In his response to the Town of Parker claiming the Colorado River Indian Tribes have the right to impose taxes on fee lands (i.e., privately held) within the reservation, CRIT Tribal Chairman Dennis Patch cited several court cases which said tribal authorities have the right to tax and regulate businesses within the boundaries of reservations. His letter was in response to a claim by the Town that local businesses could not charge the Tribal sales tax if they were within the Town limits and on fee land.
One case he did not cite was one where the U.S. Supreme Court specifically ruled that, except under certain circumstances, Tribal governments did not have authority to impose taxes on businesses on fee lands within reservations.
The case of Atkinson Trading Company v. Joe Shirley Jr. et al was decided in 2001. In a unanimous opinion, the U.S. Supreme Court ruled that Tribal authorities did not have the right to impose taxes on fee lands within the boundaries of a reservation.
In the Atkinson case, the property had been purchased in 1916 by Hubert Richardson from the U.S. Government. Called the Cameron Trading Post, the owners had built a hotel on the land. In 1934, the Navajo Nation Reservation was expanded to include this land.
“This did not alter the status of the property,” Chief Justice William Rhenquist said in his majority opinion in the Atkinson case. “It is, like millions of acres throughout the United States, non-Indian fee land within a tribal reservation.”
In 1992, the Navajo Nation sought to impose a hotel occupancy tax on the property. The owners sued, claiming the Navajo Nation had no authority to impose such on non-members on fee land within the reservation. The tribal courts and the U.S District and Appeals Courts sided with the Navajo Nation.
In this case, the U.S. Supreme Court ruled the Navajo Nation had no civil authority by treaty or statute to impose such a tax. They ruled the availability of tribal police, fire and medical services did not constitute civil authority, and the petitioner’s status as a license Indian trader did not constitute a consensual relationship. They further said the nature of the business was not shown to have a direct effect on the political integrity, economic security or health and welfare of the Navajo Nation.
The case came out of Montana v. U.S. That case began in 1973 when the Crow Tribe of Montana sought to prohibit non-members from fishing or hunting on their reservation, even on privately-owned land within the boundaries of the reservation. The State of Montana came to be involved as questions arose over who owned the Big Horn Riverbed and whether the Crow Tribe had any authority to regulate the actions of non-tribal members on fee land within the reservation.
The case eventually made it to the U.S. Supreme Court, where a decision was handed down March 24, 1981. In an opinion written by Associate Justice Potter Stewart, the Court held the Big Horn Riverbed was owned by the State of Montana. According to the U.S. Department of Justice website, the Court found no treaty or statutory right for tribes to regulate the behavior of non-members on fee lands within reservations. The Tribes could exercise authority if non-members had entered into a consensual relationship with the tribe or if the non-member’s “conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.”
This is known as the “Montana Test.”
“The question with which we are presented is whether this general rule applies to tribal attempts to tax nonmember activity occurring on non-Indian fee land,” Rehnquist said in the opening paragraph of his opinion in the Atkinson case. “We hold that it does and that neither of Montana `s exceptions obtains here.”
A major difference between the Town of Parker and the Atkinson case was the property in Atkinson was originally purchased from the U.S. Government and the reservation was eventually expanded to include it. The Town of Parker was created in 1908 when Congress deeded one square mile of the CRIT reservation to the Santa Fe Railroad. In the 1989 case, CRIT v. Town of Parker, the Federal courts ruled Congress never “disestablished” the Town from the reservation. The recently decided case of McGirt v. Oklahoma (2020) the U.S. Supreme Court ruled that, once a piece of land is set aside for a reservation, it remains part of that reservation unless Congress removes it from the reservation.
The Pioneer attempted to contact CRIT Attorney General Rebecca Loudbear for comment, but was told she would be out of the office until after Thanksgiving. E-mails sent to her staff had not been replied to as of press time.