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PolicyBasics:TaxesinIndianCountryPart2:TribalGovernments

November2017

www.MontanaBudget.org

TaxesinIndianCountryTribalself-sufficiencyandself-governmentdependuponatribe’sabilitytoraiserevenueandregulateitsterritory—andthepowertotaxplaysanessentialroleinthis.1Theserevenuestreamshelptribesperformgovernmentfunctionsandprovideessentialservicestotheircommunities.Perhapssurprisingly,taxationauthorityinIndianCountryhasbeenoneofthemostlitigatedissuesbetweentribes,states,andlocalgovernments.Inresponse,acoalitionoftribes,intertribalorganizations,andfederalofficialshavebeenpushingforthecleararticulationoffederalIndiantaxpolicythatwouldeliminatejurisdictionalquestionsandreinstatetribalgovernments’exclusivetaxationauthorityonreservations,amongotherthings.2WhilethestateofMontanahasbeenthesettingforseveralimportantcourtbattlesoveron-reservationtaxationauthority,ithasalsobeenamorerecentleaderinseekingresolutionsthroughdetailedstate-tribalrevenuesharingagreements.UntilCongresspasseslegislationtopreemptstatetaxationonreservations,revenuesharingagreementscanprovidestateandtribalgovernmentswithsomelevelofcertaintyconcerningthedivisionofrevenuewhilesafeguardingagainstcostlylitigation.This,andthefactthatagreementscanbecraftedinmutuallybeneficialwaysthatrespecttribalsovereignty,makethemaneffective,iftemporary,solutiontotheongoingtaxationcompetitionsbetweensovereigns.Thisisthesecondinatwo-partPolicyBasicsseriesontaxesinIndianCountry.Part1providesabriefoverviewofthetaxesthatindividualIndiansinMontanapay.3Part2focusesontribalgovernmentsandthetaxestheypayandassess.Itbeginsbydelvingintothecriticalroletaxesplayincreatingareliablerevenuestreamthatcansupportgovernmentservicesandoperations,aswellasencouragingcertainbehaviorsandeconomicclimatesthroughtaxincentivesandexemptions.Thisisfollowedbyareviewofthestate-tribalrevenuesharingagreementsmadebetweenthesevenreservationgovernmentsandtheMontanaDepartmentsofRevenueandTransportation.Thereportconcludeswithasetofpolicyrecommendationstostateandtribalpolicymakersandagencypersonnelformaximizingthebenefitsofrevenuesharingfortheirrespectivegovernments.FunctionsofTaxationTaxesSupportImportantGovernmentServicesandEncourageCertainBehaviorsTaxdollarsrepresentourcollectiveefforttoinvestinourcommunitiesandcitizens.Ourtaxesfundpublicserviceslikeimprovementsinroads,bridges,schools,sewerandwatersystems,providepublicsafety,andensurethatourmostvulnerableneighborsareprotected.Governmentscanalsousetaxationtocreatebeneficialsocialandeconomicconditions.Forexample,taxingriskypublichealthbehaviorslikesmokingcanhelplimittobaccouseamong

P a g e |2www.MontanaBudget.org

citizens.Likewise,providingtaxincentivesintheformofdeductions,exclusions,orexemptionsfromataxliabilitycanpromoteeconomicdevelopmentandincreasejobopportunities.Forexample,themortgageinterestdeductionrewardshomeownershipandNewMarketsTaxCreditsincentivizeinvestinginlow-incomecommunities.Whilefederal,state,andlocalgovernmentsregularlyutilizefederaltaxandfinancingtools,theyareoftentimesdifficultfortribestouseduetorestrictivecomplianceandreportingrequirements.Forexample,inthecaseofissuingtax-exemptbondstribesmustmeetallthesamerequirementsasstates,aswellasadditionalrequirementsapplicableonlytotribes.Thisincludestheconditionthatfundscanbeusedonlyforprojectsthatrelatedirectlytotheperformanceofessentialgovernmentalfunctions—acriterionthatstatesdonothavetomeet.4Furthercomplicatingmattersfortribes,the1987OmnibusBudgetReconciliationActlimitedtheterm“essentialgovernmentalfunction”toexcludefunctionsthatarenotgenerallyperformedbystateandlocalgovernments.Beforethis,tribalessentialgovernmentalfunctionscouldincludethecommercialandindustrialactivitiesthatmanytribalgovernmentsregularlyundertakeintheireffortstogeneraterevenue.5Likewise,dualtaxationofcertainon-reservationcommercialtransactionsbybothtribesandstatesmakesitdifficultfortribestoattractbusinessestotheirreservationsbyofferingtaxincentives.Thisisbecausethetribaltaximmunitycanneverfallbelowtheexistingstatetax,thusofferingnoadditionalincentivetodoingbusinessonreservations.6Federal,State,Local,andTribalGovernmentServices&RevenueSourcesTounderstandthecomplexrelationshipoftribalgovernmentstotaxation,itisimportanttounderstandthescopeofservicestribesprovideandthefunctionstheyperform.Additionally,thestateandfederalgovernmentsalsoplayaroleinprovidingservicestoAmericanIndiansresidingbothon-andoff-reservation.Abriefdescriptionofhowthevariouslevelsofgovernmentfundtheseservicesconcludeseachsection.FederalGovernmentInverybroadterms,thefederalgovernmentfundsservicesthatincludehealthcare,education,environmentalprotection,disasterandemergencyrelief,federaljudicialsystemsandprisons,nationalparks,nationalhighwayconstructionandmaintenance,airports,postalservice,andmilitarydefense.7Thefederalgovernmentprovidessomeoftheseservicesdirectlyandalsotransfersfederaldollarstostatestooffsetaportionofstates’coststoprovidevariousservices.In2015,92percentofthe$3.18trillionintotalfederalrevenuecamefromtaxes.8Thelargestsharederivedfromindividualincometaxes(47percent)followedbypayrolltaxes(34percent),thencorporateincometaxes(11percent).Therestwascomprisedofexcise,estateandgifttaxes,andcustomsduties.9


StateGovernments-MontanaStategovernmentscommonlyprovideservicesthatincludeK-12andpost-secondaryeducationandhealthcare.Theybuildandmaintainroadsandbridges,providelawenforcement,correctionsprograms,districtcourts,naturalresourcemanagement,andassistanceforlow-incomefamilies.10Forthe2017biennium,thelargestsourceofrevenue(42percent)forMontanaisfederalrevenue,whichthestatethenappropriatesthroughthestatebudget.Thesecondlargestsourceofrevenue(37percent)isstategeneralfundrevenue,whichconsistsoftaxesthestatecollects.Thethreelargestsourcesofstategeneralfundrevenueareindividualincometax(56percent),propertytax(12percent),andcorporateincometax(sixpercent).Montanaalsocollectscertainfeesandexcisetaxeswhichareearmarkedforspecificpurposesthroughstatespecialrevenueaccounts.11 LocalGovernments-MontanaCounties,cities,andtownscompriselocalgovernmentsinMontana.Generally,localgovernmentsprovidelawenforcement,publicschools,fireprotection,andemergencyservices.Theyalsoconductelections,keepofficialrecords,providehousing,municipalcourts,publictransportation,parksandrecreationservices,andpublicworkslikesewerandstreetmaintenance,snowremoval,androadsignage.12Localgovernmentsrelyprimarilyontransfersfromfederalandstategovernments,aswellaslocalpropertytaxestoobtainrevenue.13InMontana,35percentoflocalgovernmentbudgetscamefromentitlementsharepaymentsfromthestateand34percentcamefromoflocaltaxesin2013.Thelion’sshareofthislocaltax-basedrevenuewasderivedfrompropertytaxes(96percent).14Partoftherevenuethatcountiesreceivefromthestateissharedwithschooldistricts,cities,andtowns.Fiftypercentofentitlementsharepaymentstocountiesarepassedthroughtocities.15TribalGovernments-MontanaTribalgovernmentsarefullyfunctioninggovernmentsthatprovideanarrayofservicessimilartothoseoffederal,state,andlocalgovernments.Manyoftheseservices(likereservationinfrastructure)areprovidedtothebenefitofallreservationresidents,includingnon-Indians.Otherservices(suchastribalhealthcareandhousing)areprovidedtoeligibleAmericanIndiansfromanytribe,whileothers(likescholarshipsforeducation)areprovidedspecificallytotribalmembersfromthatparticularreservation.

