Piliero Mazza & Pargament, PLLC Vol.
7, Issue 1, January 2005
Addressing Tribal and Alaska Native Corporation Legal and Business Issues
The articles shown here are excerpts. If you would like to subscribe to the Tribal Advocate, please contact Susan Brock at (202) 857-1000 or at
A R T I C L E S
Survey Of State Taxation Of Tribal Businesses Part One: Taxation By Agreement
As promised in the last issue, the Tribal Advocate has begun its survey
of the power of U.S. states to tax tribally-owned businesses that are not incorporated
under state law. In doing so, one fact became abundantly clear: state taxation
of tribes is as varied as the individual tribes themselves. As we looked closer,
however, certain common characteristics began to surface. In particular, a number
of states have entered into tax agreements with tribes in order to create a
measure of consistency and certainty from an otherwise hazy combination of federal
statutes and case law delineating the meandering outer boundaries of tribal
Several years ago, one study placed the number of tribal-state tax agreements
at 200, covering a range of issues from sales and use tax to excise taxes on
cigarettes, tobacco, liquor and motor fuel. The agreements generally allow tribes
and states to determine how each of the respective governments will share the
burdens and benefits of taxation on reservations—not entirely unlike an
international tax treaty. A tribe may agree to levy a tax at the same level
as the state tax and retain all or a portion of the proceeds, or it may agree
to collect and remit state taxes on non-Indians. The tax agreement provides
opportunities for the state and the tribe to address the particular idiosyncrasies
of a state’s tax law and the specific facts and circumstances of successful
tribal businesses. As economies change and grow, the parties may amend their
agreements to address contemporary concerns.
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Gao Upholds Agency Evaluation Of Atl Joint Venture
The Comptroller General of the Government Accountability Office (GAO) upheld
an agency decision to assign a higher risk score to a joint venture on the basis
that the cooperation of the three team members could not be certain. In a sector
where teaming with small businesses is more important than ever, this decision
could affect HUBZone and Alaska Native- and tribally-owned businesses.
In May 2004, the Department of the Navy (Navy or agency) issued a best-value
RFP for construction and maintenance of a new elementary and high school in
Sigonella, Italy. A joint venture of three construction companies, collectively
referred to as ATL, included Todini Costruzioni Generali (Todini), A.I.A. Costruzioni
Generali (AIA), and Lotos S.r.l. (Lotos). The technical evaluation board ranked
ATL second overall, and the price evaluation board determined that ATL offered
the lowest reasonable price. However, the Source Selection Board (SSB) determined
that a competitor, Cooperative Muratori e Ceentisi di Ravenna (CMC) provided
the best value, due to its “excellent” ratings for engineering,
past performance, and experience (compared to “satisfactory” ratings
for ATL). Following award and debriefing, ATL protested to the GAO.
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Tribe Can Be Sued For Potential Violation Of State Law Rooted In Federal Constitutional
Recently, a California appeals court ruling posited a new element of the legal
relationship between the state and tribes. The decision, to allow the California
Fair Political Practice Commission (CFPPC) to proceed in a civil suit against
the Santa Rosa Indian Community, asserts that a tribe can be sued for potential
violations of state laws rooted in federal constitutional law. To the extent
that this case is echoed by other states, or in other areas of law, it could
signal that “states rights” may impact the Indian Country.
Between 1998 and 2000, the Santa Rosa Indian Community contributed several
hundred thousand dollars to California candidates and political committees.
Consequently, the tribe was obligated by California’s Political Reform
Act (the Act) to file various disclosure forms, like any other major contributor.
Like federal campaign finance laws, public disclosure of state campaign donations
is instrumental in insuring a minimum level of transparency and legitimacy.
While the tribe initially filed many required disclosure reports, it later filed
some disclosure forms late, and failed to report approximately $360,000 of donations
in 1998. Consequently, the CFPPC filed a civil suit in Sacramento Superior Court
to penalize the tribe for violating the Act.
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Flurry Of Regulations Blankets Washington High Winds Predicted For February
As the holidays approach, a storm of regulatory activity has appeared over
Washington, providing contractors with plenty of reading material as they warm
before the fireplace. Agencies all too familiar to small business contractors
– the Small Business Administration (SBA), Department of Defense (DOD),
and the Federal Acquisition Regulation Council (FAR Council) – have issued
final regulations to wrap up the year’s work, and proposed rulemaking
to set the tone for the new year. Key among them is SBA’s December 3,
2004, Advanced Notice of Proposed Rulemaking (ANPR), which solicits comments
on wholesale revision of the size standard system. (Comments are due by February
1, 2005.) Also new on the books are refinements to the DOD Mentor-Protégé
Program, a substantial extension of task order limits, and final rules on subcontracting.
Following withdrawal of the size standard revisions proposed in early 2004,
SBA has taken a new approach to updating the size standard system. Rather than
proposing another rule, SBA has listed several topics on which it would like
to hear comments. Chiefly, SBA wants to know what they can do to simplify size
standards. One suggestion is to institute one general set of size standards
and another set for federal contractors. Another suggestion would institute
a tiered system of size standards, in which the smallest contracts would be
reserved for the smallest of the small; likewise for the larger small businesses.
Responding to frustrations over having to count each individual as part-time,
temporary, or contract employee, SBA has asked for suggestions on implementing
a system for counting full-time equivalents. This would be a boon for most contractors,
especially if SBA determines that converting revenue-based size standards to
employment-based size standards is appropriate. Other topics in the ANPR include
changing the way employees are counted for employment-based size standards,
transitioning all revenue-based standards to employment based, and revising
size rules as applied to concerns financed by venture capital firms.
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THE SUPREME COURT
Before The Court
- City Of Sherrill, NY v.Oneida Indian Nation
Oral Arguments in the City of Sherrill, NY v. Oneida Indian Nation
will be heard January 11, 2005. The following questions will be presented:
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- Can alleged reservation land, not set aside or superintended by the federal
government, be considered part of Indian Country?
- Did the expulsion of the New York Oneidas from their lands result in the
legal disestablishment of their New York reservation?
- What is the legal disposition of such former reservation land? Is the land
part of Indian Country, or otherwise?