FTB Rescinds ‘Tribal Source Practice’


April 4, 2013


The California Franchise Tax Board (FTB) has initiated a practice of collecting state income tax from tribal members who are living and working on their reservation. The FTB’s rational for this practice is that tribal member income is not exempt from state income tax unless it is derived from a “tribal source.” The FTB has not defined “tribal source” or provided legal authority for its practice, which is contrary to federal case law.

The FTB practice was brought to the attention of the Governor’s office and through its efforts the FTB has reconsidered its practice and is prepared to discontinue it and rescind assessments that were issued over the last four years. We anticipate official notice confirming FTB’s position next week. However, because the FTB is only going back four tax years, tribal members who have been wrongful assessed income tax in 2008 will only have until April 15, 2013 to file an appeal with the FTB.

Attached are the necessary appeal forms that tribal members may submit to preserve their claims.
CILS is asking tribal leaders and others to please post and circulate this alert so that tribal members may protect their rights for a refund of improperly collected taxes on their income earned on their reservation. If tribal members need assistance please direct them to the CILS office within their area.

Thank you and CILS will continue to monitor this matter and inform the tribes of future developments.

Click here for a .pdf version of this Alert.

Amicus Brief Thank You

Adoptive Couple v. Baby Girl Amicus Brief available for viewing

On March 28, 2013 California Indian Legal Services (CILS) and Maureen Geary with Maier, Pfeffer, Kim & Geary, filed an amicus brief (“friend of the court brief”) on behalf of 63 California tribes and 5 Indian/tribal organizations with the United States Supreme Court in the Adoptive Couple v. Baby Girl et. seq. The brief can viewed here and sets forth the issues in the case.

CILS would like to thank all of the Tribes and tribal/Indian organizations that supported the amicus brief and tribal attorneys that contributed their time and resources in preparing the brief. The outcome of Adoptive Couple v. Baby Girl et. seq. will have far reaching impact on every tribe in United States and the show of solidarity among California tribes will hopefully send a strong message to the Supreme Court of the importance of the Indian Child Welfare Act.

CILS remains committed to ensuring California tribes are heard on legal issues that impact your tribal communities. Thank you again for all your support.

Baby Girl case before Supreme Court

Adoptive Couple vs Baby Girl set for Argument before Supreme Court

Thank you to all who sent us their authorization to join the California Tribal Amicus Brief in Support of Respondents in the Case. The Supreme Court has set Tuesday, April 16, 2013 to hear oral arguments in this important case.

Supreme Court Case – Amicus Authorization

March 22, 2013 – Deadline for Authorization to Join California Tribal Amicus Brief in Support of Respondents in the Case:

Adoptive Couple v. Baby Girl, Birth Father, and Cherokee Nation

If your Tribe would like to participate in the Tribal Amicus Brief the authorization must be in by 5pm, March 22, 2013.

On January 4th, the U.S. Supreme Court granted review of the above case involving the Indian Child Welfare Act. This case has the potential to affect the rights of Tribes nationwide… On behalf of California Tribes, California Indian Legal Services will be filing an amicus brief (“friend of the court”) in support of the Birth Father and the Cherokee Nation. CILS is asking all California tribes to join the amicus brief. If your tribe or tribal organization would like to join the amicus brief, you may complete and submit the authorization (click link).

Tax Assistance Has Arrived

Free Tax Assistance For Low-Income Workers

Call us for assistance or follow the link to complete your own online 2012 Tax Returns

California Indian Legal Services (CILS) has begun offering its free tax assistance services. Those interested in free assistance should call (800) 829-0284 extension 307 or go to the California Franchise Tax Board page for a list of free online tax return services. The programs are designed to help you claim the Earned Income Tax Credit, a special tax credit worth up to $5,891 for low income workers. Don’t lose out on this great tax credit and don’t pay commercial tax preparers to help you get it. Even if you don’t qualify for this tax credit, CILS may still be able to assist you at no cost.EITC

Income Eligibility Levels for 2012 Tax Year*


No. of children If taxpayer is single If taxpayer is married
0 $13,980 $19,190
1 $36,920 $42,130
2 $41,952 $47,162
3 or more $45,060 $50,270


* other factors also apply