EntitlementSharePaymentsareannualstatepaymentstolocal

governmentstoprovide“replacement”fundingforlostrevenuedueto

legislativeactionthatrestructuredthecollectionandadministrationofvarioustaxesandfeesinthestateofMontana.

Source:MontanaCodeAnnotated15-1-121


Ingeneral,tribalgovernmentresponsibilitiesincludemanagingtriballandandresources,maintainingtribalroads,bridgesandotherreservationinfrastructure,providinghousing,conductingelections,andmaintainingpublicorderandsafety(seegraphic).Likeothergovernments,tribalgovernmentshaveelectedofficialsandemployasizeableworkforceinordertoperformessentialfunctionsandprovideservices.Infact,tribalgovernmentsareoftentimesthelargestemployersintheirgeographicareas.Thus,likeanygovernment,tribesrequirerevenuetomeettheirobligationstotheirmembers.16Whiletribalgovernmentsoperatemanyofthesamepublicservicesasotherlevelsofgovernment,theymust

operatewithouttheusualtaxrevenueotherlevelsofgovernmentrelyon.Thisisbecausestateandlocalgovernmentshavesuccessfullychallengedincourttribalgovernments’exclusiverighttolevytaxeswithintheirreservationboundariestothepointthattribaltaxationauthorityisgreatlydiminishedtoday.Thus,manytribesmustrelyontheirnaturalresourcesandtriballyownedbusinessenterprisesastheironlysourceofrevenueoutsidefederaldollars.17Evenhere,stateshavefoughtfortheabilitytoco-taxcertaineconomicactivitiesandnaturalresourcedevelopmentinvolvingnon-IndiansinIndianCountry,extractingwealthfromimpoverishedcommunitiesandcreatingasystemofdualtaxationthatcanconfoundreservationeconomicgrowth.18Theseissuesareaddressedlaterinthisreport.AmongthefewtaxesthattribalgovernmentsinMontanaassessareexcisetaxesontheon-reservationsaleofalcohol,tobacco,fuel,andseverancetaxesonnaturalresourcedevelopment.However,asaresultofrevenuesharingagreementsmadebetweenthesevenreservationtribalgovernmentsandthestateDepartmentsofRevenueandTransportation,revenuederivedfromthesetaxesissharedwiththestateofMontana.In2016,totalstatewiderevenuecollectedfromthesetaxestotaled$347.6million,with$10.6millionbeingremittedtotribalgovernments.19


Themostrecentdatashowsthatbetween2003-2009,thecombinedrevenueforalleighttribalgovernmentsinMontanatotaledmorethan$6.6billion.Thelargestsourceofrevenuewasfederalfunds(58percent).Thisincludesfederaltransfersforpublicschoolslocatedonreservationsandothereducationfunding,IndianHealthService(IHS),tribalcolleges,housing,andBureauofIndianAffairs(BIA).Morethanaquarter(26percent)ofalltribalrevenuewasearned,whiletherestwascomprisedoftransfersfromthestateofMontana(eightpercent),varioussources(sixpercent),andfiduciary(twopercent).20

FederalTransferstoTribesStemfromFederalTrustResponsibility,TreatyAgreements,andGovernmentContracts/CompactsFederaltransferstotribesaresomewhatsimilartofederaltransferstostatesforMedicaidandeducationorstatetransferstocountiestosupportschooldistricts—butwithonesignificantexception:amajorityoffederaltransferstotribesareadirectresultofthefederal-tribaltrustrelationshipandtreatyagreements.Additionally,manyfundingtransfersaremadeaspartoftribalself-determinationcontractsandself-governancecompactswhereinthefederalgovernmentcontractsandcompactswithtribalgovernmentstoadministeravarietyoffederalprogramsservingtheirreservations.ThisincludesIndianHealthServiceprogramsandotherssuchasBureauofIndianAffairslandmanagementorhousing.21PortionsofthetransfersalsostemfrompublicassistanceprogramsthatareavailabletoallotherAmericans.

Throughtreaties,tribescededcontrolofmillionsofacresoftheirhomelandstotheU.S.inexchangeforcompensationthatoftentimes

includedannuities,medicalservices,education,andhousing,

amongotherthings.


Tribesreceivingfederaldollarstocarryoutself-determinationcontractsandself-governancecompactsaresubjecttoannualaudits.Theyarealsosubjecttoannualtrustevaluationstomonitortheirexecutionofthefederaltrustfunctionstheyareperformingonbehalfofthefederalgovernment.22Althoughtribesreceivefederaldollarsforthiswork,chronic,inadequatefundingrequiresthemtoregularlysupplementprogrambudgetswiththeirownresources.23Thus,astribesassumemorelocalresponsibility,theirneedforrevenueincreasesaswell.And,asstatedearlier,tribalgovernments’abilitytobuildataxbasetosupporttheiressentialfunctionsandserviceshasbeensignificantlyusurpedbystateandlocalgovernments.Thisisdiscussedatlengthinthesectiononpage8.TaxesTribalGovernmentsPayIncomeTaxesFederallyrecognizedtribalgovernmentsdonotpaystateincometaxesbecause,inaccordancewithfederallawandU.S.SupremeCourtrulings,statescannottaxIndiantribesinIndianCountry.24Thus,federallyrecognizedtribesreceivethesameincometaxexemptionasfederalandstategovernments.However,incomegeneratedbystate-recognizedtribesorthroughtribalcorporationscharteredunderstatelawissubjecttofederalandstateincometaxation.25Tobeexempt,federallawstipulatesthattribalgovernmentrevenuemustbeearnedthoughatriballyownedcorporationcharteredundersection17oftheIndianReorganizationAct(regardlessofwhethertheincomewasearnedon-oroff-reservation).26PropertyTaxesAsdiscussedinPart1ofthisseries,theU.S.SupremeCourthasfoundthatstatelegislaturescanelecttotaxon-reservationfeelandownedbyatribeortribalmember.Becausemanystates,includingMontana,haveoptedtoexercisethisability,tribalgovernmentsmustpaypropertytaxesonanyfeelandtheyown,evenwhenitislocatedwithintheexteriorboundariesoftheirownreservation.27FederalPayrollTaxes–FUTA,FICAAsemployers,tribalgovernmentsarerequiredtopayintoeithertheFederalUnemploymentTaxAct(FUTA)taxesortheStateUnemploymentTaxAct(SUTA)taxesonbehalfoftheiremployees.28Tribalgovernmentsmustalsowithholdfromtheiremployees’grosswagesfederalincome,socialsecurity,andMedicaretaxes,alsocalledFederalInsuranceContributionAct(FICA)taxes.UnderFICA,tribesmustmatchtheiremployees’socialsecurityandMedicarecontributions.29Unlikestateandlocalgovernments,tribalgovernmentsmayberequiredtopaythesameFICAtaxesasemployersintheprivatesector.30(Seetextboxbelowformoreinformation.)


