Reservation Source Income

TRIBAL ALERT

FTB: RESERVATION SOURCE INCOME —- NOT SUBJECT TO TAXATION

Tribal leaders please circulate to all members

The Franchise Tax Board (FTB) has determined that income earned by a tribal member who lives and works on his or her reservation are not subject to state income tax, regardless of the source of the income. The FTB had previously been taxing the income of tribal members whose on reservation income was not from a “tribal source.” The FTB’s practice, which was contrary to established federal law, was brought to the attention of Cynthia Gomez, Tribal Advisor in the Governor’s Office, by the Hoopa Valley Tribe and California Indian Legal Services (CILS.)

Through discussions between the Governor’s Office and FTB, the FTB determined that it would no longer require that tribal member income would need to be from a “tribal source” in order to be tax exempt. The FTB has posted a notice on its website outlining the process for submitting a claim for a refund of income tax that was improperly assessed. Attached is a copy of the FTB webpage. The FTB will be notifying individual tribal members that they are aware of who were improperly assessed. However, the FTB may not be able to notify everyone and so we encourage all tribal members who believe they were improperly taxed on income that they earned on their reservation to contact the FTB as soon as possible even if they do not receive a notice from the FTB. If you have further questions you may contact your local CILS office for assistance.

For a .pdf version of this Alert, click here.

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Baby Girl transcript

Transcript available for Adoptive Couple v. Baby Girl Supreme Court hearing

The hearing was held April, 16th, 2013. Link to the 64-page transcript here. An audio recording of the hearing will be available by the end of the week.

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FTB Rescinds ‘Tribal Source Practice’

TRIBAL ALERT

April 4, 2013

FTB TO RESCIND ‘TRIBAL SOURCE’ PRACTICE – THOSE WHO FILED 2008 STATE INCOME TAXES HAVE UNTIL APRIL 15, 2013 TO FILE APPEAL & PRESERVE THEIR RIGHTS: Tribal leaders please circulate to all members

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.

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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.

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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.

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