Whether Alicia Stroble lives and works in Indian country could determine whether thousands of Native American Oklahomans must continue paying state income taxes — or, potentially, any state taxes at all. That could cost the state about $161 million per year.
As one might guess, that’s of concern to the state.
Stroble is a Muscogee Nation citizen who works for the tribe and lives on the reservation that was restored as a result of the U.S. Supreme Court’s ruling in the McGirt case. She filed for a refund of several years worth of state income taxes she’d paid because the U.S. Supreme Court also decided, a long time a go, that Native Americans who live in Indian Country and doing work for the tribe are exempt form state income taxes.
That decision, made in 1973, when the court held that the State Tax Commission of Arizona illegally collected income taxes from Rosalind McClanahan, a Navajo, who lived on the Navajo reservation and worked for the Navajo Nation.
When Stroble sued the Oklahoma Tax Commission over, apparently, the very same issue, an administrative law judge ruled that she was right. The Tax Commission didn’t care for the ruling and reversed the decision, prompting Stoble to appeal to the Oklahoma Supreme Court, which heard oral arguments yesterday.
Oklahoma tax regulations say the state can’t collect the tax from people who hold
tribal citizenship, earned the income from work for their tribe and reside within the Indian country of their tribe, including formal reservations. There is no dispute that Stroble meets the first two criteria.
The federal criminal law defines Indian country as inclusive of all land within the boundaries of a reservation. But Oklahoma contends that definition only applies to criminal law and that the taxation issue is limited formal reservations, land held in trust by the U.S. government.
However the justices rule, the matter will likely be appealed to the U.S. Supreme Court, which has been narrowly split on questions of tribal and state sovereignty interests.
The only statewide news entity dedicated solely to investigative journalism, Oklahoma Watch distributes content through media partnerships with about 100 print and broadcast entities statewide.
Oklahoma Watch is a nonprofit news organization that produces in-depth and investigative journalism on important public-policy issues facing the state. Ted Streuli is the Executive Director.
Get Local News!