Excise(orSelectiveSales)TaxesThefederalgovernmenthasgrantedstateandlocalgovernmentsfullexemptionfromfederalexcisetaxliabilities,butbecausetheU.S.Constitutionreferstotribalgovernmentsassovereignentities,tribesaresubjecttosomefederalexcisetaxes.31Thisincludestaxesongamingwagers,foreigninsurancepolicies,harbormaintenance,andtaxesonmachineguns,destructivedevices,andcertainotherfirearms.32Inmostinstances,however,tribesaretreatedlikestateandlocalgovernmentsinrelationtofederalexcisetaxexemptions,butwithonemajorstipulation.Inordertomeettheexemptioncriteriatribalgovernmentsmustbeengagedin“essentialgovernmentalfunctions,”whilestateandlocalgovernmentsarenotheldtothesamestandard.33

OtherImpactstoTribesRelatedtoFederalPayrollTaxIssues

ThePensionProtectionActof2006establishedthattribalgovernmentretirementplansdidnotqualifyas“government”plansunlessonehundredpercentoftribalemployeesareengagedinessentialgovernmentfunctions.Becausenumeroustribesrelyheavilyontheirnaturalresourcesandtribalbusinessventurestoproducegovernmentrevenue,theytendtohaveemployeesengagedinseeminglycommercialactivities.Asaresult,retirementplansforthoseemployeesaregovernedbythesamelawsandInternalRevenueService(IRS)codesasemployer-sponsoredplansintheprivatesector.IThus,tribalgovernmentsmaybeforcedtoadministertwoseparateemployeeretirementplans—oneforworkersperformingessentialgovernmentfunctionsandanotherforthoseperformingcommercialactivities—resultinginincreasedcostsforthetribe.IRSsection457providesanexceptionallowingcertainstateandlocalgovernmentsandnon-profitemployerstocreatedeferredcompensationplansfortheiremployeesengagedincommercialactivities.Tribalgovernments,however,arenotrecognizedaseligiblegovernmentsandcannotsponsora457governmentalplan.IIInthenend,manytribeselecttooffertheiremployees401(k)retirementsavingsplans,whichoftenyieldlessthantraditionalpensionplanspartlybecausemanagementandinvestmentfeesarehigher,andpartlybecauseprofessionalmanagersofpooledpensionfundstendtogethigherreturnsthanemployeeswhomanagetheirown401(k)plans.IIITheselimitationscanputtribesatadisadvantagewhenitcomestoattractingandkeepingqualifiedemployees,towhomajobwithgoodbenefitsandasecureretirementincomeisimportant.Furthermore,althoughtheIRSacknowledgesthattribalmembersemployedtoserveascouncilrepresentativesareinfacttribalemployeeswhosewagesaresubjecttofederalincometaxassessments,theyalsoholdthecontradictoryviewthattribalcouncilmemberserviceisnot“employment”forFICAwithholdingpurposes.Thus,tribalcouncilmembersmustpayfederalincometaxesontheirwages(whichtheycanhavevoluntarilywithheldbythetribe),buttheycannotcontributetoorreceivesocialsecurityandMedicarebenefitsinrelationtotheirserviceonthecouncil.IVAbillcurrentlybeforeCongress(S.1309/H.R.2860)seekstoremedythissituationbyallowingtribalcouncilstoenterintoagreementswiththeCommissionerofSocialSecuritytoobtainsocialsecuritycoveragefortheirservicetotheirtribalnations.V


OverviewofTaxationAuthorityonReservationsTribalGovernmentsRetaintheirSovereignPowertoTaxThepowertotaxisaninherentrightofself-governmentandisoneofmanyrightsstillretainedbyAmericanIndiantribes.Whiletribalgovernmentsonceheldexclusivetaxationauthorityontheirreservations,includingovernon-Indians,stateandlocalgovernmentshaverepeatedlychallengedthisauthority.Astheinformationprovidedbelowattests,thestateofMontanaandthetribeslocatedherehavebeenactiveparticipantsinthesedebates,aswellasworkingtogethertofindreasonablesolutionstowhichbothgovernmentscanagree.BelowisanoverviewoftribalandstatetaxationauthorityinIndianCountry,aswellasareviewofthetaxesthattribalgovernmentscommonlydoanddonotassesstoday.Itisimportanttonotethatthisareaoftriballawisfluidanddynamic,everaffectedbytheevolvingmakeupoftheU.S.SupremeCourtandstateandtriballeadership.TribalTaxationAuthorityOverTribalMembersonReservationsDuetotheirsovereignstatus,tribalgovernmentscanunilaterallyimposetaxesontheirownmembersresidingontheirreservation.However,thereareveryfewtribesthattaxtheirmemberpopulations.34Thesetaxesarediscussedinthefollowingsectionofthisreport.TribalTaxationAuthorityOverNon-IndiansonReservationsOverthepastfewdecades,tribaltaxationauthorityovernon-IndiansonreservationshasbeenheavilycontestedandsignificantlylimitedbyaseriesofU.S.SupremeCourtrulings.In1981,inanimportantcaseinvolvingtheCrowTribeandthestateofMontana,thecourtformalizedtheextentoftribalauthorityovernon-IndiansonreservationsacrossAmerica.Theseresulting“Montanaexceptions,”whenappliedtotaxation,providethattribescanimposetaxesonnon-Indiansviacommercialtransactionsthatoccuronreservationtrustland.Theycanalsoimposetaxesonnon-Indiansviacommercialtransactionsoccurringonreservationfeelandwhen:

• thenon-Indianindividualorentitybeingtaxedhasenteredintoaconsensualcontractualagreementwithatribeortribalmember;or

• theactivitybeingtaxedthreatensorhassomedirecteffectonthepoliticalintegrity,economicsecurity,orhealthorwelfareofthetribe.35

Theresolutionofdisputesoveron-reservationtaxationauthority

generallydependsuponthespecificdetailsofeachcaseandtheweighingoffederalandtribalinterestsagainst

thoseofthestateaccordingtoacomplexsetof“tests”developedby

theU.S.SupremeCourt.


