Seminoles Duck Taxes on Leased-Out Casino Space

MIAMI (CN) - Florida cannot tax the Seminole Tribe for revenue it earns from renting out casino space on its Indian reservation, a federal judge ruled.

The Seminole Tribe is a federally recognized Indian tribe with reservations throughout Florida. It operates hotels and casinos on its land in Hollywood, Fla., and Tampa, Fla.

In a 2012 complaint, the tribe complained that Florida imposed rental and utility taxes on the tribe for space it leased at its Hollywood and Tampa casinos to Ark Hollywood and Ark Tampa.

Though the Seminole argued that federal law prohibits rental taxes imposed on tribal land, Marshall Stranburg, director of the Florida Department of Revenue, called the assessment a privilege tax imposed on non-Indian tenants for the use of commercial property. He said neither Section 465 of Title 25 nor Subsections 162.001-162.703 of Code of Federal Regulations 25 prohibit the charge.

There is nothing that bars the Seminole from paying an excise tax for the privilege of leasing real property, Stranburg said.

U.S. District Judge Robert Scola sided with Seminole on Friday, saying the law prohibits both taxes, and that there is no evidence or authority to prove otherwise.

"This court finds that federal law prohibits Florida from collecting the Rental Tax from the Ark entities for their leases of reservation land," Scola wrote. "The court further finds that federal law preempts the application of the rental tax to the tribe's leases with the Ark entities. The court also finds that federal law prohibits Florida from collecting the utility tax from the tribe since the legal incidence of the utility tax falls on the Seminole Tribe."

After granting the Seminole summary judgment, Scola directed the case to be closed.

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