Tribal Code - Sault Ste. Marie Tribe of Chippewa Indians
Enacted July 5, 1995. Including Updates Through 2004.
CHAPTER 43: TRIBAL TAX CODE
SUBCHAPTER I: GENERAL PROVISIONS
The purpose of this Chapter is to provide for the taxation of businesses located on Tribal land or owned by the Tribe in order to provide revenues to fund Tribal internal services, governmental operations, and programs promoting the health, education, and general welfare of the Tribe and its members.
The authority for this Chapter is Article VII, Section 1 (d), (g), (k), (m) and (n) of the Tribal Constitution and the Indian Tribal Governmental Tax Status Act, 26 U.S.C. '7871.
43.103 Interpretation and Relation to Other Laws.
(1) In its interpretation and application the provisions of this Chapter shall be held to be minimum requirements and shall be liberally construed in favor of the Tribe, and shall not be deemed a limitation or repeal of any other Tribal power or authority.
(2) Where this Chapter contains provisions that are in conflict with provisions of previously enacted provisions of Tribal law, the provisions of this Chapter shall govern.
43.104 Severability and Non-Liability.
(1) If any section, provision or portion of this Chapter is adjudged to be unconstitutional or invalid by a court of competent jurisdiction, the remainder of this Chapter will remain unaffected.
(2) The Tribe declares that there is no liability on the part of the Tribe, its agencies, agents, or employees for any damages which may occur as a result of reliance upon or conformity with the requirements of this Chapter. The Tribe by adoption of this Chapter does not waive its sovereign immunity in any way.
43.105 Effective Date.
This Chapter shall take effect on January 1, 1997.
As used in this Chapter:
(1) "Board of Directors" means the governing body of the Tribe.
(2) "Business Income of the EDC" means income received by the Sault Ste. Marie Tribe Economic Development Commission from any source except from a Tribal Business, and includes all income from businesses in which the Tribe owns a portion of the equity or a right to participate in the income of the business.
(3) "Gross Receipts" means the total amount of money or the value of other considerations received from selling, renting or leasing property or from performing services. For a business licensed under Tribal Code Chapter 42: Gaming Ordinance, all gaming wins will be deducted for purposes of calculating gross receipts.
(4) "Internal Service" is a program or department of the Tribe which provides support and technical services to governmental programs and Tribal Businesses. At the time of adoption of this Chapter, internal services include these components: human resources, accounting, legal, central purchasing, communications, and management information systems.
(5) "Native American" means any natural person who is subject to federal criminal jurisdiction under the Major Crimes Act, 18 U.S.C. '1153.
(6) "Operating Income" means gross receipts minus total business related expenses, including the gross receipts tax and other taxes imposed by this Chapter or paid to another taxing authority.
(7) "Person" means any association, partnership, corporation, limited liability company, firm, trust, or other form of business organization as well as a natural person.
(8) "Tax Commission" means the entity created by Subchapter X of this Chapter to administer and enforce this Chapter.
(9) "Tax Commissioner" means the person appointed under Section 43.1005 to administer this Chapter.
(10) "Tax Year" means the calendar year.
(11) "Taxpayer" means the person entity liable for a tax under this Chapter.
(12) "Tribal Business" means a business wholly owned by the Tribe, regardless of the form of business organization and regardless of whether it is located on Tribal land.
(13) "Tribal Court" means the Sault Ste. Marie Tribe of Chippewa Indians Tribal Court.
(14) "Tribal Land" means:
(a) The Sault Ste. Marie Tribe of Chippewa Indians Indian Reservation and any other lands designated for the Tribe as reservation lands by the Secretary of the Interior; or
(b) land over which the Tribe exercises governmental power that is held in trust by the United States for the benefit of the Tribe or a member of the Tribe, or that is owned by the Tribe in fee and is located in a "dependent Indian community" as that term is used in 18 U.S.C. '1151(b).
(15) "Tribe" means the Sault Ste. Marie Tribe of Chippewa Indians.
SUBCHAPTER II: GROSS RECEIPTS TAX
43.201 Imposition of Gross Receipts Tax.
There is hereby levied and imposed a specific tax of 2.2% upon the gross receipts of each and every Tribal business.
