The Ninth Circuit Court of Appeals in March affirmed an earlier federal court decision that counties can collect taxes from non-Indians who are leasing Indian trust lands.
The case derived from Riverside County in California, which sued to be able to tax non-Indians on the Agua Caliente Reservation.
Winning the case means about $30 million in annual revenue for the county. Money that the county will distribute to cities, public districts and its own general fund. Most of what the county collects it will use to fund school districts in Palm Springs. It also funds fire protection and emergency services.
That also means the tribe is not collecting the tax. It enacted its own tax, but refuses to tax its tenants twice.
The tribe has 90 days to appeal the 9th Circuit’s ruling to the U.S. Supreme Court, which may or may not grant the appeal. Records indicate that so far it has not done so.
The County’s tax is called a 1 percent possessory interest tax, and applies only to people who lease reservation land. The tribe argues the tax violates federal law, harms its sovereignty and reduces its tax revenue.
The tribe argued in court filings: “Riverside County uses the money collected on the Reservation to benefit people living in other cities and areas far away from where the taxes are collected,” adding “The Tribe’s desire is to keep tax money within our community to service the Coachella Valley.” The County successfully contested the tribe’s arguments.
The Agua Caliente Reservation is about 4,300 acres and the tribe has 20,000 leases on it.
