Tribes told to pay pull-tab taxes

The Associated Press

WASHINGTON — The Supreme Court ruled Tuesday that Indian tribes must pay federal gambling taxes on pull-tab lottery cards and other tribal lottery games.

The decision will not change the way the Tulalip Tribes does business: The tribes already collect the tax, said John McCoy, the tribes’ government affairs director.

States are not required to pay federal excise taxes on wagers, and two Oklahoma tribes argued that Congress also intended to exempt them.

"The language of the statute is too strong to bend as the tribes would wish," Justice Stephen Breyer wrote for the court.

The case involves pull-tab lottery cards, which are sold to finance reservation activities.

The Chickasaw Nation and Choctaw Nation argued that the federal Indian Gaming Regulatory Act was unclear on whether lottery cards can be taxed.

Justice Sandra Day O’Connor, in a dissent joined by Justice David H. Souter, said the court should have relied on the long-established precedent requiring governments to interpret ambiguity in tax laws in the light most favorable to the tribes.

Exempting tribes from the taxes "preserves the nations’ sovereignty and avoids giving state gaming a competitive advantage that would interfere with the nations’ ability to raise revenue in this manner," O’Connor wrote.

Breyer said from the bench that part of the law was badly written, but "we do not think it means the Indian tribes don’t have to pay the taxes."

Justices Antonin Scalia and Clarence Thomas supported part of the ruling, which affirmed a decision by the 10th U.S. Circuit Court of Appeals in favor of the government.

The case is Chickasaw Nation v. U.S., 00-507.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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