2021 Oklahoma Statutes
Title 68. Revenue and Taxation
§68-500.63. Sale of motor fuels by Indian tribes.

A. The Legislature hereby finds:

1. Some Indian tribes within the State of Oklahoma are engaged in the retail sales of motor fuels at locations within their sovereign territories;

2. Both Indian tribes and the government of the State of Oklahoma impose motor fuel taxes;

3. By reason of the ruling of the United States Supreme Court in "Oklahoma Tax Commission v. Chickasaw Nation", 115 S.Ct. 2214 (1995), the State of Oklahoma does not now collect state motor fuel taxes on sales made by Indian tribes. The Legislature hereby acknowledges that, as a matter of federal law, the existing law of the state may not be used to levy or enforce taxes on certain sales of motor fuel made by Indian tribes;

4. It is mutually beneficial to the State of Oklahoma and the federally recognized Indian tribes of this state, exercising their sovereign powers, to enter into contracts as set forth in subsection B of this section, for the purpose of limiting litigation on the issue of state government taxation of motor fuel sales made by Indian tribes. It is in the interest of this state to resolve disputes between the state and federally recognized Indian tribes on this issue by entering into contracts under which the Indian tribes are in part compensated for any tribal motor fuel tax revenues the Indian tribes might lose by reason of the adoption and enforcement of this act. Such mutually beneficial agreements allow both the State of Oklahoma and the Indian tribes to benefit from tax revenues from sales of motor fuel on Indian country.

B. In lieu of the refund procedure provided in subsection E of Section 14 of this act for the exemption provided for sales of motor fuels by an Indian tribe to its tribal members as provided in paragraph 10 of Section 10 of this act, an Indian tribe, on its behalf and on behalf of its members, may elect to enter into a contract with the State of Oklahoma as provided in subsection C of this section.

C. The State of Oklahoma hereby makes the following offer to all federally recognized Indian tribes within this state which, if accepted, will constitute a contract between this state and the accepting tribe or tribes:

1. The accepting tribe shall agree that it will not challenge the constitutionality of this act or the application of this act to motor fuel sales on Indian country in any court or tribunal and shall include all state motor fuel taxes and assessments in the price of its motor fuel sales, including but not limited to sales to tribal members on tribal land. The accepting tribe shall agree as a material term of its agreement to abide with all parts of this act in its entirety and shall agree not to procure, or attempt to procure, motor fuel for sale in Indian country on which the tax imposed by this act has not been precollected as provided for herein;

2. In consideration of this agreement by the tribe or tribes, the State of Oklahoma, through the Oklahoma Tax Commission, shall withhold a percentage of its motor fuel tax revenues, as specified in paragraph 3 of this subsection, which shall be apportioned quarterly to the accepting Indian tribes. The funds apportioned as provided herein are deemed to be in lieu of tribal tax revenues that the tribes would otherwise have collected on sales of motor fuels. The first such apportionment shall be made not later than February 1, 1997, which shall be for motor fuels taxes received by the Tax Commission during the last calendar quarter of 1996, and subsequent apportionments shall be made no later than thirty (30) days after the end of each calendar quarter thereafter. The first such apportionment shall be made to all tribes which have elected and accepted the terms of the contract specified in this subsection before October 1, 1996. Any tribe electing and accepting the terms of the contract specified in this subsection on or after October 1, 1996, shall be eligible to receive quarterly apportionments beginning with the calendar quarter following such election;

3. The percentage of state motor fuel tax and assessment revenues collected pursuant to the provisions of this act which shall be withheld monthly and apportioned quarterly to accepting Indian tribes shall be as follows:

• a.for the portion of the fiscal year beginning July 1, 1996, for which this act is effective, three percent (3%),
• b.for the fiscal year beginning July 1, 1997, four percent (4%), and
• c.for the fiscal year beginning July 1, 1998, and for each fiscal year thereafter, four and one-half percent (4 1/2%);

4. The funds withheld by the Oklahoma Tax Commission pursuant to paragraph 3 of this subsection shall be apportioned quarterly to each accepting Indian tribe as follows:

• a.each accepting Indian tribe shall receive a base quarterly sum of Six Thousand Two Hundred Fifty Dollars ($6,250.00). If the gross state motor fuel tax revenues collected do not exceed One Hundred Million Dollars ($100,000,000.00) in any fiscal year, the provisions of this subparagraph shall not be applicable,
• b.to those tribes who were engaged in the sales of motor fuels during the fourth calendar quarter of the calendar year 1996:
• (1)for the fiscal year beginning July 1, 1996, an amount equal to ten cents ($0.10) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
• (2)for the fiscal year beginning July 1, 1997, an amount equal to eight cents ($0.08) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
• (3)for the fiscal year beginning July 1, 1998, an amount equal to six cents ($0.06) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
• (4)for the fiscal year beginning July 1, 1999, an amount equal to four cents ($0.04) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996, and
• (5)for the fiscal year beginning July 1, 2000, and thereafter for the duration of the contract, an amount equal to two cents ($0.02) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996, and
• c.after determination of amounts to be apportioned pursuant to subparagraphs a and b of this paragraph, the remainder shall be apportioned according to the proportion the accepting Indian tribe's total Oklahoma resident membership bears to the total Oklahoma tribal resident membership of all accepting Indian tribes;

