Opinion ID: 2595374
Heading Depth: 1
Heading Rank: 4

Heading: United States Supreme Court Decision on Ad Valorem Taxation on Indian Lands

Text: Board of Comm'rs v. United States, 308 U.S. 343, 84 L. Ed. 313, 60 S. Ct. 285 (1939), involved taxes imposed by Jackson County, Kansas, upon land owned by a member of the Potawatomi Indian tribe. The land was patented under the GAA in 1887 and held in trust until 1918. At that time, the Secretary of the Interior canceled the trust patent and issued a fee simple patent, over the objection of the Indian owner. Jackson County began to collect tax upon the property. In 1927, Congress authorized the Secretary to cancel fee patents issued over objection of allottees. After the fee patent to that land was canceled in 1935, the Indian owner commenced proceedings to recover taxes collected by the county plus interest. The issue appealed was not whether a refund of the tax was due but rather whether the County was liable for refund of interest. In affirming the lower courts and holding that refund of interest was not due, the United States Supreme Court stated: Jackson County in all innocence acted in reliance on a fee patent given under the hand of the President of the United States. Even after Congress in 1927 authorized the Secretary of the Interior to cancel such a patent, it was not until 1935 that such cancellation was made. Here is a long, unexcused delay in the assertion of a right for which Jackson County should not be penalized. By virtue of the most authoritative semblance of legitimacy under national law, the land of [the Indian owner] and the lands of other Indians had become part of the economy of Jackson County. For eight years after Congress had directed attention to the problem, those specially entrusted with the intricacies of Indian law did not call Jackson County's action into question. Whatever may be her unfortunate duty to restore the taxes which she had every practical justification for collecting at the time, no claim of fairness calls upon her also to pay interest for the use of the money which she could not have known was not properly hers. (Emphasis added.) 308 U.S. at 352-53. The United States Supreme Court's statement implies that taxation of fee-patented Indian-owned land was proper until the Indian owner objected to the issuance of the fee simple patent and Congress authorized the Secretary to cancel the fee patents issued. Kaul I relied on County of Yakima v. Confederated Tribes and Bands of Yakima Nation, 502 U.S. 251, 116 L. Ed.2d 687, 112 S. Ct. 683 (1992), in determining that alienability of the land is not the sole test for the imposition of ad valorem taxes on property held by members of Indian tribes. First, Congressional intent to allow the imposition of ad valorem taxes upon the property must be found. Second, the taxing authority must examine the treaties and laws under which the tribal lands at issue were allotted to determine if the federal restrictions on alienation and taxation of tribal lands have been removed. 261 Kan. at 775. Six years after Yakima, the Supreme Court decided Cass County v. Leech Lake Band of Chippewa Indians, 524 U.S. 103, 141 L. Ed.2d 90, 118 S. Ct. 1904 (1998). In Leech Lake, Cass County had assessed ad valorem taxes on 21 parcels of reservation land that had been alienated under the Nelson Act and subsequently reacquired by the Leech Lake Band (the Band). Cass County assessed the taxes based on the Supreme Court's decision in Yakima that a county could assess ad valorem taxes on reservation land owned in fee by individual Indians or the tribe and originally made alienable when patented in fee simple under the GAA. 524 U.S. at 109. The Band then filed suit in the federal district court, seeking a declaratory judgment that the county could not tax the parcels. The district court granted summary judgment to Cass County, holding that all of the land that had been alienated under the Nelson Act was taxable. The Eighth Circuit affirmed the taxation only as to the parcels allotted to individual Indians, since these lands were allotted under the proviso in the Burke Act whose explicit mention of taxation manifested the necessary unmistakably clear intent, and reversed as to the taxation of the parcels sold to non-Indians under sections 5 and 6 of the GAA. The Court in Leech Lake noted that in Yakima, it had found that both the Burke Act proviso and section 5 of the GAA manifested an unmistakably clear intent to allow state and local taxation of allotted land. 524 U.S. at 112. Justice Thomas, writing for a unanimous court, held that state and local governments may impose ad valorem taxes on reservation land that was made alienable by the Nelson Act, sold to an Indian or a non-Indian, and subsequently repurchased by an Indian tribe. 524 U.S. at 114. In its analysis, the United States Supreme Court reviewed the source of the Indians' patent. The Court found that under the GAA of 1887, implemented for the Band through the Nelson Act of 1889, the Leech Lake reservation land was allotted to individual Indians and to non-Indians. In 1977, in response to the Band's ownership of less than 5 percent of the reservation land, the Band sought to re-establish its land base by repurchasing parcels of reservation land which had been allotted to individual Indians or sold to non-Indians. The United States Supreme Court found that in the case of the Leech Lake Reservation, Congress removed that land from federal protection and made it fully alienable when it provided for the public sale of reservation land to non-Indians in the Nelson Act. 524 U.S. at 113. The Court held that under the principles established in Yakima, the land is taxable. To hold otherwise, the Court stated, would attribute to Congress the odd intent of taxing parcels conveyed to Indians, and not taxing those conveyed to non-Indians. 524 U.S. at 113. The United States Supreme Court rejected the Band's contention that the land reassumed tax-exempt status when the Band reacquired the lands in fee. The Court explained that the subsequent repurchase of reservation land by a tribe does not manifest Congress' intent to reassume federal protection of that land and to oust state taxing authority, especially when Congress had explicitly relinquished such protection many years before. 524 U.S. at 114. The United States Supreme Court stated that state and local governments may not tax Indian reservation land unless Congress ceases its jurisdiction over the land. Jurisdiction ceases only when Congress makes its intent to authorize state and local taxation of Indian reservation land unmistakably clear. 524 U.S. at 112. Congress manifests the intent to authorize state and local taxation of Indian reservation land when it authorizes reservation lands to be allotted in fee to individual Indians, which makes the lands freely alienable and withdraws them from federal protection. 524 U.S. at 114.