Keweenaw Bay fee land not taxable
BARAGA, Mich. – The state of Michigan cannot tax fee land owned by the tribe or individuals on the L’Anse Reservation, home to the Keweenaw Bay Indian Community.
The U.S. Supreme Court denied the Michigan State Tax Commission’s attempt to review a decision by the 6th Circuit Court of Appeals that denied the state the right to collect property taxes assessed on reservation property.
This final step in the legal process affirms the treaty rights and sovereignty of Keweenaw Bay Indian Community. Earlier the district court ruled against the state, which sent the issue to the court of appeals. The ultimate ruling is that no taxes can be collected on any land, and in this case fee land within the boundaries of the L’Anse Reservation. This Supreme Court denial to hear the case ends the legal battle over property taxation on the L’Anse Reservation.
“The Supreme Court’s decision confirms the community’s long-held position that the 1854 treaty [of La Pointe], as well as general principles of tribal sovereignty, absolutely prevents the state from imposing property taxes on our reservation lands, regardless of title by which they are held,” said Keweenaw Bay Community President
Keweenaw Bay tribal members reside on the L’Anse Indian Reservation in Michigan’s Upper Peninsula.
The tribe and state have exchanged legal arguments in court since the 1980s on property tax, starting in state court and finally moving on to federal court in 2003.
This case centered around the 1854 treaty with the Chippewa at La Pointe, which created the L’Anse and other reservations. The district court and a three-judge panel of the 6th Circuit Court of Appeals upheld the 1854 treaty that guaranteed no tribal member could be removed from the land; the courts further ruled that within that treaty, language precludes involuntary alienation of Indian-owned lands within the reservation by tax sales or otherwise. As the treaty is interpreted, the taxation of fee or any land, whether tribally or individually owned, on the reservation is prohibited. Trust land is automatically nontaxable, but this case dealt with fee land only.
“Our tribe is gratified and thankful that we can assure our future generations will be afforded the rights that our ancestors intended over 150 years ago,” LaFernier said.
The 1854 Treaty of La Pointe has been affirmed as a living, viable document that the ancestors were very diligent in writing to protect future generations. Article 11 of the treaty prevented the encroachment of federal statutes that allotted some of the land to the tribal members and the tribes, then opened the rest for settlement. There was no congressional statute enacted that made the lands either alienable or taxable.
Attorneys who represented the tribe said that the U.S. Supreme Court’s refusal to review the case was based on the fact that the case did not have nationwide implications.
“This was all about what the treaty provided and not subject to congressional action,” said Mary Streitz, attorney with the Dorsey and Whitney LLP law firm of Minneapolis.
“Whether there is another treaty out there that is still in effect, I would doubt it, but there might be,” she said. “This decision is about what this treaty provided.”
In this case, the Dawes, or General Allotment Act, and subsequently the Burke Act, do not apply. The Burke Act ended the allotment era and allowed for the taxation of land previously allotted, which caused some lands to be taken over by non-Indian settlers for payment of back taxes.
The 1854 Treaty at La Pointe did not fall victim to congressional statutes as did most other treaties. Article 11 of the treaty protected the taking of land.
Before tribal leaders start researching their treaties or try to take states to task over taxation of property that is in fee, the chances of this case setting a precedent and being used as case law in other cases is remote. Attorneys said the likely scenario is that the Supreme Court denied certiorari because the case was not a national issue.
For the past few decades, the tribe has paid taxes on tribal fee land and has agreed to pay the taxes assessed to tribal members for land individually owned. That practice will end.
The Keweenaw Bay Community pays the surrounding communities 2 percent of the net winning revenues from the casino. But as of now the tax payment, which was estimated to be in the ballpark of $200,000 per year, will cease to be paid.
La Fernier said the tribe will pay for essential services to the communities, as has always been the tribe’s practice. The surrounding communities have been supportive of the Keweenaw Bay Community in the fight against the state.
The surrounding communities may lose some revenues from this court decision. “I guess the communities will lose, it’s a consequence of the state fighting it,” Streitz said.
“The local governments were not unhappy with the arrangement that had been struck; they wished the state hadn’t gotten involved. They [the tribe and communities] worked out their differences,” Streitz said.