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State-Tribal Tax Compacts: Stories Told and Untold


Mark Cowan Boise State University
State-Tribal Tax Compacts: Stories Told and Untold


Behind every state-tribal tax compact, there is a story. Most of these stories remain untold. Compacts, which are agreements between sovereign governments, often help states and tribes settle or prevent disputes over overlapping tax jurisdiction. Yet much about them is unknown. Only the final, signed agreements are preserved—and even those can be hard to find. In discussing compacts, scholars often focus on broad issues of important national concern. Such work adds a lot of value, and helps inform federal, state, and tribal policymakers. But many questions remain. What are the ideal terms of a compact? What factors motivate state and tribal officials to enter into compact negotiations? How are the negotiations structured and what are some best practices? Have the compacts that have been in place for years been beneficial to the tribes and the states? How would a state or tribe seeking to negotiate a tax compact start the process? What resources are available to them? How have similar issues been addressed by other states and other tribes? What insights can state and tribal officials and their representatives who have successfully navigated the tax compact process provide? Knowing the answers to these questions, and the untold stories associated with them, would be instructive. This paper cannot answer these questions, given its limited scope and the dearth of available information. But this paper can get the process started. Specifically, this paper provides background information on the need for tax compacts in general; distills some initial lessons from a sampling of tax compacts across several states, tribes, and tax instruments; and suggests topics for further research. The conclusion is clear: more work needs to done in the area—work that has the potential to inform the compacting process to the benefit of tribes, states, and those seeking to do business in Indian Country.