Anatomy of a State/Tribal Tax Dispute: Legal Formalism, Shifting Incidence, Potatoes, and the Idaho Motor Fuel Tax

The law regarding state taxation in Indian country is one of the last bastions of legal formalism in tax law jurisprudence. The ability of a state to tax in Indian country turns on the legal incidence of the tax: in general, a tax on the tribe or tribal members is not allowed; a tax on nonmembers do...

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Bibliographic Details
Published in:The ATA journal of legal tax research 2010-01, Vol.8 (1), p.1-17
Main Author: Cowan, Mark J.
Format: Article
Language:English
Subjects:
Casinos
Court decisions
Disputes
Economic development
Federal government
Fuel taxes
Gasoline taxes
Hotel occupancy taxes
Income taxes
Jurisprudence
Native North Americans
Sovereignty
State court decisions
State taxes
Tax controversies
Tax legislation
Tax revenues
Taxation
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Summary:The law regarding state taxation in Indian country is one of the last bastions of legal formalism in tax law jurisprudence. The ability of a state to tax in Indian country turns on the legal incidence of the tax: in general, a tax on the tribe or tribal members is not allowed; a tax on nonmembers doing business with the tribes or tribal members is allowed. In a world where legal formalism governs and there is no overarching mechanism for reconciling the competing interests of state and tribal governments, state/tribal tax disputes can quickly become contentious. A recent battle between the state of Idaho and the tribes within its borders over fuel tax revenue exemplifies the truculence of state/tribal tax disputes, but also shows that amicable resolution is possible when the courts take small steps away from legal formalism. This article provides an overview of the tax landscape in Indian country and then analyzes the dispute over the Idaho motor fuel tax and what it reveals about resolving state/tribal tax disputes.
ISSN:1543-866X
1543-866X
DOI:10.2308/jltr.2010.8.1.1