INDIANS ‑- LIABILITY FOR PERSONAL PROPERTY TAX -- TAXATION ‑- PERSONAL PROPERTY ON INDIAN RESERVATION OWNED BY INDIANS TAXABLE

INDIANS ‑- LIABILITY FOR PERSONAL PROPERTY TAX --TAXATION ‑- PERSONAL PROPERTY ON INDIAN RESERVATION OWNED BY INDIANS TAXABLE

Livestock and other personal property to which a noncompetent Indian residing upon the Colville Indian Reservation has unrestricted title is taxable by the State of Washington.

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                                                                     July 1, 1953

Honorable John N. Leavitt
Prosecuting Attorney
Okanogan County
Okanogan, Washington                                                                                                                Cite as:  AGO 53-55 No. 79

Dear Sir:

            We state the question contained in your letter of June 2, 1953, as follows:

            Is livestock (and other personal property) to which a noncompetent Indian residing upon the Colville Indian Reservation has unrestricted title, taxable by the State of Washington?

            You are advised:

            Livestock and other personal property to which a noncompetent Indian residing upon the Colville Indian Reservation has unrestricted title is taxable by the state of Washington.

                                                                     ANALYSIS

            The Colville is a legally constituted Indian Reservation.  U.S. v. Ferry County, 24 F. Supp. 399.

             [[Orig. Op. Page 2]]

            The state has, however, authority to levy and collect taxes on personal property situated within the reservation (AGO April 30, 1953, to the Honorable John N. Leavitt, Prosecuting Attorney, Okanogan County).

            Does the fact that the Indian is incompetent exempt his personal property from taxation, Congress not having expressly done so?

            When it was the policy of the Federal government to hold title to personal property in trust for the Indian, a state tax thereon was a forbidden burden on a Federal instrumentality.  Olney v. McNair, 105 Wash. 19, U.S. v. Rickert, 188 U.S. 432; U.S. v. Thurston County, 143 Fed. 287; U.S. v. Pearson, 231 Fed. 270.

            For a concise statement of the changing policy of the government, see the Handbook of Federal Indian Law sponsored by the United States Department of the Interior and sold by the Superintendent of Documents at Washington, D. C., prepared by Felix S. Cohen, Chairman, Board of Appeals Department of the Interior, and first printed in 1941, pages 195, 257, 260 and 262.

            The Supreme Court of the State of Washington in Olney v. McNair (decided in 1919) relied upon Federal decisions stemming from earlier rulings, which have been frequently reconsidered.

            SeeJaybird Mining Co. v. Weir, 271 U.S. 609 (1926); Shaw v. Oil Corporation, 276 U.S. 575 (1928);Helvering v. Producers Corporation, 303 U.S. 376 (1938):  Oklahoma Tax Commission v. U.S., 319 U.S. 598 (1943); U. S. v. Hester, 137 F. (2d) 145 (1943); Oklahoma Tax Commission v. Texas, 336 U.S. 342 (1949).

            In theJaybird case (1926), with one justice dissenting, the court held that a statead valorem tax on lead and zinc ore, being personal property removed from restricted Indian lands, was void.  InOklahoma Tax Commission v. U.S. (1943), the majority of the court applied a state tax to restricted cash and securities owned by Indian wards of the Federal government.

            The state may levy and collect a tax on livestock or any personal property to which noncompetent Indians residing upon the Colville Indian Reservation hold  [[Orig. Op. Page 3]] unrestricted title.  The state may not tax personal property held by the Federal government in trust for the Indians.

Very truly yours,

DON EASTVOLD
Attorney General

E. P. DONNELLY
Assistant Attorney General