Pillsbury Winthrop Shaw Pittman

Federal rule and Ninth Circuit opinion create huge opportunities on Indian land

By Matthew F Burke and Blaine I Green

In a set of comprehensive regulations affecting non-agricultural leasing on Indian land, the Department of the Interior, Bureau of Indian Affairs (BIA), made sweeping changes and largely exempted property taxes on permanent improvements, possessory interest taxes on leasehold interests held by non-tribal members and other state and local taxes on activities conducted by non-members on leased Indian land. In addition, a recent Ninth Circuit Court of Appeals decision affirmed that the taxes on permanent improvements were never lawful. Taxpayers in California that lease tribal land should immediately consider filing suits for refund and assessment appeals after receiving their tax bills.

In some densely populated portions of California, many types of business operate on leased Indian land, including hotels, resorts, golf courses, casinos and shopping centres. In cities such as Palm Springs, single-family homes, apartment buildings and condominium complexes are on leased Indian land. Under the jurisdiction of the Palm Springs Agency of the Department of the Interior, BIA, there are 1,175 commercial leases, 7,671 residential subleases and 11,118 time shares on Indian land. All of these properties may now be exempt from property taxes, and many of the taxes paid in the past several years may be available in refund suits.

Congress has expressly granted the BIA authority to approve leases on Indian land. In 2012, the BIA promulgated a new set of regulations covering non-agricultural surface leasing, which became effective on 4 January 2013…

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