43.202 New Business Exemption.
Any Tribal business which begins business operations after the effective date of this Chapter shall be exempt from the gross receipts tax during the first tax year of its operation. Thereafter, the Tribal business will have a partial exemption from the gross receipts tax in accordance with the following schedule:
|Second tax year of operation||75% exemption (pay 25% of tax)|
|Third tax year of operation||50% exemption (pay 50% of tax)|
|Fourth tax year of operation||25% exemption (pay 75% of tax)|
the fifth tax year of operation and all subsequent tax years, the Tribal
business shall pay the full tax. This exemption applies only to start-up
businesses and does not apply to a business purchased as a going concern
by the Tribe.
43.203 Estimated Payments.
Each Tribal business shall file a monthly return and make an estimated payment for each calendar month by the 15th day of the succeeding month. The estimated payment for each month shall be for the estimated gross receipts for the month or 1/12 of the estimated annual liability. The second and subsequent estimated payments in each tax year shall include adjustments, if necessary, to correct underpayments or overpayments from previous monthly payments in the tax year to a revised estimate of the annual tax liability.
43.204 Annual Return.
An annual or final return shall be filed with the tax commissioner, in the form and content prescribed by the tax commission, by April 15 of the succeeding year. Any final liability shall be remitted with the return.
43.205 Distribution of Tax Proceeds.
The proceeds of the gross receipts tax shall be credited to an internal services fund account for the funding of the internal services. Tax proceeds in excess of amounts budgeted for internal services shall be transferred to the Tribal operations fund. No internal service shall charge a tribal business for its basic services.
SUBCHAPTER III: BUSINESS INCOME TAX
43.301 Imposition of Business Income Tax.
There is hereby imposed a specific tax on income of the following, at the rate contained in Section 43.302:
(1) the operating income of each Tribal business.
(2) The business income of the EDC.
(3) The operating income of any business located upon Tribal Land.
The income described above shall be referred to as "taxable income."
43.302 Amount of Tax.
The amount of the tax imposed by Section 43.301 shall be the sum of:
(1) 10% of the taxable income between $50,001 and $250,000.
(2) 15% of the taxable income between $250,001 and $500,000.
(3) 20% of the taxable income between $500,001 and $750,000.
(4) 25% of the taxable income between $750,001 and $1,000,000.
(5) 30% of the taxable income in excess of $1,000,000.
43.303 Estimated Payments.
Each entity described in Section 43.301 shall file a quarterly return and make an estimated payment of its taxable income for each calendar quarter by the 15th day of the month following the end of the quarter; namely, April 15, July 15, October 15, and January 15. The estimated payment for each quarter shall be for the estimated net income for the quarter or 1/4 of the estimated annual liability. The second and subsequent estimated payments in each tax year shall include adjustments, if necessary, to correct underpayments or overpayments from previous quarterly payments in the tax year to a revised estimate of the annual tax liability.
43.304 Annual Return.
An annual or final return shall be filed with the Tax Commissioner, in the form and content prescribed by the Tax Commission, by April 15 of the succeeding year. Any final liability shall be remitted with the return.
[Subchapters IV through IX are reserved]
SUBCHAPTER X: ADMINISTRATION AND ENFORCEMENT
43.1001 Establishment of Tax Commission.
(1) The Tribal tax commission is hereby established. The tax commission shall consist of three (3) commissioners appointed by a majority vote of the Board of Directors. At least one commissioner shall also be a member of the Board of Directors.
(2) A commissioner shall serve for three years and may be removed from office prior to the expiration of that term only for cause by a vote of an absolute majority of the Board of Directors following a hearing.
(3) The first commissioners shall be appointed by the Board of Directors as follows: one shall be appointed to a full three year term, one to a two year term, and one to a one year term. Thereafter, all successive appointments shall be for a term of three years.
(4) Vacancies shall be filled within thirty days by the Board of Director for the balance of the term.
(5) The principal office of the tax commission shall be maintained in Sault Ste. Marie, Michigan.
43.1002 General Powers and Duties of the Tax Commission.
The tax commission shall have the powers and duties granted or imposed by this Chapter, which shall include the following:
(1) To administer the application and enforcement of this Chapter.
(2) To make recommendations to the Board of Directors regarding amendments to this Chapter.
(3) To demand access to and inspect, examine and audit all papers, books and records of all persons and entities subject to taxation under this Chapter, and require verification of any matter affecting the taxation of such person or entity or the enforcement of this Chapter.
