Oneida Nation Tax Case
Author: admin | Filed under: Land into Trust, Payroll taxes, Taxation of Trust LandVerona, NY — When the U.S. Supreme Court ruled in 2005 that the Oneida Indian Nation had to pay property taxes, much of Madison and Oneida counties rejoiced.
A federal appeals court on Tuesday, however, stripped the counties of the power to actually collect those taxes.
A panel of the 2nd Circuit Court of Appeals said that, while the tribe might owe taxes, it can’t be taken to court because it’s sovereign. That means the nation can ignore tax bills without the fear of facing court proceedings as other delinquent landowners might.
“The (Oneida nation) is immune from suit under the long-standing doctrine of tribal sovereign immunity,” wrote Judge Robert Sack. “The remedy of foreclosure is therefore not available to the counties.”
Sack’s two colleagues on the panel, Jose Cabranes and Peter Hall, recognized the seeming contradiction.
“This rule of decision defies common sense,” they wrote in a concurring decision. “But absent action by our highest Court, or by Congress, it is the law. In the last twenty years, the Supreme Court has twice held that, although states may have a right to demand compliance with state laws by Indian tribes, they lack the legal means to enforce that right.”
For his part, Sack resorted to a nursery rhyme to explain the predicament of the counties to enforce a law they have no real power to enforce:
“Mother, may I go out to swim?
Yes, my darling daughter
Hang your clothes on a hickory limb
And don’t go near the water.”
Joe Singer, a Harvard Law School professor and expert on federal Indian law, said he understands why people might view the 2nd Circuit decision as contradictory, but he said judges were following the law of the land as laid out by the Supreme Court.
“I think it’s literally four times in the past 15 years that the Supreme Court has repeated that tribes have sovereign immunity,” Singer said. “The Supreme Court has been very vehement in making tribal sovereignty part of the law.”
Five years ago, it seemed to residents of Sherrill that the Supreme Court had finally forced the Oneidas to pay up.
“This is an exciting day in the history of Sherrill,” City Manager David Barker said the day of the ruling, March 29, 2005. “Our concern all along has been the unknown. And now we have some finality.”
The Sherrill case was finally settled when the Oneidas agreed to pay taxes for five years. That agreement expires this fall.
As the 2nd Circuit decision shows, however, there is little in the way of finality. Sack suggested the counties could ask Congress to intervene; Cabranes and Hall urged the Supreme Court to revisit the cases the judges said they were bound to follow.
David Vickers, president of Upstate Citizens for Equality, a citizens group that has opposed Oneida and Cayuga Indian land claims, said he hopes the counties will appeal to the Supreme Court.
“I think this decision is a fairly likely decision for review at the Supreme Court level,” Vickers said. “I would not be at all surprised if the (Chief Justice John) Roberts court says, ‘We need to take this and decide on it once and for all.’”
The Oneida nation owns more than 17,000 acres in the two counties. In 2008, the federal Department of Interior agreed to take about 13,000 acres into trust, where the land would become free from state and local laws and taxes. That decision is being held up in court cases.
If that land is put into trust, Tuesday’s decision would apply to the remaining 4,000 acres of land, which includes nine SavOn gas stations and convenience stores.
Oneida nation spokesman Mark Emery issued an e-mail statement saying the nation was pleased with Tuesday’s ruling.
“Now that the court has resolved the issue once and for all, it is time to move forward and put the disputes behind us,” Emery wrote.
The counties can ask that the entire 2nd Circuit review the decision. If that fails, the last resort would be an appeal to the Supreme Court.
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