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The vast majority of Indian people pay exactly the same taxes as
non-Indians. However, sovereign tribal governments are not subject to
taxation by the federal or state governments.
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Indians pay the same
taxes as non-Indians.
The vast majority of individual Indians pay
exactly the same taxes as everyone else, including federal and state
income taxes, social security taxes, unemployment insurance, real estate
and sales taxes, liquor and cigarette taxes, and gas and motor vehicle
taxes. The only exceptions are Indians who live and work on a
reservation, (some of them get rebates on sales taxes), and Indians who
live on trust lands who do not pay real estate taxes.
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Indian tribes do not
pay taxes to federal or state governments; sovereign governments do not
pay taxes to each other.
There
is a long established principal in American law that one sovereign
government may not tax another. The rationale for this principal
is obvious. If one government could tax another it could
conceivably tax it out of existence. Indian tribes are sovereign
governments so they can not be taxed by any other government.
Tribes are in a similar situation to states, which operate lotteries to
expend their revenue bases and provide for the needs of their citizens.
Indian tribes that operated gaming establishments and other enterprises
do so for the same purpose. The federal government would never tax a
state government based on it revenues and it should not attempt to tax
Indian tribal government on theirs.
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