Judge rejects Osage Nation's claim for state tax exemption
BY DAVID HARPER World Staff Writer
Saturday, January 24, 2009
A federal judge ruled Friday against the Osage Nation in a lawsuit over whether tribe members who live and work in Osage County should be exempt from state income taxes.
U.S. District Judge James Payne decided that exempting Osage tribal members "would have significant practical consequences not only for income taxation but potentially for civil, criminal and regulatory jurisdiction in Osage County."
The judge wrote that the state of Oklahoma has governed Osage County for more than 100 years, yet the tribe has "not sought to reestablish their claimed reservation or to challenge the state's taxation until recently."
The case was filed in 2001 in federal court in Tulsa. In December 2007, the 10th U.S. Circuit Court of Appeals in Denver ruled that the case could proceed against individual members of the Oklahoma Tax Commission.
The defendants did not contest the rights of Osage tribal members to earn income and reside on the limited, scattered parcels of trust land within the county to be free from state income taxation.
The Pawhuska-based Osage Nation argued in its lawsuit that the Osage Reservation was never formally disestablished by Congress and that all of Osage County should be considered Indian Country.
Payne noted in his order that the county is "predominately non-Indian and non-Osage."
The court cited 2000 U.S. Census statistics that showed that 20.7 percent of the county's 44,437 residents were American Indians. Only 5.4 percent identified themselves as Osage Indian.
Payne wrote that the Osage Nation was mounting "an unprecedented challenge" that "disregards established law."
The judge's order says the tribe was asking the court to declare that all 2,296 square miles of Osage County are a reservation.
But for more than 100 years, "Congress and the courts have repeatedly recognized there are no reservations in Oklahoma," he wrote.
Attorneys for the Osage Nation would not comment Friday on the opinion, and Chief Jim Gray could not be reached.
Douglas Allen, general counsel for the Oklahoma Tax Commission, said a contrary ruling would have introduced a "multilayered potential for problems," as Payne's opinion suggested.
The judge wrote that a ruling for the tribe on the issue would affect "the state's sovereign rights, the state's jurisdiction over its citizens and critical revenue across a broad piece of land in which Congress has previously recognized the state has a right to exert its dominion."
David Harper 581-8359
david.harper@tulsaworld.com
