Wisconsin tribes argue for property tax exemption at Seventh Circuit

CHICAGO (CN) — Four Wisconsin Chippewa tribes argued before a Seventh Circuit panel Monday that their lands are shielded from property taxes by an 1854 treaty.

The tribes – the Lac Courtes Oreilles, Lac du Flambeau, Red Cliff and Bad River bands of Lake Superior Chippewa – scored a partial victory earlier this year after a federal judge ruled that reservation lands held by the Chippewa were not taxable by the state.

However, in his ruling, Chief U.S. District Judge James Peterson also found that tribal land could be taxed if the property had been sold to a non-Indian owner, even if the land was later returned to tribal ownership, which occurred with some of the reservation property at issue.

The tribes were not satisfied with the decision and took the case to the Seventh Circuit, where a three-judge panel heard oral arguments during a roughly 40-minute hearing on Monday.

Attorney Vanya Hogen of Hogen Adams argued on behalf of the Chippewa tribes that the district court erred when it ruled that tribal land could be taxed once it was held by a non-Indian.

Central to the case is a 1854 treaty, which ceded most tribal land on the northern and western shores of Lake Superior to the U.S. government. However, the treaty also established reservation lands that, according to Hogen, were never to be taxed.

“The 1854 Treaty of La Pointe precludes state taxation of all reservation fee lands. It is uncontroverted that the tribes’ main purpose in negotiating the 1854 treaty was to secure permanent homes for their members, from which they would never be forced to remove,” Hogen wrote in a brief submitted to the Chicago-based appeals court.

U.S. Circuit Judge Candace Jackson-Akiwumi, an appointee of President Joe Biden, asked Hogen how taxable status is affected by the current owner of the land.

“Isn’t the more critical issue here the status of the landowner at that point?” Jackson-Akiwumi asked. “Not that a sale or a conveyance took place, but that the person holding title at that moment is an Indian or non-Indian.”

Hogen answered that when a tax falls upon a tribal land holder who is a Native American, then the state needs explicit congressional authorization to impose the property tax and that in this case Wisconsin lacks such authority.

Wisconsin Assistant Attorney General Thomas Bellavia argued for the state and told the judges that the technical matter at hand is whether the land is “alienable,” meaning if it can be transferred to new ownership.

“The U.S. Supreme Court has held for a long time that if Congress makes reservation land alienable, that alienability brings with it subjection to be taxable by the state, even if Congress has not explicitly said that in the legislation, that the land is taxable.” Bellavia said.

Jackson-Akiwumi asked Bellavia where he found the principle that land could be taxed even absent congressional action.

Bellavia responded by saying that it was not actually spelled out, but U.S. Supreme Court decisions have wrestled with the question of when land is alienated and what that does to protected status.

He went on to argue that the law should be interpreted to mean that once the tribal land is transferred to a non-Indian, it loses the protections it once had.

Bellavia noted the state is not challenging the district court’s ruling regarding tribal land held by tribal members being tax exempt, instead only arguing that it is taxable once it was transferred to a non-Indian.

Hogen echoed her earlier arguments during her closing statement, saying that the treaty does not allow for one individual to negate key provisions of the treaty because they sold or transferred land.

“What’s absolutely clear here, and what the state doesn’t dispute, is that the tribes do have a treaty right, and contrary to what Mr. Bellavia was saying, that right cannot be abrogated by the action of an individual selling a piece of property,” Hogen said.

Jackson-Akiwumi was joined on the panel by U.S. Circuit Judges Michael Scudder and Thomas Kirsch, both Donald Trump appointees. The judges did not indicate when they will issue a ruling.

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