(4) To conduct hearings authorized by this Chapter and to issue subpoenas and compel the attendance of witnesses, to administer oaths and to require testimony under oath at any such hearing. Any person making false oath in any matter before the tax commission is guilty of perjury. Any process or notice may be served in the manner provided for service of process and notices in a civil action in Tribal Court. The tax commission may pay transportation and other expenses of witnesses as it may deem reasonable and proper.
(5) To propose regulations as authorized by this Chapter.
(6) To meet at least quarterly with the tax commissioner.
(7) To receive and investigate complaints of violations of this Chapter or of its rules, and to refer for prosecution the results of any such investigation.
(8) To keep and maintain such files and records as deemed necessary.
(9) To take other action necessary and incidental to the enumerated powers and duties.
43.1003 Conduct of Tax Commission Business.
(1) The tax commission shall select annually from its membership a chairperson, who shall preside over tax commission meetings and hearings and shall have the power to convene special meetings of the tax commission. The chairperson shall be entitled to vote on any matter.
(2) The tax commission shall hold regular meetings at least quarterly. Regular meetings shall be open to the general membership of the Tribe. Meetings shall be conducted in accordance with bylaws adopted by the tax commission and approved by the Board of Directors.
(3) A quorum shall consist of three commissioners. All decisions shall be made by a majority vote of the commissioners attending the meeting, provided a quorum is present, unless otherwise provided in this Chapter.
(4) Matters dealing with personnel, enforcement, particular taxpayers, or other confidential matters shall be conducted in executive session and shall not be open to the public.
(5) A special meeting may be convened by the chairperson of the tax commission upon 48 hours written notice, but if the chairperson determines that a bona fide emergency exists, the special meeting may be conducted by telephone. The commissioners by unanimous consent may waive the notice requirement.
(6) The tax commission shall cause a record of all proceedings at its meetings to be made and kept. The minutes of every meeting shall be sent to the Secretary of the Board of Directors.
43.1004 Annual Report.
The Commission shall make an annual report to the Board of Directors by May 15 of the following year. The report shall include a summary of all tax revenues collected as provided in this Chapter and all investigative actions completed during the year.
43.1005 Appointment of Tax Commissioner.
The Board of Directors, with the advice and consent of the tax commission, shall appoint a tax commissioner who shall be responsible for the day-to-day management of the affairs of the tax commission and the administration of this Chapter and shall perform the specific duties imposed by this Chapter. The tax commissioner shall not have any personal interest in any entity taxed under this Chapter. The tax commissioner shall be appointed for a three year term, subject to the pleasure of the Board of Directors.
43.1006 Tax Regulations.
The tax commission shall, from time to time, propose for adoption, amendment, or repeal such regulations, consistent with the policy, objects and purposes of this Chapter, as it may deem necessary or desirable in the public interest in carrying out the duties of the tax commission as defined by this Chapter. Commission regulations shall be submitted to the Board of Directors for review and adoption by resolution. The tax regulations may include the following:
(1) The forms to be used by taxpayers.
(2) The form and manner in which taxpayers keep records, books and accounts.
(3) The manner and method of collection of delinquent taxes.
(4) Requirements concerning payment by a taxpayer of all or a portion of the costs of investigation of that taxpayer.
(5) Procedures for all hearings conducted by the tax commission.
(6) Protection of the due process rights of taxpayers and all individuals subject to the enforcement of this Chapter by the tax commission.
(7) Procedures for proposing rules by the tax commission.
43.1007 Distribution of Tax Proceeds.
The proceeds of each tax imposed by this Chapter shall be distributed by the tax commission in accordance with the provisions of the Subchapter imposing the tax. If no provision for distribution is made, tax proceeds shall be distributed to the general fund or account of the Tribe.
43.1008 Duty to Keep and Maintain Records.
A person or entity liable for any tax imposed by this Chapter shall keep and maintain accurate records in such form as to make it possible to determine the tax due under this Chapter.
43.1009 Tax Deficiencies or Overpayments.
(1) If it appears, either from examination of the tax return or from the examination authorized by Section 43.1012, that the taxpayer has not satisfied its liability under this Chapter, the tax shall be determined by the tax commissioner, and the taxpayer shall be notified of the determination. If the amount paid exceeds the correct amount of the tax, the excess shall be credited against a subsequent tax unless a refund is requested by the taxpayer.
