{"id":114516,"date":"2019-09-10T01:32:56","date_gmt":"2019-09-10T08:32:56","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=114516"},"modified":"2019-09-10T14:21:57","modified_gmt":"2019-09-10T21:21:57","slug":"south-dakota-tribal-casino-expansion-subject-to-tax-circuit-court-rules","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/south-dakota-tribal-casino-expansion-subject-to-tax-circuit-court-rules\/","title":{"rendered":"South Dakota Tribal Casino Expansion Work Subject to $480K Excise Tax, Circuit Court Rules"},"content":{"rendered":"

A federal appellate court ruled last week that the state of South Dakota had the right to apply an excise tax on a nontribal contractor who renovated and expanded a casino for the Flandreau Santee Sioux.<\/p>\n

\"\"
The Royal River Casino VIP room, shown above, was part of the work done by the Henry Carlson Company for the Flandreau Santee Sioux. South Dakota officials levied a 2 percent excise tax on the nontribal construction company for the work, and a federal court ruled in favor of the state collecting the $480,000 in taxes last week. (Image: Henry Carlson Company)<\/figcaption><\/figure>\n

The case stems from the tribe\u2019s 2016 gaming compact with the state. That agreement allowed it to expand its Royal River Casino and Hotel, a class III venue, from 500 slot machines to 1,000. The casino is located in Flandreau, less than eight miles from the Minnesota state line.<\/p>\n

In December of that year, the Henry Carlson Company started its work as the construction manager for the $24 million expansion project, with all the construction work taking place on the reservation.<\/p>\n

However, South Dakota<\/a> officials decided to enforce its 2 percent excise tax on the construction company. Even though the project took place on tribal ground, the state pursued the funding because it did not meet the criteria for an exemption, which is typically granted for a tribal school or government building project.<\/p>\n

After having its appeal denied twice, the company asked the state to refund the tax money to the tribe. When that did not take place, the tribe sued, saying the tax violated the Indian Gaming Regulatory Act (IGRA), among other laws. Among the arguments made was that the casino was a revenue-generating necessity in order to provide for the tribe\u2019s public welfare and safety.<\/p>\n

District Judge Ruled for Tribal ‘Self-Sufficiency’<\/h2>\n

In July 2018, US District Judge Karen E. Schrier ruled the state violated the IGRA<\/a> and that the casino renovation was a necessity.<\/p>\n

\n

“Also, the federal and tribal interest in promoting tribal self-sufficiency through Indian gaming outweigh the State\u2019s interest in raising revenue for the general fund,\u201d Schrier wrote.<\/p>\n<\/div>\n

A month later, South Dakota officials asked the Eighth Circuit Court of Appeals to take up the case.<\/p>\n

Circuit Court: Tax Burden ‘Pales’<\/h2>\n

In a 2-1 decision filed on Friday, the circuit judges ruled that the tribe failed to prove that the excise tax levied on a contractor would impinge on the tribe\u2019s ability to operate a casino. In addition, the state has the right to generate revenue to provide services for its residents and businesses, including the Henry Carlson Company.<\/p>\n

To be sure, revenues from the Casino are of great financial importance to the Tribe,\u201d wrote US Circuit Judge James B. Loken. \u201cIn 2016 and 2017, the Casino enterprise generated roughly 40% of the Tribe\u2019s budget and more than 90% of its yearly sales tax revenue. The burden of the State\u2019s contractor excise tax pales in comparison. The projected total tax that would be paid when the Casino\u2019s renovation is completed is $480,000. While substantial, that is only a small percentage of the gross Casino revenues generated in 2016 and 2017 alone.\u201d<\/p><\/blockquote>\n

In her dissent, Circuit Judge Jane L. Kelly countered that the Flandreau Santee Sioux interest in keeping the $480,000 was more important than South Dakota’s right to generate revenue.<\/p>\n

It is unclear how the tribe will proceed with the case. Tribal officials could not be reached for comment Monday.<\/p>\n","protected":false},"excerpt":{"rendered":"

A federal appellate court ruled last week that the state of South Dakota had the right to apply an excise tax on a nontribal contractor who renovated and expanded a casino for the Flandreau Santee Sioux. The case stems from the tribe\u2019s 2016 gaming compact with the state. That agreement allowed it to expand its […]<\/p>\n","protected":false},"author":45,"featured_media":114517,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[60,18456],"tags":[],"acf":[],"yoast_head":"\nSouth Dakota Tribal Casino Expansion Subject to Tax, Circuit Court Rules<\/title>\n<meta name=\"description\" content=\"The US Eighth Circuit Court of Appeals ruled Friday a nontribal contractor must pay a 2 percent tax on a casino expansion for the Flandreau Santee Sioux\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Dakota Tribal Casino Expansion Subject to Tax, Circuit Court Rules\" \/>\n<meta property=\"og:description\" content=\"The US Eighth Circuit Court of Appeals ruled Friday a nontribal contractor must pay a 2 percent tax on a casino expansion for the Flandreau Santee Sioux\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/south-dakota-tribal-casino-expansion-subject-to-tax-circuit-court-rules\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-10T08:32:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-09-10T21:21:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/09\/Royal-River.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Steve Bittenbender\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta 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