Nilles suggested tribes carefully consider non-Indian ownership and its effect on state taxation. (By Diane J. Schmidt)

NITA Conference Offers Strategies for Navigating Indian Tax Country

Diane J. Schmidt
10/4/11

As tribes have become increasingly sophisticated about collecting tax revenues, federal and state courts have become less friendly to them. Fortunately, there is one organization that meets annually to share knowledge, case law and strategies among tribes—the National Intertribal Tax Alliance (NITA).

Mary Mashunkashey, tax administrator for the Osage Nation Tax Commission, has been chairman of the alliance since its founding. She described the role of NITA while at its 13th Annual Tax Conference, held September 19 to 21 at the Tamaya Resort and Spa, a Hyatt Regency resort owned by the Santa Ana Pueblo, near Albuquerque.

“We started back in 1997 and put together an interim board and chose people from all over the country to represent nations,” Mashunkashey said. “We conference-call all year long because some of us are in D.C., Seattle, Arizona; I’m in Oklahoma. We’re throughout the U.S.

“At NITA, we’re all volunteers, there’s no membership. We put this annual conference on and get speakers. We always have a tribe host us, so that we’re being hosted by a nation. ...[W]e try always to communicate with nations all over the U.S. about litigation—anything that’s going on at the Supreme Court—and then we go back to the basics.

“The tribe that’s going to just start a tax commission, they can call me or our board members, we can find someone close to them. They can look at our tax code, they can see what we’ve done, so there’s no reason to start anew. If they’re going to start a new tax commission we teach them how.”


The NITA conference opened with a morning golf tournament, followed by two pre-conference workshops for tribes putting together new tax commissions. “We are teaching you how to put together a tax code, how to do a tax commission. From the basics to where we’re at today—litigation, legislation, specifics on how to maximize your tax issues, how to work with the states,” Mashunkashey said.

Susan M. Williams, Esq., based in Albuquerque, opened the conference on day two as the keynote speaker. In 1989 Williams successfully argued the Big Horn federal Indian reserved water rights case before the United States Supreme Court. She has also been a lead lobbyist in several successful Indian legislative efforts, such as those that treat Indian tribes as states under the Safe Drinking Water Act, the Clean Water Act, and the Indian Tribal Governmental Tax Status Act. During her talk she stressed the importance of a study now underway to collect the information that is available about states and tribes, that show what is being taxed.

A panel discussion followed on recent tax litigation. Frank Jozwiak, attorney with the Seattle law firm of Morisset, Schlosser, Jozwiak and Somerville, spoke on recent case law on Indian tax matters, with an emphasis on what he called the “law of unintentional consequences.” Stressing the unfavorable rulings that the Supreme Court has handed down on cases that tribes have brought, he said, “If they end up in the Supreme Court, we’re in big trouble. The Supreme Court is not leaning toward tribal rights.”

In a study he conducted, Jozwiak found that from 1986 to 2011, there have been fifty Indian cases heard, and of those, only seventeen ruled in favor of tribes. And since Chief Justice John Roberts came on the bench in 2005, Jozwiak said, there have been “zero cases favorable to tribal sovereignty.”

He stressed that cases brought for various issues have had the unintended result of weakening tribes. “Cigarette tax law is a minefield out there,” he noted. In another case about a 51 percent tribally-owned LLC he concluded, “It’s all about revenue. In dealing with non-Indians, make sure you have management and control.”


In the second panel discussion, Kathleen Nilles, NITA board member and partner with Holland and Knight in Washington D.C., spoke on strategies and issues in state taxation of Indian country transactions. With 20 years of experience advising Indian tribal governments on federal tax issues, Nilles has defended tribal governments in tax controversies with the IRS. She also co-authored Tribal Business Structure Handbook, published by the Department of the Interior. She stressed that too little attention is paid up front by tribal entities and affiliated business enterprises to their structure, and suggested that tribes carefully consider the implications of state taxation.

Other speakers included Alix Foster, tribal attorney for the Swinomish Tribe near Seattle, Washington. Foster discussed strategies in avoiding dual taxation with state retail sales and other taxes where tribes obtain revenue rulings from pertinent states through negotiated agreements, rather than by bringing lawsuits that may lack teeth.

September 20 afternoon’s breakout sessions included a presentation by Vincent Logan, Esq., president of The Nations Group Advisors, LLC, one of the few American Indian-owned and SEC-registered investment advisory firms, about how tribes can better invest their funds for the future. September 21 offered another full day of sessions on tax and IRS policy updates, and ended with a closing prayer.

As political winds have shifted, and states increasingly eye tribes’ tax revenues, these tax lawyers, accountants and financial advisors offered sage counsel for navigating the years ahead.

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