A federal appeals court is poised to take up a long-running dispute about whether the Seminole Tribe of Florida should have to pay state taxes on fuel it uses on tribal lands.
State and federal courts have backed the Florida Department of Revenue in the dispute, which involves vehicles filling up at gas stations that are off Seminole property but using the fuel on tribal lands. The 11th U.S. Circuit Court of Appeals will hear arguments Dec. 10 in Miami, as the tribe seeks to overturn the dismissal of a case in a lower federal court.
The Seminoles contend that federal law bars the state from taxing fuel that the tribe uses on its sovereign lands. But attorneys for the Department of Revenue, in a brief filed in the appeals court, said the crux of taxing fuel is where it is pumped -- not where it is used.
"The decisive issue in this case is whether the tribes off-reservation purchases of motor fuel are subject to Floridas motor fuel tax,'' the state's brief said. "The plain language of Floridas motor fuel tax statute and the explicit jurisprudence of the United States Supreme Court provide that the tribe must pay state motor fuel tax when it places the fuel in the tanks of its vehicles off of its reservation and trust lands."
But attorneys for the tribe argued, in part, that the tax is imposed on the "use" and not the purchase of fuel. They also argue that part of the U.S. Constitution known as the "Indian Commerce Clause" bars the state from taxing fuel the tribe uses on its reservation.
"The department contends, if the tribe's vehicle is physically located at an off-reservation fueling station when the fuel is placed into its fuel tank, the fuel is deemed to have been 'used' off-reservation and, therefore, the Indian Commerce Clause does not apply,'' a tribe brief says. "The essence of the department's argument is that a state may avoid the constitutional limitations on its authority to tax on-reservation activities by simply enacting a statute which deems an on-reservation activity to have occurred off-reservation."
Florida uses fuel taxes to help pay for transportation and road improvements.
A state appeals court in 2011 ruled against the tribe, and the Florida Supreme Court later refused to take up the issue. The tribe filed a lawsuit in U.S. District Court in South Florida that argued the state's imposition of the tax violated federal laws such as the Indian Commerce Clause.
A district judge dismissed the case, finding in part that the claims were essentially a review of the earlier state-court ruling, according to briefs. The tribe then went to the 11th U.S. Circuit Court of Appeals to try to get the dismissal overturned.