StateTaxationAuthorityOverIndiansonReservationsInaccordancewithfederallawandU.S.SupremeCourtrulings,statescannottaxtribesortribalmembersontheirownreservations.36Oneexceptionispropertytaxesonreservationfeelandownedbyatribeortribalmember.37StateTaxationAuthorityOverNon-IndiansonReservationsAlthoughstatescannotimposetaxesontribesortribalmembersontheirreservations,federalcourtshavefoundthatstatescanlevycertaintaxesonnon-IndiansinIndianCountrywhen:

• federallawdoesnotexplicitlyprohibitthetax;and• thetaxdoesnotinterferewiththetribe’sabilitytoperformitsgovernmentalfunctions.38

Examplesofthesetaxesarediscussedinthefollowingsectionofthisreport.ConcurrentState-TribalTaxationAuthorityonReservationsAddingtothecomplexityofjurisdictionalquestions,theU.S.SupremeCourthasalsofoundthatincertaincircumstancesbothtribalandstategovernmentshavetherighttotaxthesameinstance.39Thisfindinghasresultedinnumerouscomplications,includingdualtaxation.Fornon-tribalmembersdoingbusinessonreservations,havingtopaytribalandstatetaxesonthesameactivityresultsinhighercosts.Thiscandriveawaybusinessesandreducecommercialactivityonreservations.Italsolimitstribes’abilitytodevelopataxbasetosustainreservationinfrastructures,economies,andessentialtribalgovernmentfunctionsandservices,whichincreasestribes’relianceonfederaldollars.Areviewoftaxesthattribalgovernmentscommonlydoanddonotassesstodayisbelow.TaxesTribalGovernmentsAssessIncomeTaxesIncometaxesaretheprimarysourceofrevenueformanygovernments.Tribalgovernments,likefederalandstategovernments,havetherighttotaxtheincomeoftheirownmembers,butfew,ifany,actuallydo.Eachtribehasitsownreasonsstemmingfromitsuniquehistoryandculturalviewsonthematter.However,widespreadpovertyandhighratesofunemploymentcommononmanyreservationsplaysintotheunfeasibilityoftaxingtribalmemberincome.In2015,morethan28percentofallAmericanIndianslivingonreservationsintheU.S.livedbelowthepovertyline.40Thisnumberincreasedto36percentforfamilieswithchildren.41InMontana,thecombinedaverageofreservation-residingAmericanIndianslivinginpovertybetween2011and2015was34percent.42Likewise,theBureauofIndianAffairsestimatesthattribalmemberunemploymentwasashighas70percentonsomereservationsinthestatein2005.43


PropertyTaxesBesidestaxingincome,propertyisanothermajorsourceoftaxrevenueforstateandlocalgovernments.Tribalgovernments,however,areunabletoderiverevenuebytaxingreservationland.Thisisbecausethetitletomostreservationlandfallsintooneoftwotypesofstatus:trustorfee.Landownedcollectivelybythetribe,aswellaslandallottedtoindividualtribalmembers,iscalledtrustlandandisheldintrustfortribesbythefederalgovernment.Trustlandcannotbetaxed.44InMontana,reservationtrustlandconstitutesasmuchas100percentofsomereservations.45Further,duetotheforcedallotmentofmanyreservationstherearenowparcelsoffeelandthatareprivatelyownedandsubjecttopropertytaxassessments.Absentanexemptionunderstatelaw,theU.S.SupremeCourthasfoundthatitisstateandcountygovernments—nottribes—thatcantaxfeelandsonreservations.46

Reservation %TrustLand(Tribal&Individual) %FeeLandBlackfeet 63 36Crow 68 32Flathead 56 32FortBelknap 97 3FortPeck 46 54NorthernCheyenne 99 1RockyBoy’s 100 0

Source:TribalNationsinMontana:AHandbookforLegislators,2016

HotelOccupancyTaxesTribeshaveexclusiveauthoritytoimposehoteloccupancytaxesonallpatrons,includingnon-Indians,whostayattribally-ownedhotelsandprivatehotelslocatedontribaltrustlandwithintheirreservationboundaries.47A2002districtcourtrulingconfirmedthiswhentheMontanaDepartmentofRevenuesuedtheConfederatedSalishandKootenaiTribesforfailingtocollectandremitthestatebedtaxfromnon-IndianpatronsstayingatthetribalKwaTaqNukResort.Thecourtfoundthatthestatelackedauthoritytoimposeitstaxintribalhotels,evenwhenthetaxfallsonnon-Indians.48Tribescannot,however,imposetheirhoteloccupancytaxinreservationhotelsownedbynon-Indiansoperatingonfeeland.49Patronsstayingatthesehotelsareinsteadsubjecttopayingstatebedtaxes.UtilityTaxesANinthCircuitCourtofAppealscaseinvolvingtheCrowTribeaffirmedtherightofatribetoimposeutilitytaxesoncompaniesthathaveenteredintoacontractualrelationshipwithatribe.50Becauseutilitytaxesarebusinessactivitytaxes,theycanbepassedontoallratepayers,Indianandnon-Indianalike,withinaservicearea.Thus,non-Indianconsumerslivingonreservations(includingonfeeland)mustpaytribalutilitytaxeswheneverthetaxesarepassedthroughbyutilitycompanieswithwhichthetribehasacontractualrelationship.


Today,severaltribesacrossthecountryhaveimposedutilitytaxesonservicessuchastelecommunications,railroads,solidwastecollections,andelectricalpower.InMontana,theBlackfeetNation,CrowTribe,andtheFortPeckTribeseachassessvarioustribalutilitytaxes.51SeveranceTaxesTribalgovernmentscanimposeseverancetaxesonnaturalresourcedevelopmentoccurringontheirreservations.Further,ina1985precedent-settingcaseinvolvingthestateofMontanaandtheBlackfeetTribe,theU.S.SupremeCourtfoundthatstatescannottaxroyaltypaymentsreceivedbytribesfromnaturalresourcedevelopmentleaseswithnon-Indians.52Followingthisdecision,theU.S.SupremeCourtruledinCrowTribev.Montanathatstatesalsocannotimposeseveranceorgrossproceedstaxesontribalmineralleaseswithnon-Indianswhenatribehasretainedmineralrightstotheland,includingonformertriballandnowlocatedoff-reservation.53RetailSalesandUseTaxesTribescanlevyretailsalesandusetaxesonIndianandnon-Indianconsumersalikeontransactionsoccurringonreservationtrustland.54Likewise,stateretailsalesandusetaxescannotbeimposedontransactionsenteredintobyIndiansontheirownreservationsoronproductsproducedandsoldbyatribe.55ThereisnotastatewideretailsalestaxinMontana,nordoanyofthesevenreservation-basedtribalgovernmentsinMontanaassessretailsalesorusetaxes.Excise(orSelectiveSales)Taxes

Asdescribedabove,tribeshavetherighttolevyexcise,orselectivesales,taxesoncommercialactivityontheirreservations.InaseriesofU.S.SupremeCourtcasesincludingoneinvolvingtheConfederatedSalishandKootenaiTribes,thecourtestablishedthatincertaininstances(suchascigarettesales)statescanimposetheirtaxonnon-Indiansmakingpurchasesonreservations

regardlessofwhetherornotthetransactionsoccurontrustland.56Intheseinstances,non-Indianconsumersaresubjecttoboththetribalandstatetax,resultingindualtribalandstatetaxationofthesameactivity.

AdditionalDangersofDualTaxation

Statesthatchoosetolevytaxesonnon-IndiansinIndianCountryregardlessoftheexistenceofatribaltaxsystemeffectivelyunderminethetribaltax,puttingtribesinadifficultposition.Tribesmustchoosebetweenforegoingtheirtaxandtheoftentimesmuch-neededrevenueorimposingtheirtaxandpotentiallydrivingbothpeopleandbusinessesfromtheirreservations.

Dualtaxationalsolimitsatribe’sabilitytooffertaxincentives,asthetribaltaximmunitycouldneverfallbelowtheexistingstatetax,thus,offeringnoaddedincentivefordoingbusinesson-reservation.