(2) If the amount paid is less than the amount which should have been paid, the deficiency, together with interest at the rate of 1% per month from the time when the tax was due, shall become due and payable after notice as provided in this Subchapter. This provision applies to estimated tax returns as well as annual returns.
(3) If any part of the deficiency is due to negligence or intentional disregard of this Chapter or the rules of the tax commission, but without intent to defraud, there shall be added as a penalty 10% of the total amount of the deficiency, together with interest on the penalty as provided in sub. (2).
(4) If any part of the deficiency is due to a fraudulent intent to evade the tax, then there shall be added as a penalty 100% of the deficiency, together with interest on the penalty as provided in sub. (2).
43.1010 Failure or Refusal to File Return or Pay Tax.
(1) If a person fails or refuses to file a return or pay the tax as required by this Chapter, the tax commissioner as soon as possible shall assess the tax against the taxpayer and shall notify the taxpayer of the amount as provided in this Chapter.
(2) In the case of failure or refusal to file a return or pay the tax required by this Chapter, within the time prescribed by this Chapter, there shall be added a penalty of 5% of the tax for each month or fraction of a month during which the failure continues, to a maximum of 100%. In addition to the penalty, there shall be added interest at the rate of 1% per month on the amount of tax from the time the tax was due until the date of payment.
(3) When a tax return is filed or remittance is paid after the time specified by this Chapter and it is shown to the satisfaction of the tax commissioner that the failure was due to reasonable cause and not to willful neglect, the penalty may be waived.
43.1011 Assessment of Tax Upon Information Obtained by Tax Commissioner.
(1) If a taxpayer fails or refuses to make a return, either in whole or in part, or if the tax commissioner has reason to believe that any return made does not supply sufficient information for an accurate determination of the tax due, the tax commissioner may obtain information upon which to base an assessment of the tax. The tax commissioner or an authorized agent may examine the books, records and papers and audit the accounts of any taxpayer or any other records pertaining to the tax. As soon as possible after procuring the information as may be found to be available, the tax commissioner shall assess the tax determined to be due and shall notify the taxpayer of the amount of the assessment and the specific reasons for it.
(2) The assessment by the tax commissioner shall be final as to any taxpayer except as may otherwise be determined under the provisions of Section 43.1013.
(3) If a taxpayer fails to file a return or to keep and maintain proper, accurate, and complete records as prescribed by this Chapter, the tax commissioner may assess, upon the information as is available or may come into the possession of the tax commissioner, the amount of the tax due from the taxpayer. The assessment after notice and conference as provided in this Chapter shall be deemed to be prima facie correct for the purpose of this Chapter and the burden of proof of refuting it shall be upon the taxpayer.
43.1012 Limitation of Actions.
A tax deficiency, interest or penalty shall not be assessed for any year after the expiration of three years after the date set for the filing of the annual return for each year or the date the return was filed, whichever is later. If a taxpayer fraudulently conceals any liability for the tax or any part of the tax, the tax commissioner within two years of the discovery of the fraud shall assess the tax with interest and penalties as provided in this Chapter, computed from the date on which the tax liability originally accrued, and the tax, penalties and interest shall become due and payable after notice as provided in this Chapter. The limitation period will be suspended during the pendency of any hearing or other legal proceedings concerning the deficiency, upon the consent in writing of the taxpayer, and for any taxable year for which a return is not filed.
43.1013 Notice of Levy and Conference.
(1) In carrying out the provisions of this Chapter, the tax commissioner after determining the amount of tax due from a taxpayer shall give written notice to the taxpayer intent to levy the tax. The taxpayer may request an informal conference with the tax commissioner on the question of liability for the assessment if the request is made within 20 days of receipt of the notice. Upon receipt of a request for conference the tax commissioner shall set a time and place for the conference and shall give the taxpayer reasonable notice of the conference.
(2) The taxpayer may appear or be represented before the tax commissioner and may present testimony and argument. After the conference the tax commissioner shall render a decision in writing setting forth its conclusions and by order may levy any tax, interest and penalty found to be due and payable.
43.1014 Appeal to the Tax Commission.
A taxpayer aggrieved by any determination of tax liability made by the department may appeal to the tax commission as provided in rules promulgated by the tax commission. Such an appeal must be filed within 30 days of receipt of the notice of intent to levy tax or, if a conference with the tax commissioner was requested, of receipt of the order following the conference. The decision of the tax commission is final.
