Oneida Indian Nation: Tax Exemptions & Economic Impact - Prof. John Yinger, Study notes of Introduction to Public Administration

Download Oneida Indian Nation: Tax Exemptions & Economic Impact - Prof. John Yinger and more Study notes Introduction to Public Administration in PDF only on Docsity! Tax Recommendations for the Oneida Indian Nation To: Professor John M. Yinger From: Yoon Kang, David Runyon State Local Government Finance Issues (1) Should Oneida Nation members and businesses pay state and local taxes (2) Should businesses operating on Oneida Nation Territory be exempt from sales tax? Recommendation We propose three recommendations to New York State and Oneida County regarding certain tax situations on the Oneida Indian Nation. First, we recommend that the Oneida Indian Nation should continue to be exempt from their personal federal, state, and local taxes. This tax exemption will continue to promote tribal economic development, self- sufficiency and strong tribal government. Secondly, we recommend that sales tax on consumer goods on the Native American territory be enforced on non-natives to protect the surrounding economy. We feel that all of these recommendations are fair and will have a positive benefit to both the Oneida Indians and the non-natives in the area. Tax Exemptions Tribal governments are not subject to state taxation on business activities conducted inside Indian-owned lands. Also courts have generally recognized that all land held in trust and located outside a reservation is exempt from state taxation. Under Law 508 US 124 Individual tribal members are not subject to state taxation for activities conducted inside Indian-owned lands.1 For the exemption to apply to income taxes, the individual Indian member must both live and work on the reservation. Either a residence outside Indian-owned land or work outside Indian-owned land is sufficient for state income taxation. We feel strongly that individual Oneida Nation residents should continue to be exempt from all federal, state, and local taxes. These reparations certainly do not make up for the way their people were treated in the early settlement days. These tax exemptions were 1 http://www.bloch.umkc.edu/natpp/statexecsummary.html The Tuning Stone Casino, owned and operated by the Oneida Indian Nation, is one of the premier resorts in New York State. The casino annually has over 4 million visitors to the area. In 1997 the revenue for Turning Stone Casino was approximately $100 million. The casino is not required to release any exact figures regarding their financial position. Although owning a casino does have some drawbacks, which will be discussed shortly, there are many large direct and indirect benefits of having the casino in the area. The Oneida tribe uses Turning Stone as a portal for revenue to be invested in other areas of the community. The immense (tax free) revenues generated from Turning Stone Resort and Casino are used to build a solid economic base for the nation by creating jobs for its Members and its neighbors, and providing services and programs for the Oneida Nation community. These profits are used for the betterment of the reservation and its people. These profits have been used in many sectors of their Indian Nation, such as: Education, Recreation, Public Services, Museums, Local Business and many others. Education − Scholarship and college funds − Tuition assistance programs − Grants for local schools. Recreation − Campgrounds − Youth and recreational Centers − Community centers Public Service − $7 million water and sewage system for the Town of Verona. − Gymnasiums − Comprehensive health clinic − Road repairs, sewer and water lines, and beautification programs. Local Business − SavOn gas and convenience stores (13) − Agriculture enterprise; grows culturally-significant crops on 1,000 acres of re-acquired land. − Four Directions Media Inc., publisher of Indian Country Today − Four Directions Entertainment; film, television and new media company. − Oneida Textile Designs, with a broad range of unique designs for sportswear and accessories. − Standing Stone Gaming, which manufactures, markets and distributes the Oneida Nation’s patented cashless gaming operating system Museums − Donated $10 million to Smithsonian Institution’s National Museum of the American Indian. − Shako:wi Cultural Center; Oneida history and culture Homestead & Necessities − Homeownership program; The Nation guarantees the Members’ mortgage to the bank. − Nation members receive $50,000 from the Nation toward the purchase of new home − A congregate meals and enrichment program for Nation Elders. − The Village of the White Pines, a residential community providing affordable housing 5 As with any issue, there are some negative effects of the casino as well. The main concern is that most of these casinos are built in depressed economic areas. These casinos are not like Atlantic City or Las Vegas, were people come from all over the country to visit. Most of the visitors of the casino are individuals who live mostly in the New York State and surround area. Many people argue that possible negative affects would be increases in crime rates and property crime. They argue that the people who can least afford to gamble do so. These people might spend more than just their disposable income on gambling which puts them into situations which might result in crime. But if you refer to Appendix B you will see that property crime rate in the three counties surrounding Turning Stone Casino (Onondaga, Madison, and Oneida) has decreased over the last 10 years. The most notable decrease was in 