BILLINGS, Mont. – This has been the month tribal tax issues were squelched in the federal court system.
U.S. District Judge Jack Shanstrom joined the growing list of courts that negated rights of tribes to impose taxes on fee land and ruled against the Assiniboine and Sioux tribes’ tax on the Burlington Northern Santa Fe Railroad.
With this decision, the courts wiped out nearly $2 million in revenue for the tribes, said Mervyn Shields, director of the tribes’ tax department. The amount lost from BNSF was estimated at $1.3. Additional tax money came from the Northern Border Pipeline and together the tax income was $2.2 million of the $9.5 million tribal budget. The tribes have imposed the tax since 1988.
The BNSF filed a lawsuit against the tribes last February to ask that the tax be declared invalid along with an attempt to stop legal proceedings that were moving through tribal court.
Judge Shanstrom’s decision not only prevents the tribes from imposing the tax, but also enjoined the tribe from trying to impose the tax through tribal court. The court decision states that the tribes have no civil authority to levy, assess and collect tax from the railroad. He also said that federally granted rights of way should be treated as fee lands.
The decision will affect all of the programs of the tribe even though most of the revenue was filtered to the general fund, a percentage went to support tribal programs, Shields said.
Had the tribes and the railroad come to a consensual agreement over the tax issue, or if the activity of the railroad or any other non-member impacted political integrity, economic security or the health and welfare of the tribe the tax would be valid, but the judge found no such agreement nor conditions existed, the judge noted.
Tribal leaders met to discuss the issue with the intent of coming up with alternatives to replace the tax revenue. Shields said no decisions had been made, but the tribal leaders are looking at different ways to tax or charge right of way fees to companies that cross tribal lands.
