A recent U.S. Supreme Court decision will save Utah $125 million by blocking two lawsuits challenging the state's authority to tax oil and gas production on Indian reservations, Utah Attorney General Paul Van Dam said Friday.
The high court ruled Tuesday in Cotton Petroleum Corp. vs. New Mexico that New Mexico could tax oil, gas and mineral production on Indian lands on top of taxes already levied by Indian governments.Utah, which faces two lawsuits challenging its authority to tax oil and gas production on Indian lands, filed a friend of the court brief in the case, arguing states can tax even if a producer is already taxed by the tribe.
The court ruled states can impose a non-discriminatory tax on Indian lands unless pre-empted by Congress and said severance taxes imposed by the state and tribe don't amount to double taxation.
The decision could have a bearing on the outcome of the two cases filed against the state that hold $125 million in the balance, Van Dam told reporters.
Several private oil companies producing oil in Utah on the Navajo Indian Reservation are suing the state, saying the state's mineral tax on top of the Navajo fee is illegal and demanding a $100 million refund.
Additionally, the Ute Tribe is suing the state in federal district court in a case challenging the state's right to impose an oil and gas production tax on their land. The Utes are demanding a $25 million refund.
The court ruling "puts those cases to rest so that Utah will not have to stand that negative financial impact," Van Dam said.
"I look forward to resolving two pending cases in the near future," he added.
Van Dam called the press conference Friday to discuss the Cotton Petroleum decision released Tuesday and other issues with reporters, saying he was unable to do so earlier.
"This has been an emotional, tough week with my friend John Clark's tragedy," Van Dam said. Clark's five-year-old son, Peter Elliot Clark, and visitor Heather Sheehan, 14, were killed in a house fire April 21.