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U.S. Supreme Court

Court rejects tribe's tax-exempt claim

By wire services
Published March 30, 2005

WASHINGTON - In a victory for the state of New York, the U.S. Supreme Court on Tuesday rejected the Oneida Indian Nation's bid to avoid paying taxes on property that had been part of original tribal land ceded to New York in 1805 but repurchased by the tribe in the 1990s.

The 8-1 decision has implications for other states - including Florida - where American Indians, enriched by casinos and other businesses, have reacquired ancestral property outside their reservations.

The Oneida Indian Nation argued before the Supreme Court on Jan. 11 that it should not have to pay property taxes on a gasoline station, convenience market and textile factory in the small Oneida County, N.Y., town of Sherrill, 35 miles east of Syracuse. The tribe argued that the newly acquired ancestral properties are now an extension of their reservation and cannot be taxed by localities without congressional authorization.

But in the decision written by Justice Ruth Bader Ginsburg, the court ruled the Oneida Indian Nation had relinquished its control of the land and cannot regain it by buying up property.

Doing so, the court said, "would yield a checkerboard of tribal and state jurisdictions" that would "significantly confound local governance" and "adversely affect landowners neighboring the tribal patches."

In the lone dissenting opinion, Justice John Paul Stevens said that the city of Sherrill is in what was once part of the 300,000-acre reservation created in 1788 for the Oneida and that local jurisdictions have no taxation authority "without express congressional consent."

Citing lower-court rulings in favor of the Oneida, Stevens wrote that "it is abundantly clear that all of the land owned by the tribe within the boundaries of its reservation qualifies as Indian country."

Mark Emery, spokesman for the Oneida Nation, issued a statement after the ruling saying, "Certainly the nation wishes the court had ruled differently."

Robert Batson, a professor of federal Indian law at Albany Law School, who worked on land-claim issues under former New York Gov. Mario Cuomo, said the decision implies all 17,000 acres of land outside the 32-acre Oneida reservation are taxable.

The vast real estate holdings of the Oneida tribe now stand to be taxed - including golf resorts, convenience stores, gasoline stations, mobile home parks a huge hotel and Turning Stone Casino - said New York Assembly member David Townsend, a Republican who represents Oneida County.

Sherrill sought $12,000 in unpaid taxes on 10 properties purchased by the Oneidas in 1997 and 1998.

When the Oneidas refused to pay, the city tried to evict the owners, and the Oneida Indian Nation sued in federal court.

Both the U.S. District Court and the 2nd U.S. Circuit Court of Appeals ruled in favor of the Oneida claim that their properties were tax-exempt.

In 2003, Sherrill and the state of New York appealed to the Supreme Court.

Todd Alhart, a spokesman for New York Gov. George Pataki, said the decision is being reviewed. Pataki argued in favor of Sherrill's position and was represented by the state attorney general's office.

The Oneida Indian Nation has about 1,000 members, about half of whom live in New York.

It owns the Turning Stone Casino, luxury lodges and the SavOn chain of gas stations and convenience markets.

[Last modified March 30, 2005, 01:15:26]