One proposal went as far as prohibiting the Secretary of the Interior from taking additional lands into trust for a tribe until that tribe had entered into sales and excise tax agreements with surrounding state and local governments. Another proposal would have required the federal government to act as tax collector for states. The House of Representatives has consistently rejected these proposals, recognizing that states have remedies to collect these taxes. However, similar legislation may be introduced in the 107 th Congress again. We urge Congress to oppose these measures.
States have sufficient taxing authority already.
As a result of recent Supreme Court decisions, states have the authority to collect tax on sales to non-Indians made on reservation land, but are not required to do so. Many states have worked out voluntary agreements with tribes for the collection of these taxes, while other states have waived their claim to collect these taxes in deference to tribal sovereignty. More than 200 tribal-state compacts in 18 states provide for tax collection and revenue sharing. 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.