Former Oklahoma Supreme Court justice, arbitrator Daniel J. Boudreau recently ruled the Oklahoma Tax Commission may not unlawfully collect sales taxes from the Citizen Potawatomi Nation. “Federal law protecting tribal sovereignty interests preempts and invalidates the state’s sales tax on the nation’s sales in question,” Boudreau wrote.
The tribe requested arbitration after the OTC filed a complaint in May 2014, incorrectly claiming the tribe was required under the gaming compact to collect, report and pay state sales taxes on sales at FireLake Entertainment Center, FireLake Corner Store, FireLake Discount Foods, FireLake Express Grocery and Grand Casino Hotel and Resort in Shawnee. The tribe said the state was trying to use the gaming compact to unlawfully impose state sales taxes on tribal land.
Boudreau noted the tribe does not advertise that it does not collect state sales tax, because it imposes an equivalent tribal sales tax on transactions that occur on its tribal trust land. Boudreau also said the state of Oklahoma wanted to impose the tax on tribal transactions simply to gain additional revenue, and therefore “suffers no uncompensated economic burden” by not collecting sales tax.
Citizen Potawatomi Nation Tribal Chairman John Barrett said, “We are gratified to read the final decision by former Supreme Court Justice Boudreau. It confirms what we’ve said all along. The state government acted unlawfully in its attempt to tax tribal enterprises operating on Indian trust land. In order to support our government, provide services to Oklahoma citizens and create more economic development, we charge the same sales tax at our enterprises as the nontribal communities near them. We do this not only to provide needed revenue, but because it is the fair thing to do. We do not want an unfair advantage created from a tax exemption.”
Barrett added, “Our economic impact is now more than $550 million per year with gaming as a reinvestment revenue source. It has allowed us to create 2,400 jobs in our rural communities, which in Pottawatomie County equates to 70 percent of all new job creation in the last 10 years.”
