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Northern Cheyenne forced to pay state taxes



One of the most popular misconceptions/stereotypes about American Indians is that we do not pay taxes, happy to be a burden upon the American taxpayer.  This is not true. Every American Indian who has a job in America, including those on reservations pays federal income taxes, social security and unemployment taxes. Those living off the reservation face the same tax obligations as other Americans.

What we are not compelled to do, if living on the Reservation, is pay state taxes. Under the United States Constitution and other federal law, states may not collect state taxes on reservations without the express consent of a tribal government. Tribes have sovereignty – that is the right to regulate taxation and other general affairs within their reservation communities, basic tenet in American Indian and Federal law.

Yet, states are interested in getting the tribes to agree to state taxation, in my opinion against the day when they will try to exert jurisdiction on reservations. Yet, the Northern Cheyenne Tribe has voluntarily caved in – allowing the State to collect taxes on gasoline and tobacco products on the Northern Cheyenne Reservation. This first started in the 1990’s under the administration of then President Geri Small.  The Tribe was then running broke, finding it difficult to generate the million plus per year to keep the fully paid Council and Administration going and to pay the roughly quarter of a million per year in professional legal fees.  

That is when the long standing tribal law firm, Ziontz, Chestnut, Pirtle etc. (self-serving in my personal opinion) suggested that the Tribe enter into a 10 year Memorandum of Understanding with the State of Montana, agreeing to impose state gasoline taxes at the Cheyenne Depot, a tribally owned convenience store in Lame Deer, the only gasoline vendor on the reservation. Many tribal members feel this put a big dent into tribal sovereignty, but the Tribal Council could not seem to see that, focusing on another source of “easy” money.

Under this arrangement, the Tribe charges an additional .37 cents per gallon for gasoline; the Cheyenne Depot collects that amount; sends it to the State each quarter; the State invests that money, making interest; charges an administration fee and then returns the balance to the Tribe. For the first several years, the Tribe repaid that to Tribal members as a per capita, averaging from $100-$110 every two years. The Northern Cheyenne Tribe has approximately 11,600 far flung tribal members with 4,500 living on the reservation, who are the ones who pay that tax. Yet, the “rebate” or per capita was paid to all enrolled members. I always disagreed with that, as do many other members. If we’ve got to do this, should it not be refunded to those who paid? As Michael Bearcomesout, a military headsman recently pointed out: “I buy at least $3,000 in gas each year, paying $1,110 in taxes, under this tribal government scheme. That is a considerable investment in my tribal council. And I am only one.”

A few years after that, the Tribal administration again found themselves short of funds to fund their gang.  Thus, they passed a resolution saying that the gas tax funds would no longer be used for per capita payments. Instead, that revenue now supports the tribal administration.

That still wasn’t enough. So, a few years ago, at the advice of the Chestnut legal counsel, the Northern Cheyenne Tribe entered into another MOU with the state, agreeing to also impose state taxes on tobacco products. The Tribe and the State conducted a public hearing about this matter, very lightly advertised (not including in A Cheyenne Voice newspaper). Three tribal members showed up, all testifying in opposition, including myself.  That public hearing, in my opinion was just a dog and pony show to comply with state requirements.  Shortly after, the Council approved the state tobacco tax – 78 cents for every pack of smokes or can of Cope we buy, generating additional significant funds for the “tribal fat cat” politicians.

This, from what former Senator Max Baucus called the poorest reservation in Montana and Lame Deer, the poorest community in the state. As a result, smokes are now cheaper in Colstrip and Wyoming, as often is gas. Yet, the poorest of the poor are hostage to the Cheyenne Depot, Lame Deer where state taxes are imposed. Many, such as my 81 year mother and her cousin, Carol Red Cherries can only buy gas at the Cheyenne Depot.

As a result, resident tribal members are gouged for roughly 2 million per year in state gasoline and tobacco taxes.  After state refund, the money drops into the “black tribal budget hole” used to support the expenses of the Tribal Council, Administration, travel etc. There is no public accounting to tribal members for tribal member paid tax payments.

So, don’t tell me that the Northern Cheyenne don’t pay taxes.  But, most of the tribal membership is not aware of this “shuffle and jive system”.

When the “pilgrims” settled America, the English King collected taxes from them, which were sucked up to support the English throne, royalty and expenses of their government, with no benefit to the American colonialists.  That was a primary cause of the American Revolution – i.e. taxation without representation.  They went to war over that, forming a new country and government based on “taxation with representation: i.e. the “right to know”.

The Northern Cheyenne have constitutional rights to demand a referendum on any Tribal Council action. We can no longer conduct a revolution, but we not in the same boat? As tax payers, we have a right to protest. Under a referendum vote, supposedly guaranteed by our constitution, we can overturn state taxation, which I believe would occur in a heartbeat if the tribal members were informed.

Mike Bearcomesout, retired BIA employee, military headsman, Tim Lame Woman, Elk Horn Scrapers Society and general district chairman (a position recognized in the tribal constitution), Leroy Pine, Principal Chief; Mark Elkshoulder and Hugh Clubfoot, highly regarded ceremonial men, think we should do this. I write this column on their request.

(Clara Caufield can be reached at


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