Tribes take issue with Town of Parker directive over business taxes

The Chairman of the Colorado River Indian Tribes (CRIT) has written a public letter to the Town of Parker over a recent directive telling businesses within Town limits that they do not need to pay taxes to the Tribes.

The letter, which says that the Tribes are “deeply concerned” about the Town’s “grave error”, cites various cases that amount to “long-standing legal authority” to tax businesses within the town.

“Not only is your directive based on the false premise that tribal taxes are ‘not applicable’ in the Town of Parker limits, the letter has unnecessarily sewn confusion regarding the Tribes’ jurisdiction, for which Town businesses ultimately bear liability,” Chairman Dennis Patch writes.

“Moreover, your letter insinuates that the Tribes do not have jurisdiction in the Town of Parker. This is incorrect. The Town of Parker is considered Indian Country. Colorado River Indian Tribes v. Town of Parker, 705 F.Supp. 473 (D. Ariz 1989). In other words, the fee lands within the Town of Parker have not been disestablished and therefore are Indian Country for purposes of determining jurisdiction over Indians and non-Indians.”

CRIT says the cases it cites, which includes a recent U.S. Supreme Court ruling regarding reservation boundaries, “put to rest any legitimate question regarding the extent of the Tribes’ regulatory jurisdiction.”

The letter ends with a demand that the Town “immediately take steps to clarify the Tribes’ sovereign taxing authority,” warning that the Town risks “ensnaring law-abiding businesses, upon whom both the Town and Tribes rely, in the Town’s own misinformed efforts to undermine the Tribes’ jurisdiction.”

This is the not the first dust-up between the Tribes and the Town this year. Earlier in the summer, the two local governments exchanged heated words publicly over whether the Tribes or the State of Arizona could impose lockdowns related to the COVID-19 pandemic within town limits.

The full text of Chairman Patch’s letter is below.

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November 2, 2020
Town of Parker
P.O. Box 610
Parker, AZ 85344
RE: Response to September 22, 2020 Letter
Dear Mayor Beaver and Town Council Members:

The Colorado River Indian Tribes (“Tribes”), a federally recognized sovereign Indian tribe, received your letter to Town of Parker Businesses dated September 22, 2020. The Tribes are deeply concerned by your directive to businesses in the Town of Parker not to pay lawful Tribal taxes, contrary to long-standing legal authority permitting tribes to regulate persons doing business in Indian Country, including through taxation. See, e.g., White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 138 (1980); Water Wheel Camp Recreational Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir. 2011).

The Town needs to review the foregoing cases and federal tax law as it relates to businesses operating within Reservations so that it may make informed decisions regarding tax policy. Your September 22 letter invites businesses to ignore and thwart the Tribes’ taxing authority. This is a grave error. Not only is your directive based on the false premise that tribal taxes are “not applicable” in the Town of Parker limits, the letter has unnecessarily sewn confusion regarding the Tribes’ jurisdiction, for which Town businesses ultimately bear liability. The letter also glosses over the reality that the Tribes’ taxes are very fact specific, and what businesses may have legal liability for a tax depends on a number of factors including the nature of the business’s services and where the transaction takes place.

Moreover, your letter insinuates that the Tribes do not have jurisdiction in the Town of Parker. This is incorrect. The Town of Parker is considered Indian Country. Colorado River Indian Tribes v. Town of Parker, 705 F.Supp. 473 (D. Ariz 1989). In other words, the fee lands within the Town of Parker have not been disestablished and therefore are Indian Country for purposes of determining jurisdiction over Indians and non-Indians. The recent U.S. Supreme Court decision regarding reservation boundaries only serves to confirm the ruling of Parker. McGirt v. Oklahoma, 140 S. Ct. 2452, 2468-69 (2020) (holding that “[o]nce a block of land is set aside for an Indian reservation and no matter what happens to the title of individual plots within the area, the entire block retains its reservation status until Congress explicitly indicates otherwise” and that extratextual sources do not overcome statutory terms (quoting Solem v. Bartlett, 465 U.S. 463, 470 (1984)) to find that Creek Nation jurisdiction remained over 19 million acres of land set aside for Muscogee Creek Nation, including a portion of Tulsa, Oklahoma); see also Nebraska v. Parker, 136 S. Ct. 1072, 1082 (2016) (in dispute over whether Tribe had jurisdiction to impose a beverage control ordinance, Court held that Congress did not intend to diminish Omaha Indian Reservation). These cases put to rest any legitimate question regarding the extent of the Tribes’ regulatory jurisdiction.

The Tribes demand that the Town immediately take steps to clarify the Tribes’ sovereign taxing authority. Otherwise, the Town risks ensnaring law-abiding businesses, upon whom both the Town and Tribes rely, in the Town’s own misinformed efforts to undermine the Tribes’ jurisdiction. We trust this letter resolves this matter.

Sincerely yours,
COLORADO RIVER INDIAN TRIBES
Dennis Patch
Chairman

cc: Rebecca Loudbear, Attorney General