The Montana Budget and Policy Center this month released a report, which explores the intersection of taxation and tribal sovereignty, citizenship, and jurisdiction.
Preston Parish, State-Tribal Montana Budget and Policy Center analyst, said "understanding taxation authority is important as Montana looks to recover from COVID-19."
"Like any government, tribal governments need revenue to fund essential services and programs that keep communities healthy, educate children and develop workforces," he said in a statement to the Tribune.
The report outlines the importance of taxation authority.
"Honoring tribal taxation authority presents an opportunity to protect and enhance tribal government functions and services. What is good for Indian Country is good for Montana," the report states.
The report argues that power to tax is essential in a tribe's right to self-governance, as taxation is an important tool of control that helps provide government services.
"The same sovereignty that allowed tribal nations to enter into treaties with the United States is also what enables them to tax within the boundaries of their reservations," the report reads.
Tribal governments offer programs and services to their communities, including reservation infrastructure, natural resources and land management, order and safety, education, health and human services, housing, economic development and public transit.
Though tribal governments have the right to taxation, the report states, "non-tribal governments have challenged tribal taxing power."
Though tribal governments can tax citizens living on their reservations, most don't.
"One reason includes economic challenges, which are part of the legacy of settler colonialism," according to the report.
The state cannot tax tribes or citizens on their reservations, except if the state or county assesses property taxes on on-reservation fee land that tribes or their citizens own.
Tribal governments differ from other local governments in that tax revenue is not a significant source of revenue. Rather, according to the Montana Department of Commerce, federal funding, which part of a trust responsibility, provides the greatest source of revenue for tribal governments. Tribal governments also rely on businesses as a core source of revenue, according to the report.
Visit www.montanabudget.org to read the full report.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.