A federal appeals court this week rejected arguments that the Seminole Tribe of Florida should be exempt from state taxes when fueling up vehicles on nontribal lands.
The 11th U.S. Circuit Court of Appeals sided with the Florida Department of Revenue in the long-running dispute, which involves fuel that the Seminoles say is used to provide government services on tribal land.
The ruling, issued Monday, said the Department of Revenue and top officials are 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.
"An Indian tribe can sue a state and its departments in federal court only if Congress has validly abrogated the immunity of the state or if the state has waived its immunity, but neither of those conditions has occurred here,'' said the ruling, written by Judge William H. Pryor and joined by Judge Paul L. Friedman.
But Judge Adalberto Jordan dissented from part of the ruling, saying the tribe should be able to challenge the future collection of fuel taxes by state revenue officials. Such a challenge, which would not involve requiring a refund for past taxes, stems from arguments that the tribe is exempt from paying the state taxes because of the Indian Commerce Clause of the U.S. Constitution. That clause deals with Indian sovereignty.
Part of the complexity of the case is that the Department of Revenue collects the taxes from suppliers before fuel is sold to motorists. The taxes are ultimately passed along to consumers at retail gas pumps.
While Jordan agreed that the state was shielded legally from being required to issue refunds to the tribe, he said that shouldn't stop a challenge to future taxes based on the constitutional question.
"Were the tribe to prevail in its constitutional challenge -- a matter on which I do not express any views -- the district court would issue a declaratory judgment that the fuel tax could not be applied to future purchases of fuel by the tribe for use on tribal land and in the provision of essential governmental services,'' Jordan wrote. "The majority (of the three-judge panel) believes that such a judgment would be tantamount to an order requiring Florida to issue refunds. But it is difficult to understand, linguistically or otherwise, how asking to stop something that is going to continue indefinitely into the future can be legally characterized as a retrospective demand for payment of money already in the states treasury."
But the majority opinion took issue with Jordan's position.
"Any future change to the collection of fuel taxes in Florida is a matter of public policy to be debated by the Florida Legislature, perhaps at the urging of the tribe, but not a matter of law to be decided by a federal court in a lawsuit filed by the tribe,'' the opinion said.
In the lawsuit, the tribe contested $393,247 in fuel taxes it paid between June 7, 2009, and March 31, 2012, according to the ruling. A federal district judge dismissed the case, which was similar to an earlier unsuccessful challenge in state court of taxes the tribe paid in 2004, 2005 and part of 2006.
