This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case concerns whether the state of New Mexico can tax the income of a Native American who is an enrolled member of one tribe but earns income while living and working on another tribe's reservation. The Defendant, an enrolled member of the Rosebud Sioux Tribe, worked as the Chief Judge of the Jicarilla Apache Tribal Court in 1989 and resided on the Jicarilla Reservation. The Defendant deducted this income from their state personal income tax return, but the New Mexico Taxation and Revenue Department later adjusted the return and demanded repayment of $796, asserting the deduction was not permissible (paras 2-3).
Procedural History
- New Mexico Taxation and Revenue Department, Hearing Officer: Ruled in favor of the Defendants, allowing the income deduction (para 2).
Parties' Submissions
- Plaintiff-Appellant (New Mexico Taxation and Revenue Department): Argued that the income earned by the Defendant on a reservation of which they are not a member is taxable under state law, citing recent United States Supreme Court decisions that clarify the scope of state taxation authority over Native Americans (paras 1, 4-5).
- Defendants-Appellees: Contended that the income earned on reservation land, regardless of tribal affiliation, is not subject to state taxation, relying on the precedent set in Fox v. Bureau of Revenue and McClanahan v. Arizona State Tax Commission (paras 2-3).
Legal Issues
- Can the state of New Mexico tax the income of a Native American who earns income while living and working on a reservation of which they are not a member?
Disposition
- The Court of Appeals of New Mexico reversed the decision of the Department's hearing officer, holding that the income earned by Native Americans on reservations of which they are not tribal members is taxable by the state (paras 5-6).
Reasons
Per Pickard J. (Bivins and Flores JJ. concurring):
The Court overruled its prior decision in Fox v. Bureau of Revenue, which had held that the state could not tax any Native American's income earned while living and working on any reservation land, regardless of tribal affiliation. The Court reasoned that subsequent United States Supreme Court decisions, including Duro v. Reina, Oklahoma Tax Comm'n v. Sac & Fox Nation, and Washington v. Confederated Tribes, clarified that the rationale in McClanahan does not extend to nonmembers of a tribe, even if they are Native Americans. These decisions establish that states may tax the income of Native Americans who are not members of the tribe on whose reservation they reside and work, absent express congressional authorization to the contrary. The Court concluded that the income in question was taxable under state law (paras 4-5).