State Tax Revenue, Tribal Treaty Clash In High Court Fight
Tax Partner Nicole Elliott shared her insight with Law360 for their article on the U.S. Supreme Court's recent decision to hear a state-tribal treaty rights case.
On June 25, 2018, the high court granted certiorari to the Washington State Department of Licensing's petition claiming the Washington Supreme Court should not have exempted Cougar Den—a corporation formed under the laws of the Confederated Tribes and Bands of the Yakama Nation and owned by a tribe member—from millions in state fuel taxes. Washington has claimed that the Yakama Nation's 19th century treaty rights are curbing their state powers and costing them millions in tax revenues. Though the federal government ordinarily backs tribes on treaty issues, the Supreme Court's challenge to the state court's ruling is not surprising, considering it has been increasingly concerned with such rights creating losses for states.
Nevertheless, despite the mix of forces fueling the treaty clash, it is unlikely that the Supreme Court will find a way to revise the law in favor of Washington. "The Supreme Court must interpret the treaty language; considering the consequences in terms of cost should not drive the decision," according to Ms. Elliott.