The Unending Onslaught on Tribal Sovereignty: State Income Taxation of Non-Member Indians

Abstract

State income taxation of non-member Indians is a legal issue that the United States Supreme Court is likely to address within the next five to ten years. This article provides a framework for resolution of this issue by carefully considering the history of taxation in Indian country and the cases that the United States Supreme Court has already decided. When it finally addresses the issue, the Court will be able to consider the usefulness of my framework.

In this article, I conclude that states do not have the power tax the incomes of non-member Indians who live and work on the reservations of other tribes. Because of inter-marriage and the availability of jobs with other tribes, the presence of non-member Native Americans is common on many reservations. Arizona, New Mexico, and Wisconsin currently assert that they have the power to tax non-member Indians precisely because they are non-members of the tribe where they live and work.

The courts of these states acknowledge that they cannot legally impose their income taxes on tribal members who live and work on their own reservations. But in the case of non-member Indians, these states assert and their courts agree that non-member Indians should be subject to the state income taxation precisely because they cannot vote in the tribal elections where they live. The state courts come to this conclusion by misinterpreting and erroneously applying United States Supreme Court cases. State courts have a long historical bias against Native Americans and against federally recognized Indian tribes. Therefore, it is not surprising that states have been quick to tax even when they lack the power, and their courts have been just as willing to validate the existence of an absent power.

Keywords: Indian law, Native American law, income taxation, state income taxation, taxation of Native Americans, tribal sovereignty