- Associated Press - Wednesday, February 26, 2014

OKLAHOMA CITY (AP) - City of Shawnee officials and leaders of several local Native American tribes will meet next month in an effort to resolve a dispute over sales taxes.

Shawnee Mayor Wes Mainord said in a letter to tribal leaders earlier this month that the tribes must start collecting and paying 3 percent tax on sales from tribal enterprises to nontribal members. But the leader of one of the tribes says his tribe is exempted from that by federal law. The meeting between Shawnee city officials and tribal leaders is scheduled for March 24.

In the letter to the Absentee-Shawnee Tribe, the Citizen Potawatomi Nation, the Kickapoo Tribe of Oklahoma and the Sac and Fox Nation, Mainord said the city must take steps to secure its tax revenues for sales within the city limits.

“I write to propose the City reach agreements with the Tribal Nations for your collections and payments to the City of the City sales tax of 3% on sales by tribal enterprises to non-members and non-Indians (“non-members”), to avoid the City’s having to proceed to enforce payment of the full 8.5% Oklahoma state sales tax,” Mainord wrote.

The mayor cites Supreme Court cases to support his assertion and proposal, and said that the burden falls to the non-Indian customer, not the tribal nation or tribal enterprise. Though Mainord wrote in the letter that sales tax in the city of 30,000 has declined significantly in recent years, Shawnee City Manager Brian McDougal said in a phone interview that the sales tax has been “soft,” with less than 3 percent growth on average over the past decade.

Citizen Potawatomi Nation Chairman John “Rocky” Barrett said federal law exempts the tribe from collecting and remitting the sales tax. Only Congress can regulate commerce with Indian tribes.

“Municipal law isn’t applied to us, and that’s by federal law,” he said.

The tribe, Barrett said, does collect sales tax at its FireLake Discount Foods store as a way to level the playing field with other local grocery stores. “It’s (the money) used for education and public services. Our government services are financed by our tax collection and our business profits go into expanding our businesses,” he said.

Absentee-Shawnee Gov. Edwina Butler-Wolfe said she could not comment on the issue ahead of the meeting while a message for Sac and Fox Nation Principal Chief George Thurman was not returned. A number for Kickapoo Tribe Chairman Gilbert Salazar could not be located.

Businesses collect sales tax and remit it to the Oklahoma Tax Commission, which then remits it to cities, counties and the state. But there is no way for the commission to know whether a tribal member or a non-tribal member paid the sales tax, said Paula Ross, agency spokeswoman.

And the commission can’t audit the tribes because it does not have jurisdiction, she added.

The majority of the 39 tribes in Oklahoma have permits to collect sales tax, Ross said.

A tribe may have a payment-in-lieu-of-taxes agreement with a municipality.


Follow Kristi Eaton on Twitter at https://twitter.com/kristieaton.

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