Usetaxesaresalestaxesonout-of-statepurchasesthatwouldhavebeensubjecttoastatesalestaxhadtheybeenmadein-state.Whileretailerssubmitsalestaxestostaterevenue

departments,residentsarerequiredtotrackandsubmitusetaxes.


Further,theU.S.SupremeCourthasfoundthatstatescanrequiretribalbusinessestocollectandremitvalidlyimposedstateexcisetaxesonpurchasesmadebynon-Indiansonreservations.57However,thecourtalsofoundthattribalsovereignimmunityprotectstribesfromlawsuitsbystateandlocalgovernmentsforthecollectionofstatesalestaxes.Thecourtofferedseveralsuggestions,includingstatesandtribesenteringintoagreementsforthecollectionofthesetaxes.58In1993,thissuggestionledtheMontanalegislaturetoamendthe1981State-TribalCooperativeAgreementsActtospecificallyincludecooperativetaxagreementswithtribes.59Montana’sState-TribalRevenueSharingAgreementsThestateofMontanaandthesevenreservationtribalgovernmentshavenegotiatedelevenrevenuesharingagreementsforexcisetaxesontheon-reservationsaleofalcohol,tobacco,andfuel,andinoneinstance,oilandnaturalgasproduction.60Asthechartonpage14depicts,noteverytribalgovernmenthasenteredintoanagreementforeachofthesetaxes.Althougheachrevenuesharingagreementisindependentoftheothers,theyareallsimilar.Eachonestatesthatitsgeneralpurposeistoavoidlegalcontroversy,possiblelitigation,anddualtaxation.Theagreementsalsocontainsectionsdetailingapplicablestateandtribaltaxlaws,thecollectionandadministrationofthetax,andterminationanddurationoftheagreement.Althoughacoupledonot,mostoftheagreementsaresetuptoautomaticallyrenewifthepartiesdonotmeetpriortotheexpirationdate.Manyoftheagreementsalsoincludemutuallimitedwaiversofstateandtribaloronlytribalsovereignimmunity.ManybutnotallagreementsalsocontainastipulationthatvenueandjurisdictionforenforcementoftermswillbetheU.S.DistrictCourt,orifthatcourtlacksjurisdiction,MontanaDistrictCourt.61InMontana,excisetaxesonalcoholandtobaccoareimposedatthedistributorlevelandincludedinthesalepriceoftheitem.Generally,thestatepre-collectsalltaxesonalcohol,tobacco,andfuelsoldonthereservationsandthenremitsaportionofeachtaxtothetribalgovernments.Tribesreceiveaportionofthetaxesonliquor,beer,wine,andhardciderconsumedontheirreservation,whichisanapproximationoftheon-reservationsalestoenrolledtribalmembers.Alcoholtaxrefundstotribesaredeterminedbymultiplyingthestategeneralfundportionoftaxreceiptsstatewidebythenumberofenrolledtribalmemberslivingonthereservation.62(Sixty-ninepercentoftheoverallstatewidetaxreceiptsgoesintothegeneralfund,fromwhichthetribalshareistaken.Theremaining31percentgoestotheMontanaDepartmentofPublicHealthandHumanServicesfortreatment,rehabilitation,andpreventionofalcoholismandchemicaldependency.63)Likewithalcoholtaxes,tribesreceiveaportionofthetaxesoncigarettesandtobaccoproductsconsumedontheirreservation,which,again,isanapproximationofsalestoenrolledtribalmembers.Tobaccotaxrefundstotribesarecalculatedbymultiplying150percentofthe


Montanapercapitatobaccotaxcollectedbythetotalnumberofenrollmenttribalmemberslivingonthereservation.64Fueltaxrefundstotribesrepresentaportionofthegasolinelicensetaxcollectedon-reservation,andareagain,approximationsofsalestoenrolledtribalmemberslivingonthereservation.Fueltaxrefundstotribesarebasedonthestatewidepercapitagasolinelicensetaxreceiptsmultipliedbythenumberofenrolledtribalmembersresidingonthereservation,minusaonepercentadministrationfeeretainedbythestate.Thepercapitagasolinelicensetaxisbasedonthepriorfiscalyear’sgrosstotalofgasolinelicensetaxescollectedbythestate,adjustedbyanyrefunds,credits,corrections,audits,minusanystatutoryandlegislativeallocations(suchasthe16percentsetasidetolocalgovernments).65On-reservationtribalpopulationcountsaredetermined(and,inmanycases,verifiedbyaffidavit)inanumberofways.Mostagreementsrelyonthetribe’sofficialenrollmentofficerecords,however,somerequireadditionalrecordssuchasproofofaddressforindividualtribalmembersorthetribe’smostrecentvotinglistfortribalelections.66Theonlyoilandgasrevenuesharingagreementactivein2016wasbetweentheFortPeckTribesandthestate,anditconcernsonlynewoilandnaturalgasproduction.(ThisagreementexpiredonJune30,2017.)Thisbreakdownofrevenuewasdetermineddifferentlythanintheotherrevenuesharingagreements.Here,itwasdividedequallybetweenthetribeandstate.ThisisbasedonthestatedreasonthatboththeFortPeckTribesandthestateshareequaltaxationauthorityovertheon-reservationoilandnaturalgasproductionbynon-tribalmembers.67In2016,totalrevenuetothestateofMontanafromtobaccoandalcoholtaxwas$104.9millionwhilethetotalcombinedtribalgovernmentsharewas$5.7million.68Totalrevenuetothestatefromgrossmotorfueltaxeswas$232millionandthetotalcombinedtribalsharewas$5.1million.69NeitherthestateofMontananortheFortPeckTribesderivedanyrevenuefromnewoilandnaturalgasproductiononFortPeckin2016.However,totalrevenuetothestatefromoilandnaturalgasproductiontaxeswas$84.9millionthatfiscalyear.70ThechartbelowdepictsthebreakdownofMontanaandtribalgovernmentalcohol,tobacco,fuel,andoilandnaturalgastaxrevenuein2016.


BenefitsandDangersofIntergovernmentalRevenueSharingAgreementsMontana’sstate-tribalrevenuesharingagreementshavesuccessfullyeliminatedthethreatofdualtaxationandcostlylitigationwhileprovidingstateandtribalgovernmentswithadegreeofcertaintyregardingthedivisionofrevenue.However,thereisroomforinnovation.EveryassertionofstateandlocaltaxesinIndianCountryresultsinacorrespondingdecreaseinatribe’spotentialtaxbase,nottomentionanencroachmentontribes’once-exclusivetaxationauthorityontheirownreservations.Butthisisnottosaythattribeshavenothingtogainbyenteringintorevenue-sharingagreementswithstates,particularlygiventhecurrentstateoffederalIndiantaxpolicyandfederalcourtrulings.Atminimum,theseagreementsenabletribestoachievecertaintyonintergovernmentaltaxissues.Theyalsoprotectcurrenttribaltaxationauthoritybyeliminating,or“preempting,”additionallegalchallenges.71Intermsofbenefitstostates,revenuesharingagreementsenabletheassertionandcollectionofstatetaxesinIndianCountrythatwouldotherwiseprovedifficulttoachieveduetounresolvedlegalquestionsand/ortribalsovereignimmunity.Achievingtheseideals,however,requiresthatbothstateandtribalgovernmentsunderstandtheshort-andlong-termimplicationsoftheiragreements,adheretotheprinciplesoffair


