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Pursuing certainty in taxation to protect the future of tribal communities

A conversation with Mohegan Tribe Lifetime Chief Lynn Malerba

September 28, 2021


Rory Taylor Project Manager, Community Development and Engagement

Article Highlights

  • Tribal taxes fund goods and services for communal benefit
  • State taxation on tribal lands began with growth of tribal enterprises
  • A lack of state and federal policy options creates disparity and uncertainty in tribal taxation
Pursuing certainty in taxation to protect the future of tribal communities

State taxation on tribal lands is a critical issue in Indian Country that limits tribes’ ability to provide public goods and services to their communities and engage in economic development. And yet the origins of the issue are not well-understood. For insight into the history of taxation on tribal lands, Center for Indian Country Development spoke with Lifetime Chief Mutáwi Mutáhash (Many Hearts) Marilynn “Lynn” Malerba of the Mohegan Tribe. Malerba is co-chair of the Dual Taxation Subcommittee for the federal Treasury Tribal Advisory Committee and actively works on taxation issues for the Mohegan Tribe and nationally in Indian Country. This interview has been condensed and edited for clarity.

Rory Taylor: When did state taxation on tribal lands begin? Was there a distinct moment?

Lynn Malerba: I think the period that state taxation on tribal economic development grew was when tribes decided that they wanted to create their own sources of revenue, whatever that may be. In particular, the Indian Gaming Regulatory Act [in 1988]. There was a lot of pressure on tribes to create [tax] compacts with the state and delineating some of that work and that effort.

That, probably, is the genesis of some, but tribes participate in many different segments of the economy. Some tribes have always participated in, say, logging or oil. … So as tribes have developed their economies, their relationships with states and how they’ve negotiated some of those issues came to the forefront.

For me, personally, I remember hearing a lot about taxation issues while attending some of our national meetings. … That there has been a focus on taxation for the last 30 years. Remember that tribes did not necessarily see themselves as business owners until recently, and part of that is the realization that the United States has never lived up to its trust and treaty obligations.

Tribes have decided to engage in commerce, and to engage in economic development as a means to provide for their people, and to nation-build, and to rebuild because we were so devastated by the policies dating back to colonial times, but also in the 1800s and 1900s.

Pursuing certainty to protect the future of tribal communities, key image, portrait of Lynn Malerba
Image courtesy of Lynn Malerba

What did the revenue landscape look like for tribes before the growth of tribal enterprises?

I think what’s happened is that now that tribes are participating in the economy, they have a stronger voice to exert their sovereign authority over their lands, and not necessarily over their people. That’s a very bilateral relationship, with tribal citizens exerting pressure on their government and their leaders also exerting pressure on their citizens. But tribes were very impoverished and therefore are continuing to nation-build.

My tribe, for instance, my mom was on tribal council for 30 years, long before federal recognition, and long before we had any economic development. They kept our tribal community going, and kept our tribal government going, by having us pay dues. They were unable to protect their lands—our tribal burial ground was taken by eminent domain and made into a state park. We’ve since repurchased that land from the state of Connecticut, which we’re very proud of.

I think that tribes really struggled to keep their governments going, but they did, and they held on. They held on with this belief that we’ll find a way to ensure that our tribal communities are vibrant, that we’ll continue to exist, and that we’ll honor our past, but we’re protecting the future of those next generations. I think that’s what’s different for tribes versus any other business. We’re only in business to achieve our goals. It’s a means to an end. It’s not about individual wealth but about communal good.

It seems like there’s a real connection between taxation issues and questions of tribal jurisdiction and territory. Can you talk about that?

As you think about jurisdiction, and you think about the experiences that tribes have, it’s very different. So, you have large land-based tribes, but then you have tribes that had to endure the checkerboard experience, and their reservations were broken up. It’s very difficult to have a cohesive jurisdictional authority when your reservation is so fragmented and divided.

For the Mohegan Tribe, in the 1800s we decided to abolish the reservation system for us. We did so because we were assigned overseers by the state of Connecticut who were supposed to manage our affairs for us, which of course was not to our benefit. … So there are many ways that tribes have experienced their ability to govern and their ability to have jurisdiction over their lands, and as we’ve developed various economic development projects, that, I think, is highlighted.

Is there a particular moment at which tribes begin to question state taxation on tribal lands?

I’m not sure there’s a particular time, but what I think happened, and this is just my conjecture, is that tribes had successful enterprises, and all of a sudden, the interest of local municipalities and states in understanding that there were revenues they weren’t sharing in or not seeing the benefit of became a little bit more evident. … It’s probably more state-dependent with what was happening with the tribal nations at that time. And some states are just better at negotiating with their tribal nations and understanding their tribal nations. Think about the 23 tribes in Wisconsin. They have a strong voice because there are so many tribes and so many tribal citizens.

What does it do for tribal nations to have a patchwork of solutions to some of these tribal-taxation questions?

I think it creates winners and losers among tribes, and I also think it creates a lot of uncertainty for tribes. [Tribes] are looking for certainty in taxation, and in monetary policy as well. We want the United States to uphold its trust and treaty responsibility to tribes, and part of the canon of [federal] Indian law says you should be interpreting any policy or law in a way that is most favorable to the tribe, and in a way that the tribe would have understood it when it was negotiated. We know that that has not happened.

Rory Taylor
Project Manager, Community Development and Engagement
Rory Taylor writes about issues and policies impacting economic development in Indian Country. Before joining the Bank, he was a Fulbright Scholar at Waipapa Taumata Rau (University of Auckland), where he researched comparative Indigenous governance.