Tribes and the taxes collected by such enterprises support funding for essential governmental services, including health, education, roads, public safety, and support services for elders and families living in poverty; and

WHEREAS, charitable contributions from Tribes to its members and non-members consistently provides local and national charities with revenue to support their funding needs; and
WHEREAS, the growth of Tribal enterprises has resulted in jurisdictional clashes with respect to the proper authority of the State and Tribal governments to tax goods and services sold to non-Indians in Indian country; and

WHEREAS, Tribes have attempted to resolve jurisdictional issues with respect to the proper taxing authority of the State and Tribal governments through Tribal-State tax agreements with mixed results; and

WHEREAS, tax collection agreements offered by the State of South Dakota to Tribes fail to take into account the fact that South Dakota sales tax collected from Tribal members purchasing goods and services off-Reservation adequately compensate the State and local governments for the services they provide to Tribal members, yet Tribal governments bear a disproportionate financial burden associated with taxation in relation to local services rendered; and

WHEREAS, the state tax collection agreements utilize inconsistent mechanisms to determine what of amount of tax collected will be remitted to the Tribes, creating different distributions to each Tribe; and

WHEREAS, the State’s use tax is an impermissible affront to Tribal sovereignty and Tribal interests in taxing value generated by on-reservation activities to raise revenue for essential governmental services outweigh the State’s general interest in raising revenues; and

WHEREAS, additional limits on the State’s taxing authority arise from the Due Process and Interstate Commerce Clauses and numerous federal statutes including the Indian Reorganization Act and the Indian Gaming Regulatory Act; and

WHEREAS, the State conditioning the reissuance of liquor licenses to Tribal-owned enterprises on remittance of the use tax the State claims is owed is an abuse of federally delegated power and in direct violation of section 11 of the Indian Gaming Regulatory Act; and

WHEREAS, since the early 1990’s, Tribes have battled with the State of South Dakota in an attempt to keep as much of the tax collected as possible, but have been economically and legally pressured by State agents to accept unfair tax collection agreements; and

WHEREAS, the Flandreau Santee Sioux Tribe (“FSST”) has filed or intends to file suit in federal district court against the State of South Dakota claiming the State has no authority to impose or collect its use tax on FSST Tribal lands or condition the reissuance of liquor licenses to Tribal-owned enterprises on the remittance of the State’s use tax; and

WHEREAS, the federal district court matter could set a legal precedent that would render the State’s use tax and conditional reissuance of liquor licenses to Tribal-owned enterprises invalid, and lead to increased tax revenue for all Tribes located within the State of South Dakota; and

WHEREAS, an unfavorable litigation outcome for the FSST in the federal district court matter will not alter current Tribal-state tax collection agreements or adversely affect Tribal government taxing authority.

NOW THEREFORE BE IT RESOLVED, that the NCAI fully supports the position of the FSST, and all Tribes, in the federal courts challenging the State’s authority to impose its use tax on sales to non-Indians in Indian country and challenging the State’s authority to condition the reissuance of liquor licenses to Tribal-owned enterprises on remittance of the use tax the State claims is owed by Tribes on sales to non-Indians; and

BE IT FURTHER RESOLVED, that the NCAI shall support legislation that solidifies the inherent rights of Indian Tribes to tax all individuals who conduct taxable activities within the Tribes’ jurisdiction, and to keep the States from infringing on the Tribes’ rights as sovereigns; and

BE IT FURTHER RESOLVED, that the NCAI shall oppose the State of South Dakota, and any other state, to utilize its taxation laws and/or policies to impede the development of Tribal businesses, to disrupt the supply of materials to Tribal businesses, or attempt to collect any tax they are not entitled to from within at Tribes’ jurisdiction; and

BE IT FINALLY RESOLVED, that this resolution shall be the policy of NCAI until it is withdrawn or modified by subsequent resolution.

 

CERTIFICATION

The foregoing resolution was adopted by the General Assembly at the 2013 Annual Session of the National Congress of American Indians, held at the Cox Business Center from October 13 - 18, 2013 in Tulsa, Oklahoma with a quorum present.



President
ATTEST:


Recording Secretary