Five New Mexico tribes have gone to federal court to fight the state’s attempt to collect taxes on free play that wasn’t collected under the old tribal state gaming compact, and which isn’t collected under a recently signed new compact.
The state is attempting to retroactively collect $40 million. The Albuquerque Journal and Santa Fe New Mexican last week both reported that the Pueblo of Isleta, operator of the Isleta Resort Casino filed suit after the state sent it a bill for $10.3 million.
It was later joined by the Pueblo of Tesuque, operator of the Camel Rock Casino, the Pueblo of Sandia, operator of the Sandia Resort, the Pueblo of Santa Clara, operator of the Santa Claran Hotel Casino and Pueblo of Santa Ana, who runs Santa Ana Star Casino.
The lawsuit (Pueblo of Isleta et al v Martinez et al) names Governor Susana Martinez and the New Mexico Gaming Control board. It seeks to ask the court to rule that collecting taxes on free play credits is illegal.
The complaint says: “By unilaterally requiring that free-play credits be treated as revenues, the defendants are imposing an exaction on each Pueblo’s use of free-play that violates the per se rule of federal law that bars state taxation of an Indian tribe unless Congress has authorized such taxation in terms that are unmistakably clear and the Indian Gaming Regulatory Act, which provides that a state may not ‘impose any tax, fee, charge or other assessment upon an Indian tribe’ under a tribal-state compact.”
The states reportedly will cite a Department of the Interior opinion that charging a tax on free play credits violates federal law.
