TALLAHASSEE, Fla. – The U.S. Supreme Court on Monday refused to take up a dispute about whether the Seminole Tribe of Florida should pay taxes on fuel it buys off tribal lands, handing a victory to the state in a long-running legal battle.
Justices did not explain their decision for declining to hear the case. The move let stand a ruling last year by the 11th U.S. Circuit Court of Appeals, which rejected arguments that the tribe should be exempt from state sales taxes when buying fuel that ultimately would be used to provide services on tribal lands.
The appeals court said, at least in part, the Department of Revenue and top officials were shielded by sovereign immunity from the claims. In doing so, the appeals court rejected arguments that the tribe was entitled to refunds for fuel purchased in the past.
In asking the Supreme Court to take up the case, attorneys for the tribe argued that federal laws bar states from enforcing many tax laws on Indian tribes. They focused, in part, on the way Florida collects fuel taxes, which involves the Department of Revenue collecting taxes from suppliers before fuel is sold to motorists. The taxes are ultimately passed along to consumers at retail gas pumps.
The tribe's attorneys contended that the appeals court's ruling, if "left uncorrected … will create strong incentives for states to reconfigure their tax schemes to introduce pre-collection from third parties whenever they believe a tax may not comply with federal laws or the Constitution. The decision therefore unjustly diminishes tribes' ability to protect their sovereignty and their constitutional rights."
In another document filed in the Supreme Court, the tribe's attorneys wrote, "This case concerns the power of federal courts to hear an Indian tribe's challenge to the constitutionality of a state tax. The decision below (in the appeals court) effectively ceded control of that power to Florida's Legislature."
But attorneys for the state said in court documents that Florida law imposes the fuel tax at the time of "use" -- and that "use" is defined as when fuel is put into a vehicle. That conflicts, the attorneys wrote, with the tribe's argument that it should be exempt from taxes on fuel purchased off tribal lands but then used on the reservation.
"(The) taxable event takes place off reservation,'' the state's attorneys wrote. "The tax is on the 'use' of motor fuel, and the law expressly defines 'use' as 'the placing of motor or diesel fuel into any receptacle on a motor vehicle from which fuel is supplied for the propulsion thereof.' No party disputes that 'the placing of' fuel at issue in this case takes place off reservation. The tax is therefore permissible."