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U.S. Supreme Court won't touch Indian tax ruling
Tuesday, May 25, 2004
The U.S. Supreme Court on Monday refused to free the state of South Dakota from refunding gasoline taxes illegally paid by tribal members.
Without comment, the court rejected the state's appeal of a case involving a convenience store owner on the Pine Ridge Reservation. Loren "Bat" Pourier sought a refund of $940,000 in taxes
he paid since 1995.
The state refused, citing a federal law that several states have used to justify illegal taxes on Indian commerce. But the South Dakota Supreme Court said the Hayden-Cartwright Act of 1936 does not authorize the 22-cent per gallon tax on gasoline.
"A state has no power to tax tribes, Indian reservation lands, or tribal members residing on Indian reservations unless there has been a cession of jurisdiction or other federal statute permitting the tax," Justice Richard W. Sabers wrote in February 2003..
The battle, however, didn't end there. First, the court said
tribal members, and not Pourier, were owed the bulk of the refund
even though he never passed the tax onto tribal consumers.
Second, the court said tribal members were owed a refund regardless of when they purchased fuel. The state balked at this holding because it had been imposing the tax since the 1920s. State
officials claimed they would be forced to pay out millions.
So both Pourier and the state asked for a reconsideration of these key issues. After a rehearing last May, the high court reiterated in January that the state must refund money to tribal members
and not to Pourier.
But the court agreed with the state and imposed a time limit on refunds. In a 4-1 decision, the majority said Indian consumers must seek a refund within 15 months of a fuel purchase. Applications
[PDF] can be made through the state's Department of
The court, however, did allow refunds for the entire 1995-2004 period
at issue in the case. "[A]ny person who was enrolled member of the
Oglala Sioux Tribe and who paid the invalidly collected motor fuel
tax may timely seek a refund for the taxes paid as part of their
purchases made during the same period," wrote Justice John K. Konenkamp.
South Dakota attorney general Larry Long appealed the decision to
the U.S. Supreme Court. He was supported by the attorney
general from Idaho, another state which illegally pushed its
gasoline tax on Indian consumers.
Both states raised the Hayden-Cartwright Act in their appeal.
The law includes language authorizing state taxes on
"military and other reservations."
But several courts, including at least two federal courts, have ruled the law does not
authorize taxes on Indian reservations.
In a case involving Idaho tribes, the Idaho Supreme Court
struck down the state's 25-cent gasoline tax, prompting Republican lawmakers
to "legalize" it retroactively. A federal court later
blocked the state from collecting.
Like South Dakota, Idaho appealed to the U.S. Supreme Court
but was rejected.
In yet another case, the 10th Circuit Court of Appeals
blocked the state of Kansas from imposing a $1.25 million
gasoline tax on Ho-Chunk Inc., the economic development arm
of the Winnebago Tribe of Nebraska. The company deals
exclusively with three Kansas tribes and argues
that the state cannot interfere with inter-tribal commerce.
Ho-Chunk Inc. owns Indianz.Com and
South Dakota Supreme Court Decisions:
v. South Dakota (January 8, 2004) |
Pourier v. South Dakota (February 2003)
N.D. judge rules gas tax on Indians
Court limits refunds for illegal gas tax (01/09)
Oglala Sioux Tribe signs tax agreement with
Winnebago Tribe wins gasoline tax case
Judge blocks state from interfering with
Giago: State should
refund tax money first (08/06)
Editorial: Tribes should share tax with state
S.D. tribes urged by state to
charge gas tax (7/29)
asks court to limit tax refunds to Indians (05/30)
S.D. court takes on tribal gas tax
case again (05/05)
Supreme Court to rehear tribal gas tax case (04/04)
S.D. trying to determine tribal tax
ruling leaves both sides wanting more (3/31)
S.D. bill limits gas tax refunds for
tribal members (03/25)
S.D. high court sides with Indian
business owner (02/28)
State argues right to impose gas
tribe to pay gas tax (10/15)
Idaho tribes score victory with tax ruling (8/20)
Janklow sues over tribal
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