Tlingit and Haida sovereignty debate in Haines court, borough admin says no policy change forthcoming

Cathedral peaks over the Chilkat River. (Will Steinfeld / Chilkat Velley News)

By Will Steinfeld

Chilkat Valley News

A small-dollar collections suit has made a Lutak Road property one front in an unresolved, statewide conflict over land sovereignty. And despite losing the lawsuit — in which a tribal government defendant argued the borough’s tax policy ran afoul of federal law — the borough says its stance on the issue remains unchanged.

Last September, the Haines Borough filed suit against the Central Council of Tlingit and Haida Indian Tribes of Alaska seeking unpaid sales tax from a business owned by the tribe. 

The business in question was two short-term rental cabins known as the Gathering Place. A parcel overlooking Lutak Road, the Gathering Place property was originally granted by the federal government in 1981 as a Native allotment to Erma Lawrence, but had since changed hands twice, most recently purchased by the tribe in 2023.

It wasn’t the first time the issue had come up at that property. The tribe has for a number of years argued against the borough’s policy of collecting sales tax from the Gathering Place. The tribe first withheld sales tax collected at the business in 2023. Pointing to a borough exemption from sales tax for foreign, federal, state, and municipal governments, Tlingit and Haida president Chalyee Éesh Richard Peterson advocated that tribal governments be made exempt as well.

In a letter that year to then-Mayor Doug Olerud, Peterson said the tribe would pay the tax in a “good faith” effort to negotiate a more durable change to borough policy. Those changes, however, never came, and last year, borough officials said the tribe had once again collected tax at the business but had stopped remitting it to the borough. In September, after months of tax delinquency notices, the borough filed the small claims suit.

Filing suit was standard borough procedure, written into code, for collecting delinquent tax. The amount in question, $7,500, was relatively small — small enough to be heard in small claims court, the lowest level of the state’s court system. Even after meeting with leadership from the tribe, borough staff said they saw no reason why the tribe should be exempt from that process, or from paying sales tax.

“We are just asking them for delinquent sales tax that they owe to the borough,” borough sales tax administrator Jessie Badger said at the time. “We’re not taxing them, we’re taxing their patrons.”

According to those who have presided over it, Haines’ small claims court is a relatively informal setting, in which the local magistrate has the latitude to hash out disputes — often over issues like dog custody — bringing conflicting parties toward some kind of compromise. Generally, there aren’t lawyers involved or strict courtroom procedures to be followed. But when the tribe filed its response to the suit with Haines magistrate Paul Korchin, it came as a multi-page filing written by the tribe’s attorney, Agatha Erickson.

New legal arguments 

For months prior, the conversation had centered on a decision to be made by the borough: whether it should exempt the tribe from paying sales tax. Even after communications back and forth with Tlingit and Haida officials, Haines Borough officials had used policy toward nonprofits as a reference for whether the tribe would be exempt.

“There is really no reason Tlingit and Haida is not paying taxes on their vacation rental,” borough manager Alekka Fullerton said at the time. “It has nothing to do with their mission. On the other hand, if it was something that was directly related to their mission, maybe they wouldn’t have to pay sales tax.”

But the main argument in that filing was not about the borough’s decision to grant or deny an exemption. Instead, the tribe argued, the borough had no authority to collect tax in the first place. Because of the parcel’s status as a Native allotment, the tribe argued that it — and not the borough — held regulatory power over the land.

“It is well established under federal Indian law that, absent clear congressional authorization, a state or locality may not levy a tax directly on a Tribe or its citizens for activities that occur within Indian Country, including Alaska Native Allotments,” Erickson’s filing read. In a footnote, Erickson cited a 1995 Supreme Court case, Oklahoma Tax Commission v. Chickasaw Nation.

The filing also argued the borough was not permitted to sue Tlingit & Haida in the first place due to the tribe’s immunity from suit as a sovereign government, a status that can be waived only by Congress or the tribe itself.

Ultimately, neither of the tribe’s arguments was ever really tested in the local courthouse. About eight months ago, just after the new year, the case petered out to an anticlimactic end. The borough lost the case, but largely because staff forgot to file a response to the court.

The borough “did not intend to not respond,” borough manager Alekka Fullerton said last month.

Nevertheless, without any argument from the borough in the record, the tribe’s arguments were the only ones for the magistrate to consider. In the resulting one-sided proceeding, Korchin came down in favor of the tribe.

The issue has been quiet since, and the Gathering Place didn’t operate as a rental this summer. Even so, the issue of whose land it is to tax, regulate, and otherwise govern continues to loom.

Despite losing the case, the borough has not changed its policy regarding sales tax on allotment land, Fullerton said last month. If the Gathering Place resumes commercial operations in the future, the borough will attempt once more to collect sales tax.

That stance doesn’t have to do with land sovereignty, the borough argues.  

“I think it is really important to keep property tax versus sales tax straight,” Fullerton wrote in an email this summer. “The Gathering Place on Native allotment, we recognize this is a Native allotment, therefore there is no property tax.  The Native allotment status, however, does not mean commercial activity taking place on the land is exempt from sales tax since the users who pay the sales tax are not tax exempt.”

But the question remains of how the borough will, in the future, respond to arguments about broader regulatory jurisdiction over allotment land. 

That possible collision course is not unique to Haines, and neither is the tribe’s argument about jurisdiction over allotment land.

The Lawrence allotment, where the Gathering Place is located, is 160 acres of an estimated 3 to 5 million acres of land in Alaska granted to individuals under the Alaska Native Allotment Act of 1906. Even though a century has passed since such allotments were first granted, it remains an open question who exercises the right to regulate and govern them.

