Oklahoma Supreme Court soon to rule on tribal tax exemption case

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OKLAHOMA CITY (KFOR) – The oral arguments of the Strobel V. Oklahoma Tax Commission case wrapped up Wednesday, which means it is now up to the Oklahoma Supreme Court to decide if tribal members can get an exemption on their state income tax.

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“Laws surrounding taxation of tribal income earned by tribal citizens who both reside and earn an income on the reservation have been settled for decades,” said Muskogee Creek Nation Chief David Hill.

Alicia Stroble said that she was made to pay state income tax even though she worked and lived on Muscogee land as a citizen of the Muscogee Nation. Under the 2020 ruling of McGirt, the U.S. Supreme Court recognized that. However, the Tax Commission does not recognize it as a formal reservation for tax exemption purposes.

The basics of the case come down to whether a Muscogee Nation citizen working and living on her native land should or should not have to pay state income tax.

The Oklahoma Tax Commission is arguing she should and said that the state could be losing out on $75 million a year if everyone whom the law applied didn’t have to pay the state income tax.

State officials have expressed fear that if the court sides with Strobles in this case, then thousands of tribal citizens would file for exemptions.

The Tax Commission was asked by a judge Wednesday why they didn’t rule on this after the McGirt case and the attorney responded, “The Tax Commission view was that our interpretation was the simply better interpretation of the regulation.”

“I don’t think your tax bill should be dictated by your race or background,” responded Governor Kevin Stitt after Wednesday’s courtroom closed on the case. Stitt has been outspoken about how much he disagrees with Stroble and feels that the courtroom should not side with the tribe.

“That doesn’t help Oklahoma citizens, that doesn’t help tribal nation citizens,” said Chief Hill.

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“It should be concerning, it should concern every citizen of Oklahoma,” said Chief Hill.

Stroble put in an exemption initially for 2017, 2018 and 2019, but the three-person tax commission denied it in 2022.

“If the governor were in front of me I would say that it is time for Oklahoma to return to cooperation between the state and the nations,” said Riyaz Kanji of Kanji Katzen, an attorney representing Stroble. “Unfortunately what I think happened was that after McGirt, the governor and some others were very upset by that decision and reacted in a way as to sever or try to cut that cooperation.”

No decision was made Wednesday and one might not be made for months, maybe longer, but Stroble and others left the courtroom feeling positive about the case.

“Governmental leaders understand that cooperation is very important and that there are shared interests and that all governments have an interest in guarding against threats to health, safety, and welfare,” said Kanji. “I honestly think that if we can get back to cooperating and compacting shared governance, it would greatly benefit everyone.”

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