High court: Tribe can't expand tax-exempt holdings by buying land

WASHINGTON - Indian tribes can't expand their tax-exempt holdings by buying up property that has been outside their reservations for generations, the U.S. Supreme Court ruled Tuesday.

The 8-1 decision found that New York's Oneida Indian Nation may not upend 190 years of local development and regulation by reverting recently acquired land to tax-exempt status.

The opinion is a victory for the small city of Sherrill, N.Y., which has been locked in a long-running fight with the Oneidas over unpaid taxes on a gas station, convenience store and defunct T-shirt factory.

The Oneidas claimed that because the Sherrill properties, 30 miles east of Syracuse, N.Y., were once part of a 300,000-acre stretch of their land, they were no longer taxable by state and local officials after the tribe bought them in 1997.

The Supreme Court disagreed, saying too much time had passed for the Oneidas to now claim tribal sovereignty and that such a move would create a "disruptive" patchwork of local and Indian jurisdiction.

The justices also noted the "longstanding, distinctly non-Indian character of the area and its inhabitants." Most of the Oneidas left the area in the mid-1800s.

"The Oneidas long ago relinquished the reins of government and cannot regain them through open-market purchases from current titleholders," Justice Ruth Bader Ginsberg wrote in the ruling, which overturned an appeals court decision in favor of the Oneidas.

Justice John Paul Stevens was the lone dissenter. He argued the decision "is at war with at least two bedrock principles of Indian law: "that only Congress can reduce a tribe's reservation and change a reservation's tax status."

He also chided fellow jurists for worrying too much about the possible implications of allowing tribes to expand reservations by reacquiring historic land.

"The majority's fear of opening a Pandora's box of tribal powers is greatly exaggerated," Stevens wrote.

The case is City of Sherrill v. Oneida Indian Nation of New York, 03-855