Litigation

Poarch Creeks win injunction blocking county from imposing tax

Monday, July 27, 2015

The Wind Casino and Hotel in Atmore, Alabama. Photo from Facebook

A county tax official in Alabama lacks authority over the Poarch Band of Creek Indians, a federal judge ruled last week.

The Wind Creek Casino and Hotel is located on trust land in Atmore. Yet Escambia County Tax Assessor James H. Hildreth claims the tribe owes $22.3 million in taxes and penalties for the facility, according to a document submitted in federal court.

"Hildreth’s promised assessment of taxes on the tribe’s trust lands, like any assertion of state or local taxing jurisdiction or authority over the tribe’s trust property, violates federal law, infringes tribal sovereignty, and is subject to declaratory and injunctive relief from this court," the tribe said in its May 26 complaint.

Judge Callie V. S. Granade wholeheartedly agreed with that argument. She issued a preliminary injunction that bars Hildreth from trying to collect the tax in Indian Country.

"By imposing taxes on the tribal trust property, Hildreth would be exercising jurisdiction over the tribe and directly assaulting its sovereign immunity," Granade wrote in the July 22 decision.

The issuance of a preliminary injunction can be disputed before the 11th Circuit Court of Appeals. In May, a three-judge panel heard arguments in a similar case involving an attempt to impose taxes on a casino owned by the Seminole Tribe in neighboring Florida.

In December 2012, the Bureau of Indian Affairs agency issued a regulation that ensures Indian lands are not subject to state or local taxation. Other federal courts have confirmed that the confirms long-standing law and policy but it looks like it's a new issue for the 11th Circuit.

In a different case, the 11th Circuit heard arguments affecting the trust status of the Poarch Band's casinos. Judge W. Keith Watkins concluded that the facilities lie within Indian Country but Attorney General Luther Strange believes otherwise.

Hildreth, the county tax assessor, also refuses to concede the his lack of authority in Indian Country.

"The Poarch Band's claim that the so-called 'Trust Property' is beyond the jurisdiction of this office to assess for taxation has never been legally established," he wrote in a March 2014 letter that was submitted in court.

He made his claim even though the BIA confirmed the status of the tribe's lands in June 2012 letter.

Federal Register Notice:
Residential, Business, and Wind and Solar Resource Leases on Indian Land (December 5, 2012)