Tribal Sovereignty, Sales Tax, and States Interference: Why Tax Compacts May Be the Best Way Forward

Tribes as sovereigns have the power of taxation.When states seek to impede this power by imposing their own taxes on non-member transactions on Reservations, Tribes must decide if imposing their own Tribal tax outweighs the risk of increased prices deterring business and business partnerships.This is the issue of double taxation.This Note investigates paths of remedy that address the burden of double taxation specific to sales taxes.Specifically, it looks at tax preemption, litigation, and policy.Preemption is difficult, and the existing case law framework on state tax preemption in Indian Country is complex, fact specific, and generally favors the state.Current federal policies fail to address this issue, and states are unlikely to preempt their own taxes without gaining something in return.Tribe-state tax compacts offer a compromise that releives some of the burden borne by Tribes, but also requires concessions.This Note argues that while imperfect, these tax compacts may be the best remedy to double taxation in Indian Country and offers suggestions for how these binding agreements between sovereigns can be used to enforce state respect for Tribal sovereignty.† J.D. Candidate 2026, University of Minnesota Law School and the Managing & Research Editor of the Minnesota Journal of Law & Inequality, Vol.44.I first want to thank my grandparents for their unfettered support of my education and for teaching me the joy that comes with a love for learning.To my parents and family, thank you for shaping me into the person I am today.To all my loved ones, thank you for grounding me in the strength of community throughout law school.To my legal mentors, thank you for exposing me to so many realms of the legal field, for teaching me that legal excellence does not come at the cost of creative problem solving, and for showing by example how to practice with integrity.Last but not least, I would like to thank everyone who has helped shape this Note, including my faculty advisor and my fellow journal editors and staffers.To the readers, my hope is that this Note serves as a concise and detailed resource illustrating potential paths of remedy.This Note should not be used to tell Indigenous tribes and nations what they should or should not do.Tribal sovereignty must always be respected.1. Indigenous people identify differently, for example as "Indigenous," "Native," "Indian," as is their right.This Note uses the term "Indian" consistent with Federal Indian law.The word "Tribe" will be capitalized when referencing a specific tribe and be uncapitalized when referring to tribes and tribal nations generally as a category of sovereigns.See