New casino ruling for South Dakota tribe

A federal judge said that it can’t force a tribe to pay taxes on its casino renovation.

US.- After the Flandreau Santee Sioux Tribe of South Dakota sued the state last year claiming that the non-tribal contractors working on the Royal River Casino expansion were not required to pay the tax, the tribe received good news this week on the legal case.

A federal judge has ruled that the state cannot force the tribe to pay taxes on the US$24 million casino expansion. Last year, the state rejected the casino’s contention that the non-tribal contractors working on the facility were not required to pay the tax. Current South Dakota laws establish that contractors need to pay two per cent of their gross receipts on construction projects.

Judge Karen Schreier argued that the South Dakota law violated the Indian Gaming Regulatory Act, the federal law that allows tribes to operate casinos. “The state’s excise tax undermines the objective of IGRA because the tax is passed from the contractor to the tribe which interferes with the tribe’s ability to make a profit from gaming activities,” Schreier wrote.

”Thus, Congress intended for IGRA to completely regulate Indian gaming and there is no room for the state’s imposition of an excise tax.”