5. The funds withheld by the Oklahoma Tax Commission and apportioned quarterly pursuant to the provisions of this section shall be used by the accepting tribe exclusively for tribal government programs limited to highway and bridge construction, health, education, corrections, and law enforcement;

6. In the event, at any time during a calendar quarter, an accepting tribe selling motor fuel fails to procure, for whatever reason, motor fuel for sale in Indian country on which the tax imposed by this act has been precollected as provided in this act, or fails, for whatever reason, to include all state motor fuel taxes and assessments in the price of its motor fuels sales including, but not limited to, sales to tribal members on Indian country, the tribe shall not be eligible to receive an apportionment under this section for that calendar quarter. In such instances, the Tax Commission shall notify the tribe that its apportionment shall be withheld and the reasons therefor. The tribe shall have six (6) months from the date of issuance of the notice under this paragraph to file a legal action contesting the decision of the state to withhold its apportionment. The amount withheld from the tribe pursuant to the provisions of this paragraph shall not be apportioned and shall be withheld from all tribes until the expiration of the six-month limitation period and during the pendency of any legal action filed pursuant to this paragraph.

7. Each tribe shall provide to the Oklahoma Tax Commission an audit of its tribal membership or citizenship rolls certified by a certified public accountant showing the correct number of its respective tribal members by blood, excluding members of bands, tribal towns and other tribes or affiliates which may be included on its rolls but who are ineligible for tribal services and benefits. Only tribal members who reside within the State of Oklahoma shall be included in the audit. Citizens of tribal towns, bands of Indians and tribes who are also counted in the audits as members of another tribe participating in the contract provided for in this section and eligible to receive services from the tribe shall not be eligible to also participate under this section. Any tribal member who is also a member of another tribe may only be counted once for purposes of determining tribal membership. Those tribes who were engaged in the sales of motor fuels during the fourth calendar quarter of calendar year 1996 shall also provide certified audited reports on or before January 10, 1997, showing the quantity of motor fuels sold by them during that period. For all tribes electing to accept the terms of the contract specified in this subsection before October 1, 1996, the membership audit report shall be submitted on or before October 1, 1996, and not later than July 1 of each year thereafter. The information provided shall be the basis from which the Oklahoma Tax Commission shall calculate the distribution of the funds withheld pursuant to the provisions of this section. The State of Oklahoma shall be absolved of any liability if the information submitted pursuant to the provisions of this section is not correct. If such information is not submitted by an accepting or participating tribe by October 1, 1996, or in subsequent years by July 1, the Tax Commission shall calculate the distribution of the funds on the basis of the information previously submitted by that tribe. Notwithstanding the provisions of Section 205 of Title 68 of the Oklahoma Statutes, copies of the audits and reports shall be made available to any requesting participating tribes;

8. Acceptance of the offer contained in this section shall be made in writing to the Oklahoma Tax Commission, signed by the chief executive officer of the tribal government, stating that the tribe accepts, without condition, the terms of this section, and for the sole purpose of resolving disputes arising out of a contract entered into pursuant to the provisions of this section, the tribe waives its immunity from suit and liability in state and federal court. In addition, proof of adoption of an ordinance or resolution by the governing body of the tribe accepting without condition the terms of this section, and an effective waiver of its immunity, as specified herein, shall be required. Notwithstanding the enactment of any future legislation on this topic, the term of the contract created by the acceptance of this offer shall extend through and include fiscal year 2016 and shall be renewed for successive ten-year terms unless a tribe notifies the State of Oklahoma of its intention not to participate further or the State of Oklahoma notifies the tribe of its intent not to participate further. Notification by the tribe shall be made in the same manner as required by this paragraph for acceptance of the offer to participate in the contract. Notification by the state shall be made by the Governor in writing to the tribe, and such notification shall be filed with the Secretary of State;

9. The State of Oklahoma hereby waives its immunities from suit granted by the Eleventh Amendment to the Constitution of the United States for the sole purpose of resolving disputes arising out of a contract entered into pursuant to the provisions of this section;

10. Both the State of Oklahoma and the accepting Indian tribe recognize, respect and accept the fact that under applicable laws each is a sovereign with dominion over their respective territories and governments. By entering into this proposed intergovernmental contractual relationship, neither the state nor the tribe has, in any way, caused the other's sovereignty to be diminished;

11. Members of accepting tribes shall not be individually eligible for the exemption provided in paragraph 10 of Section 10 of this act. Apportionment of funds to accepting tribes pursuant to the provisions of paragraph 4 of this subsection are in part in lieu of the refunds to individual tribal members as provided in paragraph 10 of Section 10 of this act. Indian tribes shall continue to be eligible for the tribal government exemption provided in paragraph 7 of Section 10 of this act;

12. A tribe accepting the offer contained in this section agrees to hold the state harmless from suit by its individual tribal members and further agrees that, if a final judgment is rendered against the state pursuant to such a suit, that the tribe will reimburse the state for the amount of any such judgment paid and any costs incurred by the state pursuant to such suit. If a tribe fails to make such reimbursement within ninety (90) days of demand by the Oklahoma Tax Commission, the state shall withhold such amount from the apportionment of funds to the tribe pursuant to the provisions of paragraph 4 of this subsection; and

13. A tribe accepting the offer contained in this section agrees not to license or otherwise authorize an individual tribal member or other person or entity to make sales of motor fuel in violation of the terms of the contract.

Added by Laws 1996, c. 345, § 63, eff. Oct. 1, 1996.