4 tribes counter on city sales tax meeting

SHAWNEE, Okla. – City officials want to collect sales tax on purchases made by non-Natives at businesses owned by four area tribes and located on trust land after claiming that sales tax revenue have declined due to tribal economic development.

Shawnee officials had also set a Feb. 14 deadline to schedule a meeting within the following 10 days to discuss either establishing a monthly payment in lieu of collecting taxes or to have tribal businesses report to the city the same way that non-Native retail outlets report to the Oklahoma Tax Commission.

In response, leaders of the Absentee Shawnee Tribe, Citizen Potawatomi Nation, Kickapoo Tribe and Sac and Fox Nation sent a joint letter dated Feb. 13 stating concerns about the factuality of the city’s claim, legality of its offer and offering to meet a month later instead.

“At first glance, your letter appears to be based on a number of incorrect premises, both factual and legal, that will need to be reviewed more thoroughly to meet your concerns. Unfortunately, your proposal does not allow sufficient time for analysis, ” the tribes’ letter states.

The tribe’s letter proposed a meeting on March 24 at the Citizen Potawatomi Nation’s Cultural Heritage Center and asked the city provide written documentation by March 10 to support its claims that sales tax revenue are declining due to tribal economic development.

The tribes also want documentation of any tax incentives or rebates offered by the city or state over the past five years to non-Native businesses for development or preservation of economic activity within the city’s limits.

The 8.5 percent sales tax on purchases made in Shawnee includes a 3 percent tax assessed by the city.

City officials did not return phone calls seeking comment. However, in an interview with the Shawnee News-Star, City Manager Brian McDougal expressed his disappointment that the meeting would not be sooner as initially requested.

In its initial letter, the city threatened legal action if the tribes did not did not start collecting sales tax dollars generated by their businesses.

Citing disclosure laws, the Oklahoma Tax Commission declined to comment on whether it is investigating any of the tribes for non-compliance with state tax laws.

As per the U.S. Supreme Court’s 1991 ruling in Oklahoma Tax Commission v. Citizen Band of Potawatomi Indians, tribes do not have to remit state sales taxes on purchases made by tribal citizens on tribally-owned businesses located on reservations or trust land. Tribes are supposed to collect state sales tax on purchases made by non-citizens but the decision does not include provisions for state enforcement or for charging city sales tax.

The largest of the four tribes involved, Citizen Potawatomi Nation, has a grocery store, gift shop, casino and two convenience stores that would potentially be impacted if the tribe is forced to make payments to the city. One of the largest employers in Pottawatomie County, the tribe employs 2,200 people and has an estimated economic impact of more than $522 million.

The Absentee Shawnee Tribe’s complex has a Shawnee mailing address, as does the tribe’s gift shop and one of its casinos.

The Kickapoo Tribe is headquartered in McLoud, 15 miles to the northwest, but operates a casino and a convenience store within the Shawnee city limits.

Shawnee is also on the southern edge of the Sac and Fox Tribe’s jurisdiction and home to that tribe’s housing authority, one of its casinos, a multipurpose facility and two tribally-licensed smoke shops.