43.1015 Cooperation of Other Tribal Departments and Agencies.
The tax commissioner may utilize the services, information or records of any other department or agency of the Tribe in the performance of duties under this Chapter, and other departments or agencies of the Tribe shall furnish the services, information or records upon the request of the tax commissioner.
43.1016 Tax Credit or Refund.
(1) The tax commissioner shall credit or refund all overpayments of taxes, all taxes erroneously or illegally assessed or collected, all penalties collected without authority, and all taxes that are found unjustly assessed or excessive in amount, or wrongfully collected.
(2) A taxpayer who claims to have paid a tax which was not due under this Chapter may, on or before the expiration of four years after the date set for the filing of the annual or final return for the year or the date the tax was paid, whichever is later, petition the tax commissioner in writing to refund the amount so paid. If the annual return reflects an overpayment or credit in excess of the tax, the declaration on the return constitutes a claim for refund. If the tax commissioner agrees that the taxpayer's claim is valid, the amount of the overpayment, at the request of the taxpayer, shall be refunded to the taxpayer or credited against any current or subsequent tax liability. It the taxpayer disagrees with the tax commissioner's conclusion on the matter, the taxpayer may appeal the matter to the tax commission within 30 days after receipt of notice of the tax commissioner's decision.
(3) Interest at the rate of 1% per month shall be added to a refund 45 days after the due date or date the return is filed, whichever is later.
It shall be unlawful and a violation of this Chapter for any person to:
(1) Fail or refuse to make the return required by the Chapter, within the time specified in this Chapter, or make, aid, abet, or assist another in making a false or fraudulent return or false statement in a return required by this Chapter with intent to defraud the Tribe or to evade the payment of the tax, or any part of the tax, imposed by this Chapter.
(2) Aid, abet, or assist another in an attempt to evade the payment of the tax, or any part of the tax, imposed by this Chapter.
(3) Make or permit to be made for himself or for any business or association any false return or a false statement in a return, either in whole or in part, required by this Chapter.
(4) Violate any other provision of this Chapter or of tax regulations promulgated in accordance with this Chapter.
43.1018 Jurisdiction and Procedure.
(1) Jurisdictions is hereby conferred upon the Tribal court over criminal and civil enforcement actions for violations of Section 43.1017.
(2) A violation committed by a Native American shall constitute a crime, and proceedings shall be governed by Tribal Code Chapters 71 and 72.
(3) A violation committed by a person who is not a Native American shall constitute a civil infraction subject to a civil remedial money penalty, civil forfeiture of property, or both. Proceedings shall be governed by Chapter Seven of the Law and Order Code and by Tribal Code Chapter 84: Civil Remedial Forfeiture Code.
(1) The provisions of this Subchapter shall be enforce by Tribal law enforcement officers, and by anyone authorized or deputized to enforce this Chapter or Tribal law generally by ordinance or resolution of the Board of Directors.
(2) The tax commission shall have the authority to authorize special agents to perform services reasonably necessary to conduct investigations within the scope of the tax commission authority or to monitor and assure compliance with the provisions of this Chapter. When acting as a special agent, a person shall be accorded the privileges and protections of a Tribal law enforcement officer. The activities of special agents shall be under the supervision and the direction of the tax commissioner, unless otherwise determined by the tax commission. Nothing in this subsection shall limit the normal law enforcement functions of any special agent, nor of other Tribal law enforcement officers.
(1) A violation of Section 43.1017 by a Native American shall be punished by a fine of up to Five Thousand Dollars ($5,000.00) or up to one year in jail, or both.
(2) A violation of Section 43.1017 by a person who is not a Native American shall be remedied by a civil remedial money penalty of up to Five Thousand Dollars ($5,000.00).
(3) In addition to the remedies in sub. (1) or (2), any property used in the commission of any violation may be forfeited as provided in Tribal Code Ch. 84: Civil Remedial Forfeiture Code. Any vehicle used in transporting a violator to or from the location of the violation shall be deemed to have been used in the commission of such violation.
(4) The remedies in this section are not intended to be exclusive, but shall be in addition to and independent of:
(a) any applicable contractual remedy;
(b) any disciplinary action taken against a violator as an employee;
(c) any prosecution or other enforcement action under federal or state law or under the provisions of any other chapter of the Tribal Code, including a prosecution for perjury for false statements on a tax return.