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Seminole Tribe of Florida


Few attorneys or tax professionals have heard of, let alone practice in the area of Native American Taxation. While earning my LL.M. at NYU, I was one of the few fortunate souls to have taken one of the two courses offered in the United States at the LL.M. level on this subject. It would be an understatement to say that this unexplored area of the law is extremely fascinating to me. Similar to many areas of state and local tax work, Native American Taxation is poorly developed, the rules are unclear, and the cases largely don't make any sense. While it is common for Florida attorneys like me live in a world with no clear answers, living in this gray area of the law is uncomfortable for most lawyers and professionals.

In early 2013, I wrote about two recent Florida decisions have caught my attention. Specifically, the two cases involved disputed by Taxpayers against the Florida Department of Revenue in Ark Hollywood LLC v. Department of Revenue and Ark Tampa LLC v. Department of Revenue. Both cases were filed in November of 2012 involved companies that leased restaurant space at the Hardrock Casinos in Hollywood and Tampa Florida, respectively.

Florida is in the minority in that it imposes a sales tax on commercial rent. In fact, Florida is the only state that imposes such a tax. But what if the commercial rent is on land that is on an Indian reservation? The Seminoles believe tribal land is immune from state tax, while the Department of Revenue believed "the rental tax is not a tax on Tribal land but rather it is a privilege tax imposed on non-Indian tenants for the use of commercial property." Specifically, the tax at issue on the alleged commercial rent is $110,306 for the Hollywood property and $100,735 for the Tampa location.

At the heart of these and most state taxation issues involving Native Americans, is the struggle of a state's power to tax transactions on tribal reservations versus the Indian Commerce Clause. Many lawyers and other tax professionals have heard of the Commerce Clause. The Commerce Clause is the provision in the United States Constitution that gives Congress the power to regulate interstate commerce. Specifically, the Commerce Clause states in Article I, section 8, that Congress shall have the power, "To regulate Commerce with foreign Nation, and among the several states." Most people are only taught or only remember that part of the Commerce Clause, but the Commerce Clause continues to read "and with the Indian Tribes." It is this provision that has led to enormous debate and controversy in the world of state taxation with the regards to the Native Americans.

In 1956, Congress conveyed land in Florida to the Seminole Tribe. The Act of 1956 declared that "all lands which have been acquired by the United States for the Seminole Tribe of Indians in the State of Florida under [the Act] are 'a reservation for the use and benefit' of the Seminole Tribe." Section 465 of the U.S. Code prevents a state from taxing the Seminole's land. The Southern District of Florida concluded that the tax was on the land itself, and, therefore, immune from Florida sales tax.

From a state and local tax perspective, the SALT practitioner can add this case to his bag of tricks. Among the other notable loses for states in attempting to tax tribal land is Mashantucket Pequot Tribe v. Ledyard, which is a 2012 Federal decision out of Connecticut, ruled that a state could not tax the land of a tribe under a traditional property tax regime. Other more well known cases such as McClenahan v. Arizona seem to state that a state income tax on an individual is unlawful because it is preempted by federal statute. The famous Warren Trading Post v. Arizona, also stands for the proposition that tax on transactions on the Reservation could not be taxed by a state.

It seemed in the motion for summary judgment that the court took a very practical approach and realized, the Florida sales tax in this case is explicitly, by definition, for tax on the privilege of using land. As such, the land itself has greater protections than an income or transaction tax on a Reservation. One can imagine the state will appeal this decision as it will have a significant economic effect from a state tax perspective.


About the author: Mr. Donnini is a multi-state sales and use tax attorney and an associate in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A., based in Fort Lauderdale, Florida. Mr. Donnini's primary practice is Florida sales tax, along multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of alcohol, cigarette & tobacco wholesale tax, Florida motor fuel tax, and Native American taxation. Mr. Donnini earned his LL.M. in Taxation at NYU.


Seminole Tribe of Florida v. State of Florida, Department of Revenue, Case No. 12-CV-62140-Civ-Scola (US So. Dist Ct, 9/5/14)(Order on Cross Motions for Summary Judgment)


FL controversy ALERT – COWBOYS (FL DOR) vs INDIANS, published March 1, 2013, By Jerry Donnini, Esq.