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City of Sherrill Rescued from Potential Tax Squeeze


Indian Nation Delayed Too Long, Repurchases Do Not Restore Sovereignty

By Carol W. LaGrasse, June 2005

The Oneida Indian Nation will have to abide by the laws of New York State and local government within its reacquired ancestral lands, because it waited too long to repurchase the lands and assert sovereignty over them, according to a U.S. Supreme Court ruling on March 29. The lands were once part of the protected homelands of the Oneida Indian Nation, but were sold and inhabited by non-Indians for approximately 200 years. In 1920, only 32 acres of land remained in Oneida hands of the 300,000 acres protected by the 1794 Treaty of Canadaigua. During recent years, the Oneidas have been using revenue from their Turning Stone Resort and Casino to repurchase lands in Oneida and Madison Counties that were part of their reservation. They have been declaring sovereignty over the land and have refused to pay real estate taxes to the City of Sherrill.

The Oneidas' scattered holdings have built up to 17,000 acres. They have refused to pay property taxes on a gas station and convenience store on the basis that they were exempt because the land is within the bounds of the original Oneida reservation. The City of Sherrill went to state court to evict the Oneidas for non-payment of the property taxes. The Oneidas petitioned the federal court to be declared exempt from the taxes on the basis that, since the lands were part of their original reservation, they possessed a "unified fee and aboriginal title and may now assert sovereign dominion over the parcels." The cases led to the Supreme Court decision, City of Sherrill v. Oneida Indian Nation of New York.

In 1985, the Supreme Court had ruled that the Oneidas could go to court against the State of New York and the United States government for damages for the State's purchasing the reserved land from the Oneidas and the federal government's complicity in failing to stop the many such transactions, which began in 1795 with a 100,000-acre sale to the State.

But in the tax dispute, the Supreme Court ruled that the Oneidas should use two other means to seek relief. The Secretary of Interior had the power to acquire lands in trust for the Indians and exempt that land from state and local taxes. In addition, the Oneidas could find redress by seeking damages for past wrongdoing under the 1985 ruling.

The Supreme Court ruled that the Oneidas had to pay real estate taxes. Justice Ruth Bader Ginsberg gave several interrelated reasons for her majority opinion: The checkerboard distribution of the properties owned by the Indians would lead to a burden of administration. The Oneidas' ancient sovereignty was not revived by the reacquisition of the land, considering the "longstanding distinctly non-Indian character of the land." She pointed to the disruption of government that would occur if the tribe's petition were granted. "Today, we decline to project redress for the tribe into the present and future, thereby disrupting the governance of central New York's counties and towns." And there had been a long delay by the Oneidas in seeking relief. "Generations have passed during which non-Indians have owned and developed the area that once composed the tribe's historic reservations."

Justice Ginsburg wrote that "the Oneidas had long ago relinquished governmental reins and cannot regain them through open-market purchases from current titleholders." All of the Supreme Court judges joined in the decision except Justice John Paul Stevens.

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