Seminole Tribe, Florida Feuding Over Gas Tax

At issue is whether Seminole vehicles filling up at gas stations that are off Seminole property but used on tribal lands are subject to Florida’s state fuel tax.

November 27, 2013

TALLAHASSEE – A federal appeals court is taking up a dispute between the Seminole Tribe of Florida and the State of Florida over the payment of state taxes on fuel used on tribal lands, the Sunshine State News reports.

Lower courts have backed the Florida Department of Revenue in the dispute, which involves Seminole vehicles filling up at gas stations that are off Seminole property but using fuel on tribal lands.

The 11th U.S. Circuit Court of Appeals is scheduled to hear arguments December 10, with the tribe seeking to overturn the dismissal of a case in a lower federal court.

The Seminole Tribe contends that federal law prohibits the state from taxing fuel that the tribe uses on its sovereign lands. The Department of Revenue maintains that fuel should be taxed where it is dispensed, not used.

"The decisive issue in this case is whether the tribe’s off-reservation purchases of motor fuel are subject to Florida’s motor fuel tax,'' the state's brief said. "The plain language of Florida’s motor fuel tax statute and the explicit jurisprudence of the United States Supreme Court provide that the tribe must pay state motor fuel tax when it places the fuel in the tanks of its vehicles off of its reservation and trust lands."

Attorneys for the tribe have argued that the tax is imposed on the “use” and not purchase of fuel. They also maintain that the Indian Commerce Clause, part of the U.S. Constitution, bars the state from taxing fuel the tribe uses on its reservation.

"The department contends, if the tribe's vehicle is physically located at an off-reservation fueling station when the fuel is placed into its fuel tank, the fuel is deemed to have been 'used' off-reservation and, therefore, the Indian Commerce Clause does not apply,'' a tribe brief says. "The essence of the department's argument is that a state may avoid the constitutional limitations on its authority to tax on-reservation activities by simply enacting a statute which deems an on-reservation activity to have occurred off-reservation."

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