The U.S. Court of Appeals for the Ninth Circuit issued an opinion in U.S. v. King Mountain Tobacco Co., affirming that tribal manufacturers of tobacco products on land held in trust by the United States are subject to the federal excise tax on manufactured tobacco products. The case began as an issue of delinquent excise taxes, which the tribal entity paid until 2009 when it fell into arrears. In the recently decided case, the tribal entity claimed an exemption to these taxes under the General Allotment Act of 1887, 4 Stat. 388, and the Treaty of the Yakamas of 1855, 12 Stat. 951.
The Ninth Circuit upheld the district court’s judgment that those exemptions do not extend to excise taxes (taxes on certain goods); the exemptions are limited to taxes on land or income directly derived from the land. In addition, King Mountain is not the allottee of the tribal land held in trust.
For the complete Ninth Circuit opinion in this case, click here: http://cdn.ca9.uscourts.gov/datastore/opinions/2018/08/13/14-36055.pdf