Law Article: Slot machine tax decision puts burden on tribes

Reversing a district court order that would have preempted the imposition of local taxes on personal property located on Indian reservations and utilized by an Indian tribe, the U.S. Court of Appeals for the 2nd Circuit has held that the Town of Ledyard, Conn., can tax slot machines owned by non-Indian gaming machine companies and leased by the Mashantucket Pequot Tribe. Mashantucket Pequot Tribe v. Town of Ledyard , 12-1727-cv (L).

The court held that neither the federal Indian Trader Statutes nor the Indian Gaming regulatory Act (IGRA) expressly bar the imposition of a local property tax imposed on the non-Indian owners of personal property located on an Indian reservation. It further held that federal law does not implicitly bar the tax — even when the property is used for tribal operations — because state and town interests in applying the tax outweigh the federal and tribal interests reflected in federal statutes. The Ledyard decision burdens tribes by significantly diminishing the strength of their claimed interests in tax preemption cases.