- Aujalee Moore, April Campbell
- Material Type:
- Lesson, Lesson Plan
- High School
- Creative Commons Attribution Non-Commercial No Derivatives
Mathematics: Tribal Taxes
In this lesson, students will learn essential information about taxes and how they impact enrolled
members of federally recognized Native American Tribes. Many people believe that Native Americans do not pay taxes and therefore should not benefit from federal and state tax-supported programs. This lesson debunks that myth and helps students understand the complex interrelation between state, federal, and Tribal governments and tax systems. Students will also complete a math exercise using piecewise functions to analyze and calculate federal and Oregon state income taxes. The lesson can stand on its own or serve as a complement to or extension of other math lessons.
Mathematics: Tribal Taxes
Background for teachers
Native American Tribes are sovereign powers. Like other sovereign powers within the boundaries of the United States—states and the U.S. government—Tribes need resources to govern and support their members. The U.S. government provides some resources to Tribes through payments and services as required by treaties. The federal and state governments also make funds available through grants and appropriations earmarked for Tribes. Tribes generate additional revenue by establishing profit-making businesses, selling goods and services, and issuing permits and licenses.
Like the other sovereign powers, Tribes can also levy taxes on resources and transactions that fall under their jurisdiction, although their options are comparatively limited. For example, Tribes cannot collect property taxes on reservation land and land held in trust for the Tribes by the U.S. government. Due to the complicated history between the U.S. and state governments and Tribes, Tribal tax policy is driven by court decisions and agreements negotiated between Tribes and the federal government and individual states.
Tribes may or may not choose to levy taxes and set their own criteria for who pays them and when. Tribes in Oregon and across North American have established a variety of tax structures to support their communities. Tribal taxes used in Oregon include lodging taxes; taxes on utility infrastructure and services (water, power, transportation, telecommunications, and waste disposal); and corporate/ business taxes.
There is a common misunderstanding that Native Americans do not pay taxes. Individual Native Americans enrolled in federally recognized Tribes are citizens of the United States, the states they live in, and their Tribes. Like all other U.S. citizens, individual Native Americans must pay federal taxes on their personal incomes. Native American Tribes, however, are tax-exempt entities, and with some exceptions, state and local governments cannot assess taxes on the Tribes, their lands, or transactions that fall under the Tribes’ jurisdiction. Depending on where a Tribal citizen lives (on or off a reservation or other Tribal land), works (for a Tribal or a nontribal employer), and shops (on or off Tribal lands), he or she may or may not also pay county property taxes and state or local income and sales taxes.
Native Americans who live in states (like Oregon) that levy an income tax may be able to exclude some or all of their personal income from state income taxes, but they typically must document that they meet certain requirements to be eligible. In Oregon, for example, Native Americans are required to file an Oregon personal income tax return each year, but may be able to subtract all or part of their income from the calculation of state income taxes owed if they meet all of the following conditions specified by the Oregon Department of Revenue:
- They are enrolled members of a federally recognized Tribe
- They earned their income in Indian country (i.e., on Tribally controlled lands such as reservations)
- They live in federally recognized Indian country
In this lesson, students will learn to use piecewise functions to analyze and represent federal and Oregon income tax rates. They will also calculate Oregon income taxes owed by a fictional Oregon taxpayer who may qualify to exclude some of his income because of the exemption available for Oregon members of federally recognized Tribes.
To prepare for this lesson teachers should:
- Review all materials for this lesson.
- (Optional) Update the federal and Oregon tax rates on the last two slides of the PowerPoint presentation and in the tables in the worksheet answer key, if you’d like the numbers to match any changes in federal and state income tax rates that may have happened since this lesson was written.
- Refresh your knowledge of piecewise functions if it is an unfamiliar application or one that has not been taught for a while. A link to a Khan Academy video (just under four minutes long) and a Desmos lesson that provide instruction on the topic are provided in the “Materials” section above. A second video from Study Force on YouTube (just under five minutes long) provides an example of using piecewise functions to calculate taxes.
- Ensure students will have access to all materials (printed and/or electronic) needed to participate in this lesson (see “Materials” section above).
- Decide how students will work on the application activity worksheet (with you in the classroom, on their own individually or in pairs or groups, or outside of class) and adjust the lesson plan and timing as needed.
- Prepare classroom audiovisual technology to display the PowerPoint slides and videos listed in the “Materials” section