OKLAHOMA CITY — The Oklahoma Tax Commission ruled Wednesday that tribal citizens are still responsible for paying individual state income taxes.
The case came about after the 2020 U.S. Supreme Court decision in McGirt v. Oklahoma and more than 9,000 taxpayers claiming exemption from state taxation due to the tribal income exclusion from August 2020 to Sept. 20, 2022. The state says 642 of those who disagreed with the Tax Commission's handling of the claimed exemption filed protests.
"However, the McGirt decision was limited to whether the defendant’s crimes were committed within Indian Country, as defined by 18 U.S.C. § 1151, in order to determine whether the state’s criminal jurisdiction was preempted by federal law, specifically, the Major Crimes Act (“MCA”). Id. at 2459. The Court focused on whether the land where the crimes were committed qualified as a reservation under 18 U.S.C. § 1151(a) for this purpose. Id. The Court ultimately held that, “For MCA purposes, land reserved for the Creek Nation since the 19th century remains ‘Indian country.’” Id. at 2456. As a result, the Court determined the federal government had exclusive jurisdiction to prosecute the defendant since the crimes were committed within Indian Country. Id. at 2478."
Since the McGirt decision, the follow-up case Oklahoma v. Castro-Huerta limited the scope of the original decision to scale back tribal jurisdiction. The Tax Commission ruled that McGirt cannot be used as the sole reason for tax exemption.
“I am pleased to learn that today the Tax Commission released a decision reaffirming that every Oklahoma citizen is required to pay their fair share," Oklahoma Gov. Kevin Stitt said in a statement on Wednesday.
"This is a ruling in favor of certainty, fairness, and equality for all Oklahomans. We all drive on the same roads, send our kids to the same public schools and benefit from the same state services, so it is only right that every citizen of the state of Oklahoma, regardless of race or heritage, should contribute their fair share.”
The state said it projected a loss of $75 million in revenue each year were to expand the McGirt decision.
2 News Oklahoma has reached out to local tribal leaders and will add those responses to this story when they're provided.
Muscogee Nation provided the following statement:
"It is not surprising that a commission appointed by the governor ignored 50 years of established law and rendered a decision aligned with the Governor’s misguided political campaign against tribal nations.
Tribal sovereignty benefits all Oklahomans. Tribal nations contribute billions to the state’s economy.
These issues are a long way from being over and settled. We look forward to challenging any threat to our inherent sovereignty every step of the way."
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