Corporate Close-Up: MTC Renews Policy Statement on Tribal-State Tax Issues

The Multistate Tax Commission has voted to renew their policy statement regarding tax agreements between states and Native American tribes. The resolution to renew the policy was approved unanimously at the Commission's annual business meeting last week.

The policy statement notes that tribal enterprises have grown significantly and have become important parts of local economies for both Native and non-Native Americans. Because the tribes are sovereign nations, they hold authority to tax. Often the growth of tribal economies has resulted in disputes regarding which government has the authority to impose taxes in various kinds of income. These disputes may depend on a variety of factors, including location of the business and the nature of the business activity itself. If taken to court, these disputes can take a long time to reach resolution.

The Commission notes that these disputes have often been successfully resolved through negotiated tribal-state agreements. These agreements lay out clear, more coherent tax frameworks for who has the authority to impose taxes in certain situations, and have generally been successful in resolving tax related disputes.

The policy statement supports the implementation of these agreements as a more efficient way to resolve jurisdictional issues and an effective manner of maintaining good relations between the tribes and the states. The Commission originally released the policy statement in 2009, and has renewed its stance supporting tribal-state tax agreements and offering to work with leaders of both parties to foster expanded dialogues on the topic.

By: Alexander Dowd

Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: How do you think the MTC's endorsement of tribal-state agreements will impact taxpayers going forward?

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