In the case of the Oklahoma Tax Commission v. Citizen Band of the Potowatomie
Tribe in 1991, 111S. Ct 905, the Supreme Court has held that the states may
not tax the income that a tribe earns within its reservation without the
express consent of Congress. The only exception to this rule concerns
certain "pass on and collect" taxes where the tribe is required to collect
taxes and remit them to the state. In this case the ruling was that the
state can require a tribe to collect the state sales tax when the tribe sells
cigarettes to a non-Indian.
This was permitted because the product was not manufactured by the tribe
nor was it produced with tribal resources. Products that are produced and
sold within the tribe or from its own resources may not be taxed by the
state.
Although individuals may not file suit in Federal court to challenge the
validity of state taxes, tribes may challenge state tax laws. If the NY
tribes feel their complaint is valid, perhaps the protest should take place
in Washington D.C.
Sken:nen kenhak,
Sandy