apportionment,andfullycomprehendthedangersofextractingwealthfromIndianCountrywithoutatleastequalreinvestmentonthepartofthestate.72Statesandtribescanreducesomeofthesedangersbyemployingflexibilityindeterminingtermsincludingthemethodsusedtocalculatestateandtribalshares.Forexample,ifatribeisactivelyworkingtocreateorimplementalong-rangeeconomicdevelopmentplanorvaluablesocialprogram,therevenuesharingagreementtermscanbecraftedtosupportthiseffort.Thestatemayagreetoacceptasmallershareoftaxrevenueduringacriticalphaseoragreetoreinvestitsshareintotheprojectforaspecifiedperiodoftime.ThegoalofensuringthatthewealthtakenoutofIndianCountrygetsreinvestedtherecanbefurtheredbyexploringnewareasofon-reservationtaxationagreementswherestateandlocalgovernmentscurrentlyhavesoletaxationauthority.(Oneexampleispropertytaxationofon-reservationfeeland.)After40yearsoflitigation(referencedearlier)overwhetherornotMontanacantaxtheoff-reservationproductionofcoalownedbytheCrowTribe,thetwosidescametogetherinawaythatdemonstratestherangeofpossibilitiesforcraftingintergovernmentaltaxagreements.Partoftheagreemententailsthetriberepealingitsseverancetaxonthecoal,enablingthestatetoimposeitstax.Inexchange,thestateagreedtoremittothetribetheseveranceandgrossproceedstaxrevenueitcollectsonthetribe’scoal.73Thefactthatagreementscanbeflexiblycraftedininnovativeandmutuallybeneficialwaysthatrespecttribalsovereigntymakethemaneffective,iftemporary,solutiontotheongoingtaxationcompetitionsbetweensovereigns.PolicyRecommendationstoStateandTribalPolicymakersandAgencyDirectors

• Worktoensurethatstateandtribalgovernmentleadersunderstandtheshort-andlong-termimplicationsoftheiragreementsbyassessingtheimpactsofpastagreements.

• Adheretotheprinciplesoffairapportionmenttoinsuretaxpayersagainstduplicativetaxationandtoensurethateachtaxingauthorityisrestrictedtoitsrightfuljurisdiction.74

• GivecarefulconsiderationtothedangersthatextractingwealthfromIndianCountryposestothedeliveryoftribalgovernmentservicesandfunctions,andtotheeconomichealthofreservationsandthestateasawhole.

• Committoreinvestingstateandlocaltaxdollarscollectedfromreservationsbackintoreservationcommunitiesatleastequaltowhathasbeenwithdrawn.

1Merrionv.JicarillaApacheTribe,455U.S.130(1982).2Acoalitionoftribesandintertribalorganizationshasbeenworkingfor:federalpreemptionofallstatetaxesonreservations;tribaltaxparitywithstates;excisetaxexemptionandtheeliminationofthe“essentialgovernmentfunction”testfortribes;taxexemptbondsincludingprivateactivitybonds;tribalemployeebenefitandpensionplans(andtheeliminationofthecommercialversusgovernmentaldistinction);triballyfundedandcontrolledcharities(whichneedtobeclassifiedaspubliccharities,likestate-fundedones);treatmentasstatesforpurposesoffederalstreamlinedsalestaxlegislation.(NationalCongressofAmericanIndians,“CurrentTaxNeedsInIndianCountry.”http://www.ncai.org/initiatives/partnerships-initiatives/ncai-tax-initiative/NCAI_Tax_Reform_Briefing_Paper.doc.;SeealsotheNationalCongressofAmericanIndiansIntertribalTaxInitiativewebsiteforadditionalinformation:http://www.ncai.org/initiatives/partnerships-initiatives/ncai-tax-initiative/ncai.)


3MontanaBudgetandPolicyCenter,“PolicyBasics:TaxesinIndianCountry,Part1:IndividualTribalMembers,”July2017.http://www.montanabudget.org/wp-content/uploads/2017/07/Policy-Basics-Indian-Country-Taxes-Part-1-FINAL.pdf.4U.S.JointCommitteeonTaxationStaff,“OverviewofFederalTaxProvisionsRelatingtoNativeAmericanTribesandTheirMembers,”July22,2008.http://www.jct.gov/x-61-08.pdf.5U.S.JointCommitteeonTaxationStaff,“OverviewofFederalTaxProvisionsRelatingtoNativeAmericanTribesandTheirMembers,”July22,2008.http://www.jct.gov/x-61-08.pdf.6F.MichaelWillis,“ThePowertoTaxEconomicActivityinIndianCountry,”Naturalresources&Environment,Vol.28,No.4,Spring2014.http://www.hsdwlaw.com/system/files/articles/NRE_v28n04_feat02_Willis.pdf.7U.S.Government,“U.S.GovernmentServicesandInformation.”https://www.usa.gov/topics.8U.S.OfficeofManagementandBudget,“BudgetoftheU.S.Government:AFoundationforAmericanGreatness,FiscalYear2018.”https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf.9NationalPrioritiesProject,“FederalRevenue:WhereDoestheMoneyComeFrom:FederalBudget101.”https://www.nationalpriorities.org/budget-basics/federal-budget-101/revenues/#endnotes.10CenterofBudgetandPolicyPriorities,“PolicyBasics:WhereDoOurStateTaxDollarsGo?”https://www.cbpp.org/research/state-budget-and-tax/policy-basics-where-do-our-state-tax-dollars-go.U.S.InternalRevenueService,“Publication963(Rev.11-2014):FederalStateReferenceGuide.”November2013.https://www.irs.gov/pub/irs-pdf/p963.pdf.11“MontanaLegislativeBudgetAnalysis:2019Biennium,”http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/Budget-Analysis/Volume-1/0Volume1.pdf.12U.S.WhiteHouse,“State&LocalGovernment.”https://www.whitehouse.gov/1600/state-and-local-government.U.S.InternalRevenueService,“Publication963(Rev.11-2014):FederalStateReferenceGuide.”November2013.https://www.irs.gov/pub/irs-pdf/p963.pdf.13U.S.DepartmentoftheTreasury,“EconomicsofTaxation.”https://www.treasury.gov/resource-center/faqs/Taxes/Pages/economics.aspx.14MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016,p.14.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf.15MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016,p.356.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf.16KellyS.CromanandJonathanB.Taylor,“WhyBeggarThyIndianNeighbor?:TheCaseforTribalPrimacyinTaxationinIndianCountry.”NativeNationsInstitution,TheArizonaBoardofRegents,andtheHarvardProjectonAmericanIndianEconomicDevelopment.2016.http://nni.arizona.edu/application/files/8914/6254/9090/2016_Croman_why_beggar_thy_Indian_neighbor.pdf.17NationalCongressofAmericanIndians,“IndianNationsintheUnitedStates.”http://www.ncai.org/about-tribes/indians_101.pdf.18F.MichaelWillis,“ThePowertoTaxEconomicActivityinIndianCountry,”Naturalresources&Environment,Vol.28,No.4,Spring2014.https://www.americanbar.org/publications/natural_resources_environment/2013-14/spring/the_power_tax_economic_activity_indian_country.html.19“PartnersinBuildingaStrongerMontana:2016State-TribalRelationsReport,”MontanaGovernor’sOfficeofIndianAffairs,September2016.https://tribalnations.mt.gov/Portals/34/TribalAffairs_AR_2016bWEB.pdf;MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf;MontanaDepartmentofTransportation,“2016FactBook,”https://www.mdt.mt.gov/publications/docs/brochures/factbook.pdf.20Thecategory“various”includes:Moniesreceivedfromsmall,oftentimesnon-recurring,competitivefederalandstategrantprogramsandprivatesources.Thecategory“fiduciary”includes:Revenuethatcomesfromassetsheldbyanentityinatrusteecapacityorasanagentforindividuals,othergovernments,and/orotherfundssuchasapensionorthestudentactivityaccountsheldbyschooldistricts.MontanaDepartmentofCommerce,“EconomicContributionsofReservationstotheStateofMontana,2003-2009.”http://www.ceic.mt.gov/Documents/Miscellaneous/FinalEconomicContributionsNarrative2.pdf.21MontanaDepartmentofCommerce,“EconomicContributionsofReservationstotheStateofMontana,2003-2009.”http://www.ceic.mt.gov/Documents/Miscellaneous/FinalEconomicContributionsNarrative2.pdf.22LauraDavis,“TestimonyofLauraDavis,AssociateDeputySecretary,U.S.DepartmentoftheInterior,BeforetheHouseNaturalResourcesCommitteeonH.R.4347,theDepartmentoftheInteriorTribalSelf-GovernanceAct,”June9,2010.https://www.doi.gov/ocl/hearings/111/DOITribalSelfGovernance_060910.23LauraDavis,“TestimonyofLauraDavis,AssociateDeputySecretary,U.S.DepartmentoftheInterior,BeforetheHouseNaturalResourcesCommitteeonH.R.4347,theDepartmentoftheInteriorTribalSelf-GovernanceAct,”June9,2010.https://www.doi.gov/ocl/hearings/111/DOITribalSelfGovernance_060910;KellyS.CromanandJonathanB.Taylor,“WhyBeggarThyIndianNeighbor?:TheCaseforTribalPrimacyinTaxationinIndianCountry.”NativeNationsInstitution,TheArizonaBoardof