For instance, while Tlingit and Haida argued in the Haines case that it holds the power to tax allotment land, the State of Alaska and the Trump administration disagree.

Both hold that allotments like the Lawrence allotment on Lutak Road are firmly within the governing authority of state and municipal governments, citing a 1993 opinion from the federal Department of the Interior that was, for much of the last 30 years, the federal government’s position on allotment jurisdiction.

The opinion says that in federal Indian law, so-called “Indian Country” has generally been the jurisdictional boundary line, with tribes holding power within Indian Country and states holding power without. Federal statute specifically names allotments as one category of Indian Country.

But in the opinion, Interior solicitor Thomas Sansonetti argued Alaska was an exception: that Alaska Native allotments were created in a substantively different context from allotments in the continental United States, and thus did not confer to tribes the same sovereignty over allotment land.

“Particularly in the absence of a tribal territorial base (e.g. a reservation), there is little or no basis for an Alaska village claiming territorial jurisdiction over an Alaska Native allotment,” he wrote.

The Alaska Department of Law last year, in a press release, called federal government efforts to roll back that opinion “unlawful.” 

The release quoted then Attorney General and current gubernatorial candidate Treg Tayor as saying, “we are asking a court to reaffirm what it has already said—the State maintains primary jurisdiction over Alaska Native Allotments.” 

Uncertain lines of debate

The state and federal governments are currently aligned in their support of that 1993 opinion, but that hasn’t always been the case. The federal government’s position has been set by Department of the Interior administrative policy, not federal statute. As such, the federal government has alternately affirmed, contradicted, and reaffirmed the state’s position with successive presidential administrations.

“We struggle here in Alaska in that we have a lack of case law,” said University of Alaska Fairbanks tribal law expert Kevin Illingworth earlier this summer, explaining why so much of the allotment sovereignty debate is left to administrative policy. “What guidance we get from outside of the courts, either the Department of Law or the federal Attorney General’s office, has been completely partisan and easily predictable just based on who is pulling their strings.”

The borough’s involvement in the debate is just one in a number of cases litigating the issue, some nearby.

In 2021, Tlingit and Haida butted heads with the City and Borough of Juneau after the municipality tried to regulate the tribe’s fireworks sales at a Douglas Island allotment. In that instance, the tribe similarly asserted its regulatory authority over the allotment.

When a Juneau assembly member argued that there was no tribal land in Juneau, Peterson called it “about the most irresponsible and incorrect statement I’ve heard,” KTOO’s Jeremy Hsieh reported at the time. “It’s offensive. We’re selling fireworks on an Indian allotment. That is restricted land, that is Indian land.”

This year, at the same location, the tribe opened the Two Coppers Casino, which it says it has the right to operate due to the land’s status as an allotment, giving it sovereign jurisdiction. That position was backed by the National Indian Gaming Commission a year and a half ago, after the Biden administration reversed federal policy and supported tribal sovereignty over Alaska Native allotments.

In a letter delivering the gaming commission’s decision, associate commissioner Sharon Avery wrote that “tribes in Alaska are presumed to have jurisdiction over Native allotments, subject only to the two exceptions identified by the Department for off-reservation allotments: (1) when the Native Allotment is owned by a non-tribal member; or (2) when the Native Allotment is geographically removed from the tribal community.”

Avery’s argument was based on Biden-era federal allotment policy. Now that the Trump administration has reinstated the federal government’s previous position, the casino once again appears to challenge federal policy. While that Douglas Island casino is currently operating without any legal contest, the state is actively pursuing a similar case,  a casino on allotment land owned by the Native Village of Eklutna.

Other Tlingit and Haida efforts to exert sovereignty over tribal land have drawn legal challenges. In 2023, the State of Alaska sued the Biden administration over its decision to declare a Tlingit and Haida parcel in downtown Juneau as reservation land.

A history of litigation

Litigation, or the possibility of litigation, is often a “last resort” for Alaska tribal governments due to cost, Illingworth said. But Tlingit and Haida exists in a slightly different context from most tribes.

Unlike tribal governments like the Chilkoot Indian Association and Chilkat Indian Village, which were organized in the 1940s under the Indian Reorganization Act, Tlingit and Haida was formed specifically out of landmark litigation.

In 1935, the federal government passed a law allowing “Tlingit and Haida Indians,” as defined by the bill, to sue for compensation for land taken by the federal government. The law was in response to land claims officially initiated at a key Alaska Native Brotherhood convention in Haines.

The group filed suit in 1947 and, after nearly 20 years of litigation, won $7.5 million in compensation for land, including the Tongass National Forest and what was then Glacier Bay National Monument.

Following that ruling, the Central Council of Tlingit & Haida was given the authority to spend the money awarded. That has given the tribe “both money and a history of litigation,” Illingworth said — a contrast to elsewhere in the state, where funding streams have largely been directed toward Alaska Native corporations rather than tribal governments following the Alaska Native Claims Settlement Act, or ANCSA.

Tlingit and Haida President Chalyee Éesh Richard Peterson initially agreed to discuss the Haines Gathering Place lawsuit, but Peterson and spokespeople for the tribe did not respond to several weeks of requests for an interview and questions about the Haines case and allotment jurisdiction more broadly. The state’s Department of Law said it would not comment specifically on Haines’ small claims suit against the tribe.

For now, the Eklutna case continues to work its way through the courts, and Haines’ tax dispute remains dormant. Allotment policy also may hinge on an imminent new governor and new president in two years time; though now dropped out of the race, former gubernatorial frontrunner Tom Begich said in a July interview with the Chilkat Valley News that as governor, he had planned to call for a “near reversal” of the state’s current position on sovereignty over allotment lands. 

• This story originally appeared in the Chilkat Valley News.