Connecticut to Assemble Task Force to Address Tribal Taxation

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A new law in Connecticut will establish a special working group to find solutions to the issue of dual taxation on tribal territory.

The group will be made up of representatives from federally recognized tribes, the Mashantucket Pequot and Mohegan Tribe. The tribes are each considered sovereign nations with their own constitutions, laws and systems of taxes. The tax collected allows tribes to provide services like police, firefighters and health care to people on tribal land.

Charles Bunnell, the chief of staff for the Mohegan Tribe, said some property owners on tribal territory pay tax to the local town and the tribe. The towns of Ledyard and Montville have the ability to charge property tax on non-native business on the tribe’s territory.

“This is called dual taxation of someone doing business on the reservation,” Bunnell said. “So the real governmental body that should be charging those taxes is the tribal nation.”

Bunnell said a task force will study the issue and make recommendations. He said because changing tax laws can be incredibly complicated, the group will examine laws and agreements of the two tribes with the state and surrounding towns.

“When they looked to fix this issue in Connecticut, they realized that it wasn’t as simple as just passing a quick law,” Bunnell said. “It required a lot more input from experts to understand the differences between these two tribes.”

The task force will be led and chaired by the secretary of the Office of Policy and Management. The group will also consist of ranking members of the joint standing committees of the General Assembly, at least one representative of each such tribe and at least one representative of each municipality. The group is expected to submit a report no later than Jan. 1, 2024.

The change comes years after the Mashantucket Pequot Tribe sought declaratory and injunctive relief regarding a personal property tax imposed by the Town of Ledyard. According to the Hartford Courant, the dispute ended in 2021 when the state Supreme Court gave the Town of Ledyard a $1 million legal victory.

The town wanted to tax the sovereign tribal nation for slot machines it leased for its Foxwoods Resort Casino. The $1 million included a $18,000 tax bill from 2006 and legal fees the town spent.

Mashantucket Pequot Tribe Chairman Rodney Butler told the Legislature’s Finance, Revenue and Bonding Committee that double taxation hinders the tribe’s ability to attract businesses.

“We are happy to engage with the study group, although we believe MPTN has already put forward significant information on this topic and the solution is clear cut,” Lori Potter, a spokesperson for the tribe, said in a statement regarding the new law. “If the effort will help facilitate passage of the exemption we’ve proposed, we welcome an opportunity to do that.”

Source: WSHU