Regents,andtheHarvardProjectonAmericanIndianEconomicDevelopment.2016.http://nni.arizona.edu/application/files/8914/6254/9090/2016_Croman_why_beggar_thy_Indian_neighbor.pdf.24U.S.Constitution,Article6,Clause2;OklahomaTaxCommissionv.ChickasawNation,515U.S.450,458(1995);OklahomaTaxCommissionv.Sac&FoxNation,508U.S.114,126(1993);Moev.ConfederatedSalish&KootenaiTribes,425U.S.463,475(1976);LummiIndianTribev.WhatcomCounty,5F.3d1355,1357(9thCir.1993);StandingRockSiouxTribev.Janklow, 103 F. Supp. 2d 1146, 1153-54 (D.S.D. 2000); Montana v. Blackfeet Tribe, 471 U. S. 759, 764 (1985).25U.S.InternalRevenueService,“RevenueRuling94-16.”https://www.irs.gov/pub/irs-tege/rr94_16.pdf.26U.S.InternalRevenueService,“RevenueRuling94-16.”https://www.irs.gov/pub/irs-tege/rr94_16.pdf.27CountyofYakimav.ConfederatedTribesandBandsofYakimaNation,502U.S.251(1992).28U.S.InternalRevenueService,“EmploymentTaxforIndianTribalGovernments.”https://www.irs.gov/pub/irs-pdf/p4268.pdf.29U.S.InternalRevenueService,“EmploymentTaxforIndianTribalGovernments.”https://www.irs.gov/pub/irs-pdf/p4268.pdf.30YuleKim,“FederalTaxationofIndianTribesandMembers,”CongressionalResearch,October26,2007,http://congressionalresearch.com/RL34220/document.php?study=Federal+Taxation+of+Indian+Tribes+and+Members.TheexceptionfortribalgovernmentobligationsforFUTAandFICAisonwagespaidtotribalmemberemployeesfortreatyfishingrights-relatedactivitiessecuredbythatparticulartribeandexercisedspecificallywithinthattribe’swaters.Thefishingentitymustalsomeetonehundredpercenttribalownershipcriteria.(U.S.InternalRevenueService,“EmploymentTaxforIndianTribalGovernments.”https://www.irs.gov/pub/irs-pdf/p4268.pdf.)31U.S.InternalRevenueService,“IndianTribalGovernments:FrequentlyAskedQuestion#2.”https://www.irs.gov/government-entities/indian-tribal-governments/itg-faq-2-answer-how-are-indian-tribes-like-state-and-local-governments-when-it-comes-to-excise-taxes.32U.S.InternalRevenueService,“RevenueRuling:ApplicationofExciseTaxestoIndianTribalGovernments,”December27,1994.https://www.irs.gov/pub/irs-tege/revenue_ruling_94-81.pdf.33U.S.InternalRevenueService,“RevenueRuling:ApplicationofExciseTaxestoIndianTribalGovernments,”December27,1994.https://www.irs.gov/pub/irs-tege/revenue_ruling_94-81.pdf.34WilliamC.Canby,Jr.,AmericanIndianLawinaNutshell,3rded.(St.Paul,MN:WestGroup,1998).35Montanav.UnitedStates,450U.S.544(1981).36U.S.Constitution,Article6,Clause2;LoneWolfv.Hitchcock,187U.S.553(1903).OklahomaTaxCommissionv.ChickasawNation,515U.S.450,458(1995);OklahomaTaxCommissionv.Sac&FoxNation,508U.S.114,126(1993);Moev.ConfederatedSalish&KootenaiTribes,425U.S.463,475(1976);LummiIndianTribev.WhatcomCounty,5F.3d1355,1357(9thCir.1993);StandingRockSiouxTribev.Janklow,103F.Supp.2d1146,1153-54(D.S.D.2000).37CountyofYakimav.ConfederatedTribesandBandsoftheYakimaNation,502U.S.251(1992).38Washingtonv.ConfederatedTribes,447U.S.134(1980).39CottonPetroleumCorp.v.NewMexico,490U.S.163(1989).40U.S.Census,2011-2015AmericanCommunitySurvey5-YearEstimates,“PovertyStatusinthePast12MonthsbySexandAge(AmericanIndianandAlaskaNativeAlong).”https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_15_5YR_B17001C&prodType=table.41KidsCountDataCenter,“Childreninpovertybyraceandethnicity:2015,2016.”http://datacenter.kidscount.org/data/tables/44-children-in-poverty-by-race-and-ethnicity?loc=1&loct=1#detailed/1/any/false/870,573/10,11,9,12,1,185,13/324,323.42U.S.Census,2011-2015AmericanCommunitySurvey5-YearEstimates,“MyTribalArea”foreachreservationinMontana.https://www.census.gov/tribal/?utm_medium=email.43MontanaDepartmentofLaborandIndustry,ReservationProfiles.October11,2013.http://lmi.mt.gov/Publications/PublicationsContainer/category/reservation-profiles.44NationalCongressofAmericanIndians,“Taxation.”http://www.ncai.org/policy-issues/tribal-governance/taxation.45MontanaLegislativeServices&MargeryHunterBrownIndianLawClinic,TribalNationsinMontana:AHandbookforLegislators.RevisedOctober2016.http://leg.mt.gov/content/For-Legislators/Publications/tribal-nations-handbook-october2016.pdf.46CountyofYakimav.ConfederatedTribesandBandsofYakimaNation,502U.S.251(1992).47Montanav.UnitedStates,450U.S.544(1981);AtkinsonTradingCo.v.Shirley,523U.S.645(2001).48BobAnez,“KwaTaqNukresort:Statesuestocollectlodgingtax,”Missoulian.October10,2000.http://missoulian.com/uncategorized/kwataqnuk-resort-state-sues-to-collect-lodging-tax/article_78fc53ff-a047-5dcd-ba85-207692b08879.html;JohnStromnes,“Statedropstaxsuitvs.resort,”Missoulian,October22,2002.http://missoulian.com/state-drops-tax-suit-vs-resort/article_57eada10-e480-5333-8868-b2d7aa1860a1.html.49Montanav.UnitedStates,450U.S.544(1981);AtkinsonTradingCo.v.Shirley,523U.S.645(2001).SeealsoJamesR.Bellis,“TribalHotelOccupancyTaxes,”2008.http://www.lawseminars.com/materials/08TRIBTWA/tribtwa%20m%20Bellis_B_2-5.pdf.50RobRoySmith,“TheTribalTaxManCometh—RecentDevelopmentsinIndianTaxationLaw,”TheAdvocate,January2005.http://www.msaj.com/papers/taxman.pdf.


