Court: Tribes must pay taxes on pull tabs

OKLAHOMA CITY (AP) -- A federal appeals court says the Oklahoma Choctaw and Chickasaw Indian tribes must pay federal taxes on pull tabs they sell. <br><br>Pull tabs are sold at the tribes' gaming

Thursday, April 6th 2000, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -- A federal appeals court says the Oklahoma Choctaw and Chickasaw Indian tribes must pay federal taxes on pull tabs they sell.

Pull tabs are sold at the tribes' gaming centers, tobacco shops, convenience stores and other for-profit businesses.

The tribes contend they don't owe federal wagering and occupational excise taxes because pull tabs do not involve a taxable wager, the tribe isn't a "person" as defined by federal law, and Congress did not intend to subject Indian gaming activities to federal wagering excise taxes.

Also, the self-government treaties signed in the 1800s between the tribes and federal government preclude imposition of the taxes in question, the tribes argued.

The 10th U.S. Circuit Court of Appeals in Denver rejected all of the tribes' arguments in a 33-page ruling Wednesday.

In 1996, the Internal Revenue Service informed the Choctaw Nation it owed $155,317 in aggregate taxes. The Chickasaw Nation was told in 1997 it owed $41,600. Both tribes paid a small portion of the tax and immediately filed for a refund.

The case wound up in federal court in Muskogee, where a judge in December 1998 ruled in favor of the government. The tribes then appealed.

Pull tabs contain five windows covered with tabs, under which various symbols are found. The face of the pull tab discloses the combination of symbols that results in a winning ticket. To play, a purchaser simply pulls back each tab and checks the symbols to determine a winning ticket.

An attorney for the tribes, Bob Rabon, said he has not seen the ruling and couldn't comment. Chickasaw Nation Gov. Bill Anoatubby said his tribe would likely appeal the decision to the U.S. Supreme Court.