1993 which happens to be the same year that Turning Stone was established. Our explanation for this is that Turning Stone has created an immense amount of direct and indirect jobs in the area. So even if people are spending money at the casino, they now have better jobs and can afford to gamble. If you refer to Appendix C you can see the effects that Turning Stone has had on employment. Employment of Natives of the Oneida Nation had skyrocketed 5 http://72.14.203.104/search?q=cache:A03hck6Kbu4J:oneidanews.net/nation_in_progress/past/+oneida+trib e+turning+stone+college&hl=en&gl=us&ct=clnk&cd=1 in the year that Turning Stone was established (from 201 to 1880) 80% of these jobs are within the casino operations category. Consequently, in 1993 (the year Turning Stone was established), the unemployment rate in the three county area had dropped significantly. (Refer to Appendix D) The Oneida Nation Enterprises is the company that owns Turning Stone. They also own and operate local companies such as Car Care, Marion Manor Marina, Salmon Acres, SavOn Convenience Stores, and Snug Harbor Marina. As you can see in Appendix E and F, the Oneida Nation Enterprises is by far the fastest growing company in the three county regions. So although negative effects exist, we feel the multitude of positive effects on the community outweighs the negatives. The main vehicle for the Oneida Indian Nation’s expansion has been the implementation of the Turning Stone Casino. Establishing a Casino is a very capital intensive project, and the assistance of the tax exemptions played a huge part in the casinos creation as well its continuance. This has enabled the Oneida Nation to continue to buy up large tracts of land within the claim area to increase the breadth of its nation for future expansion. The Oneida Nation can offer homeowners very attractive purchase prices since they are exempt from property tax as well. For all these reasons we feel that the exemption from these taxes has and will continue to do what it was intended; to promote tribal economic development, self-sufficiency and strong tribal government. Sales Tax We feel that the government should not allow local businesses in the Oneida Nation to be exempt from sales tax. We feel this does not directly compensate the Native Americans for the reason implemented in the first place. This practice negatively impacts state treasuries, and at the same time, provides Native American retailers an insurmountable competitive advantage with regard to their non-Native American competitors. Sales tax was originally created to tax the “sale” and not the “purchase”. It was suppose to be the burden of the retailer to foot the bill in taxes for what was “sold.” The unintended result Therefore, the failure of the Oneida Nation to collect and remit New York excise taxes is causing severe financial hardship to New York for two reasons. First of all, New York is suffering considerably from the opportunity to collect sales taxes in the Oneida Nation from all the goods bought by the 4 million annual visitors to Turning Stone. Secondly, since the retailers in the Oneida Nation are selling goods at artificially low prices, non- Native American businesses are losing all of their customers and not enabling them to compete for business anymore. As a result, non-Native American competitors are being forced out of business with the outcome being that New York Sate’s income and business tax bases shrink which causes a net loss to New York State revenue. Conclusion We conclude that certain provisions to the tax code need to be made to partially include certain Native American entities listed above. We agree that reparations need to be paid to the Native Americans for our actions during colonization. The federal government treats the Native Americans as they do a “defeated nation” in wartime. The United States has the legal responsibility to protect and promote the welfare of the American Indian Nation. But our proposal is to eliminate unnecessary tax breaks that do not directly accomplish our goal of protecting and promoting the welfare of the Native Americans. Works Cited Tillotson, Tammy. Go Inside. Reparation for Native Americans: Another Trail of Tears. http://goinside.com/02/1/repairs.html Section III An Old Fashion Economic Revival. 2000 Oneida Indian Nation Annual Report http://www.oneida-nation.net/report3.html Oneida Indian Nation: A Nation in Progress http://72.14.203.104/search?q=cache:A03hck6Kbu4J:oneidanews.net/nation_in_p rogress/past/+oneida+tribe+turning+stone+college&hl=en&gl=us&ct=clnk&cd=1 Native Americans are Cashing-In with Gambling Casinos on the Reservation http://www.sims.berkeley.edu:8000/academics/courses/is190- 1/s96/abaurrea/assign5.htm#igra Cage, Beverly. The Nation. Indian Country, NY http://www.thenation.com/doc/20001127/gage/3 Garrison, Larry Native American Tax Policy Project. Executive Summary http://www.bloch.umkc.edu/natpp/statexecsummary.html US Census Bureau. Poverty Thresholds 2004 http://www.census.gov/hhes/www/poverty/threshld/thresh04.html Carlson, Peter. The Washington Post. Indian Poverty Feb 23, 1997; Page W06 http://www.emayzine.com/lectures/indian.htm Shulman, AllisonNACS Online. Native American Tax Exemption http://www.nacsonline.com/NR/exeres/0000615ekahlbkkqgboantrc/GenUseWith OneCallOut_Resource.asp?NRMODE=Published&NRORIGINALURL=%2fNA CS%2fGovernment%2fTax%2fIssueUpdate_NativeAmericanTaxExemption%2e htm&NRNODEGUID=%7b7E1A8977-078B-4977-B6D6- 2504B1B61E93%7d&NRQUERYTERMINATOR=1&cookie%5Ftest=1 Appendix A.) Property Rate American Indian Average of US 1990 31.60% 13.30% 2000 25.80% 12.40% B.)