51SeeNorthwesternEnergy,“CommunityWorks:2017Report.”http://www.northwesternenergy.com/docs/default-source/documents/community/community_report.pdf.52Montanav.BlackfeetTribeofIndians,471U.S.759(1985).53CrowTribev.Montana(1987),819F.2d895(9thCir.1987),summ.aff'd,484U.S.997(1988).54Washingtonv.ConfederatedTribesofColvilleIndianReservation,447U.S.134(1980).55U.S.DepartmentoftheInterior:IndianAffairs,“FrequentlyAskedQuestions.”https://www.bia.gov/frequently-asked-questions;SeealsoWashingtonv.ConfederatedTribesofColvilleIndianReservation,447U.S.134(1980).56OklahomaTaxCommissionv.CitizenBandofPotawatomiIndianTribeofOklahoma,498U.S.505(1991);Moev.ConfederatedSalishandKootenaiTribes.425U.S.463,475(1976);Washingtonv.ConfederatedTribesofColvilleIndianReservation,447U.S.134(1980).57Moev.ConfederatedSalishandKootenaiTribes.425U.S.463,475(1976);Washingtonv.ConfederatedTribesofColvilleIndianReservation,447U.S.134(1980).58OklahomaTaxCommissionv.CitizenBandofPotawatomiIndianTribeofOklahoma,498U.S.505(1991).59AndrewHuff,“MemorandumRe.State-TribalRevenueSharing,”October18,2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/huff-memo.pdf.60AndrewHuff,“State-TribalRevenueSharingMemorandumtoState-TribalInterimRelationscommittee,”October18,2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/huff-memo.pdf61MontanaLegislativeServicesStaff,“LegalUnderpinningofState-TribalTaxAgreements,”2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/legal-underpinnings.pdf.62MontanaLegislativeServicesStaff,“LegalUnderpinningofState-TribalTaxAgreements,”2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/legal-underpinnings.pdf.63MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf.64MontanaLegislativeServicesStaff,“LegalUnderpinningofState-TribalTaxAgreements,”2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/legal-underpinnings.pdf.65AndrewHuff,“State-TribalRevenueSharingMemorandumtoState-TribalInterimRelationscommittee,”October18,2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/huff-memo.pdf;Seealso“ConfederatedSalishandKootenaiTribes-MontanaAlcoholicBeveragesTaxAgreement,”September29,2014.https://revenue.mt.gov/Portals/9/individuals/tribe_state_agreements/SalishKootenai-AlcoholicBeverages-TaxAgreement.pdf.66MontanaLegislativeServicesStaff,“LegalUnderpinningofState-TribalTaxAgreements,”2015.http://leg.mt.gov/content/Committees/Interim/2015-2016/State-Tribal-Relations/Meetings/Oct-2015/legal-underpinnings.pdf.67FortPeckTribesandStateofMontanaOilandNaturalGasProductionTaxAgreement,”March28,2008.https://revenue.mt.gov/Portals/9/individuals/tribe_state_agreements/Fort_Peck_Oil_Gas_Agreement.pdf.68MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf.69MontanaDepartmentofTransportation,“2016FactBook.”https://www.mdt.mt.gov/publications/docs/brochures/factbook.pdf;MontanaGovernor’sOfficeofIndianAffairs,“PartnersinBuildingaStrongerMontana:2016State-TribalRelationsReport.”https://tribalnations.mt.gov/Portals/34/TribalAffairs_AR_2016bWEB.pdf.70MontanaDepartmentofRevenue,“BiennialReport,”July1,2014-June30,2016.https://revenue.mt.gov/Portals/9/publications/biennial_reports/2014-2016/2016-Biennial-Report-Complete.pdf.71AnthonyS.Broadman,“KnowYourEnemy:LocalTaxationandTaxAgreementsinIndianCountry.”SeattleUniversityAmericanIndianLawJournal.http://digitalcommons.law.seattleu.edu/ailj/vol0/iss1/1/.72KellyS.CromanandJonathanB.Taylor,“WhyBeggarThyIndianNeighbor?:TheCaseforTribalPrimacyinTaxationinIndianCountry.”NativeNationsInstitution,TheArizonaBoardofRegents,andtheHarvardProjectonAmericanIndianEconomicDevelopment.2016.http://nni.arizona.edu/application/files/8914/6254/9090/2016_Croman_why_beggar_thy_Indian_neighbor.pdf.73MattVolz,“Crow,Montanasettledisputeovertaxingcoalownedbytribe.”GreatFallsTribune.October21,2016.http://www.greatfallstribune.com/story/news/2016/10/21/crow-montana-settle-dispute-taxing-coal-owned-tribe/92512322/.74BradleyW.Joondeph,“TheMeaningofFairApportionmentandtheProhibitiononExtraterritorialStateTaxation.”FordhamLawReview.Vol.71,Iss.2,Art.3(2002).http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=3852&context=flr.Endnotesfor“OtherImpactstoTribesRelatedtoFederalPayrollTaxIssues,”page7:IJillCornfield,“UnderstandingTribalGovernmentRetirementPlans,”March25,2016.http://www.plansponsor.com/understanding-tribal-government-retirement-plans/?p=1


IIU.S.InternalRevenueService,“IRC457(b)DeferredCompensationPlans.”https://www.irs.gov/retirement-plans/irc-457b-deferred-compensation-plans.IIITeresaGhilarducci,“401(k)s:ABadDealforTaxpayers.”http://teresaghilarducci.org/blog/177-401ks-a-bad-deal-for-tax-payers.IVU.S.InternalRevenueService,“EmploymentTaxforIndianTribalGovernments.”https://www.irs.gov/pub/irs-pdf/p4268.pdf.VU.S.SenateBill1309,June7,2017.https://www.congress.gov/bill/115th-congress/senate-bill/1309/text;U.S.HouseResolution2860,June8,2017.https://www.congress.gov/bill/115th-congress/house-bill/2860/text?q=%7B%22search%22%3A%5B%22Tribal+Social+Security+Fairness+Act%22%5D%7D&r=1.

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