Military to stop withholding income tax from some Indians

Wednesday, December 13th 2000, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ The Pentagon has agreed to stop improperly withholding state income taxes from the salaries of certain American Indians in the military, a California lawmaker said.

U.S. Rep. George Miller, D-Calif., said the decision could mean thousands of dollars each year for some Indians.

Indians in Oklahoma who live on tribal land and work for the tribe are exempt from state income taxes, according to the Oklahoma Tax Commission. The commission says Indians keep that tax exemption when they enter military service.

Miller said the Pentagon has ignored exemption and has continued to withhold income taxes, even though there was evidence that the act was improper.

``This decision redresses a decades-old wrong and returns to thousands of Indians in the military money to which they are entitled,'' he said.

``The administration's decision is also an important recognition of the sovereign rights of Indian tribes in our country.''

He said he was disappointed that states will not automatically refund money previously withheld from wages.

Miller encouraged those who qualify for the tax exemption to apply for a refund. A statute of limitations may apply to those who have retired from military service, he said.