The U.S. Supreme Court on Tuesday declined to take up an appeal about whether gambling revenues distributed to members of the Miccosukee Tribe of Indians of Florida are subject to federal income taxes.
The tribe appealed to the Supreme Court last year, after the 11th U.S. Circuit Court of Appeals ruled that the distributions are taxable. The Supreme Court, as is common, did not explain its reasons for declining to take up the case.
In its appeal, the tribe cited a federal law that allows untaxed “general welfare” distributions to members. It also said the case could have far-reaching implications for tribes across the country that operate gambling facilities.
“The Eleventh Circuit’s ruling strips the ability of tribal governments to administer their general welfare programs as they see fit,” lawyers for the Miccosukee Tribe argued in a January brief. “Most obviously, the ruling eliminates tribes’ ability to use gaming revenue for general welfare payments without suffering tax consequences. But that limitation is not found anywhere in the statute.”
But federal-government attorneys countered in an April brief, arguing that a “distribution of gambling revenues made equally to every tribal member does not satisfy that established and ordinary meaning” of a general welfare benefit.