Abstract
This Article addresses whether Indian tribes should be subject to federal income taxation from both a tax policy and Indian policy perspective. Underlying the debate over whether the tribes should be taxed is the tribe’s unique relationship to the federal government. Congress’s power over the Indian tribes is plenary and there is no provision in the Constitution reserving certain powers to the tribes.
Because there are no constitutional constraints to prevent Congress from taxing Indian tribes, the decision of whether to tax the tribes primarily involves fundamental concerns of fairness and equity. A tribe simultaneously acts as a sovereign government and a business entity. Whether the current tax treatment of tribes is appropriate from a tax policy perspective depends on which of these roles one views as controlling. Viewing a tribe as a business entity and comparing it to other similar business entities that are subject to the federal income tax raises policy concerns (for example, the tax system’s impact on fair competition). No such concerns are present, however, when viewing a tribe as a government and comparing it to another subfederal government – i.e., a state – which can, free of federal taxation, operate proprietary business activities in addition to operating a government. Of course, even here we are still left with the issue of whether it is appropriate for subfederal governments in general (both states and tribes) to have tax exemptions while private businesses do not.
Recommended Citation
Mark J. Cowan,
Leaving Money on the Table(s): An Examination of Federal Income Tax Policy Towards Indian Tribes,
6 Fla. Tax Rev.
(2005).
Available at: https://scholarship.law.ufl.edu/ftr/vol6/iss1/5