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The Rise of Tribes and the Fall of Federal Indian Law
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N.D. judge rules gas tax on Indians illegal
Wednesday, January 28, 2004

As many as 7,000 tribal members who purchase fuel on reservations in North Dakota may be entitled to refunds for being forced to pay the state's gasoline tax.

The courts still have to sort out how much money may be owed to Indian consumers for the illegal tax. But Vance Gillette, the attorney handling the case, is urging tribal members to "save their receipts" in anticipation of a refund.

"We still have to go to court and brief the refund issue," said Gillette, a member of the Mandan, Hidatsa and Arikara Nation of North Dakota.

Gillette is representing four tribal members who contested the tax. They argued that federal law and 19th-century treaties signed by the Three Affiliated Tribes and the Turtle Mountain Chippewa Tribe shielded them from the state.

On January 13, a state judge agreed. Northwest District Judge Gary A. Holum issued an injunction permanently barring the state from collecting the tax.

"Because Congress has not instructed otherwise," the judge wrote in a 21-page opinion, "the court finds that North Dakota's motor fuels tax, as applied to Native American reservation residents who purchase fuel on reservation land, is illegal."

Based on statistics from the U.S. Census Bureau and the Bureau of Indian Affairs, Gillette says there are 18,000 American Indians and Alaska Natives who live on reservations in the state. Of those, he estimates that anywhere from 5,000 to 7,000 are actual fuel buyers.

At 21 cents per gallon, Gillette believes these buyers pay about $2 million in taxes every year. He says the real figure may be higher because Indians in rural areas purchase more fuel.

Lawyers for the state are contesting Holum's decision, and they filed a motion to reconsider, which is pending before the court. The lawyers also dispute Gillette's estimates of the refunds that may be owed.

But in other states, the courts have ruled in favor of tribal members in similar cases. Earlier this month, the South Dakota Supreme Court affirmed that Indian consumers have a right to refunds. The state and federal courts in Idaho barred the state from imposing a gasoline taxes on reservations as well.

In the North Dakota case, members of the Three Affiliated Tribes (Mandan, Hidatsa, Arikara), the Turtle Mountain Chippewa and the Spirit Lake Tribe are affected. Tribal members who buy fuel at the Sisseton-Wahpeton Tribe's casino on the North Dakota portion of its reservation are also impacted.

Gillette said members of the Standing Rock Sioux Tribe who buy fuel on the North Dakota portion of its reservation won't be included because the tribe has a tax agreement with North Dakota.

The plaintiffs who sued the state are Joan Mann and Ken Danks, Three Affiliated members who own business on the reservation, and Tracy Wilkie and Christa Monette, Turtle Mountain Chippewa tribal members. Holum dismissed all but Danks from the suit on procedural grounds.

Related Stories:
S.D. tribal members can apply for gas tax refunds (01/16)
S.D. Supreme Court limits refunds for illegal gas tax (01/09)
Idaho tribes score victory with tax ruling (08/20)

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