“Indians Not Taxed”
The phrase "Indians not taxed" has roots in the U.S. Constitution, but its meaning and application have evolved significantly over time.
Here's where it appears and what it means:
Article I, Section 2, Clause 3: This is where the phrase originates. It states that "Representatives and direct Taxes shall be apportioned among the several States... according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons."
What it meant historically:
Exclusion from Apportionment: This clause was primarily about how to count the population for the purposes of determining representation in the House of Representatives and direct taxes. By excluding "Indians not taxed," it meant that Native Americans who were not considered citizens or part of the general tax-paying population were not counted towards a state's population for these purposes.
Sovereignty and Treaties: This exclusion reflected the historical understanding of Native American tribes as separate sovereign entities. They were not subject to U.S. taxation or governance in the same way as citizens. This was often formalized in treaties.
How it has changed:
Citizenship: In 1924, the Indian Citizenship Act granted citizenship to all Native Americans born within the territorial limits of the United States. This meant that Native Americans became subject to federal income taxes, just like other citizens.
Taxation Today: The tax situation for Native Americans today is complex. While they are generally subject to federal income tax, there are still some variations regarding state income tax, property tax, and sales tax, depending on tribal affiliation, location of income, and specific treaties or agreements.
Do Native Americans have to pay taxes today?
The answer is: it depends. Here's a breakdown:
Federal Income Tax: Generally, yes. Native Americans are subject to federal income tax on income earned both on and off tribal lands.
State Income Tax: This varies. Some states have agreements with tribes that exempt tribal members from state income tax on income earned within tribal lands.
Property Tax: Property taxes on tribal lands are complex. Generally, individually owned land within a reservation is subject to state and local property taxes. However, land held in trust by the federal government for the tribe is often exempt.
Sales Tax: Sales taxes also vary. Some states have agreements with tribes regarding sales tax on purchases made on tribal lands.
Key Factors:
Tribal Affiliation: Tax laws can vary depending on whether an individual is a member of a federally recognized tribe.
Location of Income: Where the income is earned (on or off tribal land) can affect tax liability.
Type of Tax: Different types of taxes (income, property, sales) have different rules.
Treaties and Agreements: Specific treaties and agreements between tribes and the government can influence tax obligations.
Important points to remember:
Evolution: The meaning of "Indians not taxed" in the Constitution has changed significantly due to legislation and evolving understandings of tribal sovereignty and citizenship.
No Blanket Exemption: It's crucial to understand that there is no longer a blanket tax exemption for Native Americans.
Sovereignty: Tribal sovereignty plays a significant role in tax matters. Tribes have the right to negotiate agreements and establish their own tax laws within their jurisdictions.
Economic Development: Tax incentives and exemptions can be used to promote economic development on tribal lands.
Complexity: Tax laws related to Native Americans remain complex and require careful consideration of individual circumstances and applicable laws.
It's important to consult with legal and tax professionals specializing in Native American law for accurate and up-to-date information on this topic.