Department of Revenue is seeking $1.25 million in unpaid state
motor-fuel taxes from the Winnebago Tribe of Nebraska. Kansas
law requires all motor fuel distributors to remit motor fuel tax
on fuel delivered to retailers and wholesalers in the state.
KDOR seized two tanker trucks and 8,500 gallons of fuel owned
by the tribe and used to deliver fuel. The state also has filed
a six-count criminal charge against John Blackhawk, Winnebago
tribal chairman, and Lance Morgan, executive director of Ho-Chunk
Inc. (owner of impounded trucks) for failure to pay fuel taxes
from August 2001 to March 2002.
argue that the Kansas state fuel tax is inapplicable because the
tribe is a sovereign entity selling the fuel on tribal reservations.
According to the doctrine of tribal immunity, American Indians
are exempt from state taxes on fuel sold on Indian reservations
and tribal trust lands.
ago, the Winnebago Tribe (residents of Nebraska) began distributing
and selling its own fuel as HCI Distribution after it acquired
bulk-transfer capabilities and fuel-blending facilities. The tribe's
home state of Nebraska began raising objections when it discovered
the Winnebago tribe was selling tax-free fuel to non-Indian customers.
with Nebraska over tax-free fuel sales was settled earlier this
year after the tribe agreed to charge a 24-cent fuel tax, which
is equivalent to the state's tax rate, to both customer bases.
Then, the tribe remits a quarter of its tax collections to the
state to account for the estimated 25 percent of non-Indian customers.