II

106TH CONGRESS

1ST SESSION S. 550

To provide for the collection of certain State taxes from an individual who

is not a member of an Indian tribe.

IN THE SENATE OF THE UNITED STATES

MARCH 4, 1999

Mr. GORTON introduced the following bill; which was read twice and referred

to the Committee on Indian Affairs

A BILL

To provide for the collection of certain State taxes from

an individual who is not a member of an Indian tribe.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘State Excise, Sales,

5 and Transaction Tax Enforcement Act of 1999’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) through a long line of decisions, the United

9 States Supreme Court has established that States

10 have the right to collect lawfully imposed non-
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1 discriminatory State excise, sales, and transaction

2 taxes on the purchase of a good or service from an

3 Indian tribe (including a tribal government or tribal

4 corporation) by a person who is not a member of

5 that Indian tribe;

6 (2) the collection of those State taxes has been

7 impeded by the assertion of tribal immunity by In8 dian tribes (including tribal governments and tribal

9 corporations) and members of Indian tribes as a de10 fense in Federal actions in Federal courts; and

11 (3) the failure of an Indian tribe (including a

12 tribal government or tribal corporation) or a member

13 of an Indian tribe to act as an agent of a State to

14 collect such a State tax—

15 (A) unlawfully deprives that State of es16 sential tax revenues needed for making im17 provements to infrastructure and ensuring the

18 health and welfare of all of the citizens of that

19 State; and

20 (B)(i) creates a disadvantage for law-abid21 ing businesses that are not associated with the

22 Indian tribe and that fulfill an obligation to act

23 as an agent of the State; and
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1 (ii) as a result of that disadvantage, some

2 of those businesses may be forced out of busi3 ness.

4 SEC. 3. COLLECTION OF STATE TAXES.

5 Section 1362 of title 28, United States Code, is

6 amended—

7 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

8 ‘‘The district courts’’; and

9 (2) by adding at the end the following:

10 ‘‘(b) COLLECTION OF QUALIFIED STATE TAXES BY

11 INDIAN TRIBES.—

12 ‘‘(1) DEFINITIONS.—In this subsection:

13 ‘‘(A) GOOD OR SERVICE.—The term ‘good

14 or service’ includes any tobacco product or

15 motor fuel (within the meaning of the Internal

16 Revenue Code of 1986).

17 ‘‘(B) INDIAN TRIBE.—The term ‘Indian

18 tribe’ means—

19 ‘‘(i) an Indian tribe or band referred

20 to in subsection (a); and

21 ‘‘(ii) any governing body or tribal cor22 poration of such a tribe or band.

23 ‘‘(C) QUALIFIED STATE TAX.—

24 ‘‘(i) IN GENERAL.—The term ‘quali25 fied State tax’ means any lawfully im-
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1 posed, nondiscriminatory excise, sales, or

2 transaction tax imposed by a State on a

3 purchase of a good or service from a tribal

4 retail enterprise by a person who is not a

5 member of the Indian tribe that is (or with

6 respect to which a member is) the owner

7 or operator of the tribal retail enterprise.

8 ‘‘(ii) EXCEPTIONS.—The term does

9 not include any State tax otherwise de10 scribed in clause (i) if—

11 ‘‘(I) as of the date of enactment

12 of the State Excise, Sales, and Trans13 action Tax Enforcement Act of 1999,

14 the tribal retail enterprise is exempted

15 under the law of that State from col16 lecting and remitting that tax because

17 the Indian tribe associated with that

18 tribal retail enterprise imposes and

19 collects an equivalent tax on such sale

20 in an amount equal to the tax that

21 would otherwise be imposed by the

22 State;

23 ‘‘(II) as of the date of enactment

24 of the State Excise, Sales, and Trans25 action Tax Enforcement Act of 1999,
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1 the State has waived the applicability

2 of that tax to the purchase of a good

3 or service from that tribal retail enter4 prise by a person who is not a mem5 ber of the Indian tribe that is (or with

6 respect to which a member is) the

7 owner or operator of the tribal retail

8 enterprise;

9 ‘‘(III) as of the date of enact10 ment of the State Excise, Sales, and

11 Transaction Tax Enforcement Act of

12 1999, the tax is the subject of an

13 agreement between a tribal retail en14 terprise and a State that exempts that

15 tribal retail enterprise from collecting

16 and remitting that tax; or

17 ‘‘(IV) the incidence of the tax

18 falls on an Indian tribe or member of

19 an Indian tribe.

20 ‘‘(D) TRIBAL IMMUNITY.—The term ‘tribal

21 immunity’ means the immunity of an Indian

22 tribe from jurisdiction of the Federal courts, ju23 dicial review of an action of that Indian tribe,

24 or any other remedy.
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1 ‘‘(E) TRIBAL RETAIL ENTERPRISE.—The

2 term ‘tribal retail enterprise’ includes any entity

3 that—

4 ‘‘(i) is owned or operated by an In5 dian tribe or member of an Indian tribe;

6 and

7 ‘‘(ii) engages in the business of the

8 wholesale or retail sales of a good or serv9 ice.

10 ‘‘(2) COLLECTION OF QUALIFIED STATE

11 TAXES.—The owner or operator of a tribal retail en12 terprise shall collect and remit applicable qualified

13 State taxes.

14 ‘‘(3) CONFLICT RESOLUTION.—

15 ‘‘(A) DECLARATORY JUDGMENTS.—A

16 State may bring an action for a declaratory

17 judgment under section 2201 in a district court

18 of appropriate jurisdiction concerning the appli19 cability or lawfulness of a qualified State tax.

20 ‘‘(B) ACTIONS.—A State may bring an ac21 tion against a tribal retail enterprise or the In22 dian tribe or member of an Indian tribe that

23 owns or operates the tribal retail enterprise in

24 a district court of appropriate jurisdiction to
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1 enforce the collection or remittance of a quali2 fied State tax under paragraph (2).

3 ‘‘(C) WAIVER OF TRIBAL IMMUNITY.—In

4 an action referred to in subparagraph (A) or

5 (B), to the extent necessary to obtain a judg6 ment in that action, the tribal immunity of the

7 Indian tribe is waived.’’.

8 SEC. 4. APPLICABILITY.

9 The amendments made by section 3 shall apply to

10 sales of goods or services referred to in section 1362(b)

11 of title 28, United States Code, as added by section 3,

12 that are made after the date of enactment of this Act.

Æ