TRIBAL TAX REFORM PRINCIPLES DOCUMENT – GOVERNMENT FAIRNESS
As Congress considers comprehensive tax reform, we request the development and inclusion of
fair tribal tax reform measures that align current federal tax laws and overall tax policy with: (1)
the U.S. Constitution’s acknowledgment of Indian tribes as governments; (2) the United
States’ legal treaty and trust obligations to Indian tribes; and (3) the role that Indian tribes
and tribal government revenues play in serving tribal communities. With a few exceptions,
current federal tax laws either ignore Indian tribes or awkwardly fit tribes into tax policies that
don’t fully consider these factors.
The U.S. Constitution acknowledges Indian tribes as governments with a bilateral relationship
to the United States expressly recognized in the Indian Commerce Clause, and implicitly in the
Treaty and the Supremacy Clauses. Further, the Supremacy Clause of the Constitution
recognized treaties as the Supreme Law of the Land and ratified treaties already made.
Federal tax reform efforts should also take into account the treaties that the United States
entered into with Indian tribes. Tribes ceded hundreds of millions of homeland acreage to help
build this Nation. In return, the United States promised to provide for the health, education,
and welfare of Indian people as well as to respect tribal cultures and ways of life. Many of
these promises are now codified in federal laws, such as the Indian Self-Determination and
Educational Assistance Act, the Indian Health Care Improvement Act, and dozens of others.
These policies are an integral part of Indian Self-Determination which seeks to establish greater
tribal control over Indian affairs and help tribes attain greater economic self-sufficiency (See
e.g. the Indian Financing Act, 25 USC 1451 et seq). For more than four decades, federal Indian
policy has supported Self-Determination. Federal tax policy should be aligned with these
existing federal Indian affairs policies.
Federal tax policy should also reflect the unique role that tribal governments have in generating
reservation-based economic growth to deliver vital programs and services; many of which have
gone substantially unmet and underfunded for generations. While tribal governments carry out
responsibilities in their communities that may be similar in many respects to that of states and
local governments; tribal governments are not able to rely on a robust tax base for revenue.
Instead, tribal governments rely on revenue generated from economic development to meet
and supplement vital programs and services. This makes tribal governments vulnerable during
economic downturns. It also makes it clear that Congress must create reliable and effective
federal tax policy to firmly support tribal governance while protecting the ability of tribes to
generate and retain the full use of tribal revenue.
04/18/13
IOTI Tribal Tax Reform Principle Document
Just as important, tribal governments and their elected representatives have the added
responsibility of ensuring that tribal revenues are used to preserve tribal language, culture, and
ceremonies. Preservation and restoration of tribal culture remains a significant need in light of
the former federal policy of Indian Assimilation, which forbade the practice of Native
ceremonies and use of Native languages.
The bottom line is that effective tribal tax reform should be guided by these principles to
promote government fairness for Indian tribes. Fairness means creating tax policy that:
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incents capital to do business in Indian Country;
gives tribes full access to government financing tools;
respects elected leader decision-making with regard to determining the well-being of its
citizens, including advancing and protecting social, cultural and ceremonial practices;
advances the ability of tribes to build an economic base and create employment
opportunities;
promotes certainty of jurisdiction, certainty to the capital markets, and certainty in tax
policy to sustain economic growth and foster economic partnerships.