Even without agreements, states have a variety of mechanisms available to them to ensure these sales taxes are collected, including collecting taxes at the wholesale, rack, or terminal level. Dual taxation inhibits economic growth. As sovereign governments, tribes can, and sometimes do, tax revenues generated within reservation boundaries. However, states are also allowed in some instances to tax revenues generated on reservations. Tribes are forced in these instances to choose between reducing tribal tax revenues or discouraging economic growth by double-taxing businesses.
Reservations are among the poorest regions of the nation.
Tribes should not have to choose between providing basic social services to their members and encouraging economic development to help relieve high unemployment and poverty rates. Tribal revenues are used to provide important services in reservation communities. All tribal revenues go directly to provide governmental services for tribal members and for critical infrastructure development. The tax base for most tribes is extremely limited. Tribal members who live or work outside their tribe's reservation are already taxed directly by surrounding state governments and cannot pay tribal taxes.