Tribe Supports County Resolution Seeking Funds for Tax Relief in LCO vs. Evers Case
By Joe Morey
On June 15, 2023, the Sawyer County Board of Supervisors approved a resolution requesting additional funds from the Wisconsin Legislature to offset projected revenue losses for the county and local townships from a recent Federal Court decision that exempted tribal land from Wisconsin state property taxation.
In LCO v Evers, the 7th Circuit Court of Appeals found that parcels of land owned by tribal members that were within the original 1854 Treaty boundaries were exempt from state property taxation and that tribal members were not obligated to pay property taxes within the reservation boundaries. The case was determined in August of 2022.
The resolution approved by the County states that the court case is a state and federal matter, and the loss of revenue will impact the county and township operating budgets and thus they are seeking state assistance from the Wisconsin Legislature.
LCO Tribal Chairman Louis Taylor said the Tribe supports the County’s resolution if they include asking for funds to reimburse tribal members who were unfairly taxed.
“The resolution fails to include a request to return the funds collected by the county and township tax assessors against the tribal landowners who were forced to pay the taxes or face civil forfeiture as indicated under state law,” Taylor stated. “Nowhere in the resolution does it provide information on how much funding was actually collected versus the deficit the county and townships claim they now have.”
The taxation issue has been argued by the signatory tribes of the 1854 Treaty since the early 1920s. In the Evers case, the tribes argued that land parcels that were allotted to the tribe and to individual tribal members were exempt from state taxation. The State, county and townships argued that land bought by non-Indians removed from the parcels trust status and would be subject to state taxation.
The tribes and the federal government argued that state law was not applicable, and the parcels should be restored to tax exempt status when it is owned by a tribal member. The tribes offered records dating back as far as 1919 objecting to the intrusion of state authority on tribal land.
“I’m asking Sawyer County to do the right thing and ask for additional funds for those tribal citizens who were taxed,” Taylor stated.
The recent litigation was prompted by renewed efforts by the townships to assess property valuations on tribal land and issue a tax bill. Townships argued in court that they were directed by the Wisconsin Department of Revenue to collect the property tax and use them for their budgets.
In an effort to avoid litigation, the tribe and townships had discussions on the validity of such tax collection actions with the tribe objecting to the townships authority to collect, but no agreement could be reached as the Department of Revenue and certain townships insisted on collecting the property taxes.
In response, the tribes brought action against all parties in Federal Court to enjoin the townships and the counties from assessing valuation and taxes on parcels owned by the Tribal Members.
The 7th Circuit Court of Appeals ruled in favor of the tribes, finding that the provisions of the 1854 Treaty between the Ojibwe tribes in Wisconsin and the United States Government did allow for tribal land ownership and the land would remain, without state taxation authority, with the tribe and its’s members. The court went further and found that any collection of property taxes was illegal and that the township and counties were barred from collecting any property taxes on parcels that were part of the original 1854 treaty.
The tribes met with state, county and township officials to discuss whether an appeal was necessary to the United States Supreme Court. The townships and the counties declined to file any appeal and to accept the order from the Appellate Court. The parties agreed to cease further litigation on the matter.
After the litigation was complete, townships and county tax assessors agreed to not collect any future or back taxes on parcels within the tribe’s boundaries and the Tribe agreed to assist in identifying tribal landowners that would be exempt from state property taxes.
The LCO Tribal Governing Board initiated talks with the local townships, and with the county, regarding their efforts to reimburse the taxes collected by the County and townships from the parcels that were owned within the 1854 Treaty Boundary. However, no discussion on the reimbursement of the collected taxes for those tribal parcel owners has occurred. Townships, declining to meet with the TGB on any issues, have stated how they lack the budget resources for any such reimbursement. The Tribe has expressed their concerns with the Wisconsin Department of Revenue over the lack of effort by the townships and the county to compensate those tribal members who were forced to pay taxes or face monetary sanctions for not paying, including forfeiture of their property. In any other instance where taxes were improperly collected, the taxpayer would be made whole with a refund for the amount of taxes taken by the government. Such an event happens every year with the conclusion of the federal and state tax season where citizens receive refunds from the government for the overcollection of income taxes. Yet, no action seems forthcoming to correct the improper imposition and collection of taxes for tribal landowners. The Tribe is concerned that a precedent could be set where other property owners in the state will be denied their proper reimbursement from state taxing authorities.
“The Tribe strongly supports the efforts of Sawyer County Board of Supervisors in correcting the taxation issues impacting the citizens of Sawyer County. The Lac Courte Oreilles Tribal Governing Board encourages the County Board to coordinate with the local townships to provide relief for all its citizens,” stated LCO Attorney General James Schlender Jr. “The appellate court was clear that the State should not be taxing tribal members for their land.”