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TALLAHASSEE (CBSMiami/NEWS SERVICE OF FLORIDA) – An appeals court ruled that gambling revenues distributed to members of the Miccosukee Tribe of Indians of Florida are subject to federal taxes.

The case involved money that the tribe distributes on a per-capita basis to members from its South Florida gambling facility.

In 2004, the federal government assessed taxes, penalties and interest against tribe member Sally Jim because of failure to pay federal taxes in 2001 on the distributions, according to the ruling by a panel of the 11th U.S. Circuit Court of Appeals. That led to a legal fight that centered, at least in part, on whether a 1988 law known as the Indian Gaming Revenue Act required payment of taxes or whether the distributions were exempt under what is known as the Tribal General Welfare Exclusion Act.

A district judge ruled that the distributions should be subject to taxes, and the appeals court agreed Monday. “In this appeal, the member and the tribe contend that the district court erred in concluding that the exemption for Indian general welfare benefits did not apply to the distributions,” said the 21-page ruling, written by appeals-court Judge Gerald Tjoflat and joined by judges Adalberto Jordan and John E. Steele.

“The tribe alone asserts that the district court erroneously upheld tax penalties against the member and incorrectly attributed to the member the distributions of her husband and daughters. Lastly, the tribe argues that the district court erred by entering judgment against it as an intervenor. We affirm the ruling of the district court in each of these matters. The distribution payments cannot qualify as Indian general welfare benefits under GWEA (the Tribal General Welfare Exclusion Act) because Congress specifically subjected such distributions to federal taxation in IGRA (the Indian Gaming Revenue Act).”

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