New Mexico's Native Vets Tax Settlement Fund - BUT Only in New Mexico
SANTA FE, NM—The New Mexico Department of Veterans’ Services (NMDVS), the New Mexico Department of Taxation and Revenue department and the New Mexico Department of Indian Affairs have teamed up to launch the Native American Veterans’ Income Tax Settlement Fund.
This fund was created by the State of New Mexico to address the issue that state income tax may have been withheld from the paychecks of Native American soldiers while they were on active duty and legally domiciled on tribal land.
Claim forms can be found on the NMDVS website or can be picked up at selected NMDVS field offices. Visit the NMDVS website at http://www.dvs.state.nm.us/. On the home page, click on the Native American Veterans’ Income Tax Settlement link on the left-hand side.
A copy of a separation document (DD-214 or similar document from the Department of Defense) must also be attached to the completed claim form, which can then be sent to the New Mexico Department of Veterans’ Services.
The NMDVS will then verify if a form is accompanied by the separation document, and then send everything to the Department of Taxation and Revenue for processing and ultimate payment of refunds.
“The state of New Mexico wants to correct something that may need correcting for some of our Native American veterans,” said NMDVS Secretary John Garcia. “We will help any veteran who had any state income tax withheld while they were on active-duty but exempt from this because they were living on tribal land.”
According to the findings by the NMDVS, there may be more than 9,000 Native American veterans who may have had New Mexico income tax withheld from their military pay while they were living on tribal land here in New Mexico. Widows can also apply on behalf of their deceased veteran-spouse.
“The only way we can verify if a veteran did indeed have their military salary taxed by the state of New Mexico is for that Native American veteran or dependent to fill out a claim,” said Secretary Garcia. “If you can’t find your separation papers, we will help you request a duplicate copy. But we can’t help you if you don’t first fill out that claim form.”
Claim forms along with an attached DD-214 or other separation papers can be mailed to:
The New Mexico Department of Veterans’ Services
Alan Martinez/Deputy Secretary
PO Box 2324
Santa Fe, NM 87504-2324b
Pottawatomi Vet: Soldiers Wrongly Taxed
By JoKAY DOWELL
TAHLEQUAH, Okla. – While browsing the Internet, Prairie Band Pottawatomi tribal citizen and U.S. Army veteran Richard Adame was surprised to find a news article about New Mexico legislation and subsequent negotiations with American Indian veterans in that state to restore state taxes wrongly deducted from their pay by the Department of Defense.
“This story concerns all Native Americans who ever served in the U.S. Armed Forces. We were unjustly and illegally taxed by our individual states while serving in uniform,” Richard Adame said.
Adame immediately began to search for information on the law and contacted national media outlets, some veteran’s representatives and politicians. Adame said with the exception of Native American Times he was ignored because, he thinks, the law protecting American Indian military pay is virtually unknown by all.
“Two years after I retired, I found out that I and every other Native American who claimed the reservation as our homes were illegally taxed. But, no one seems to know. . . I contacted a few vet reps and they never heard of this. This injustice was not even known to us ground pounders. We were just doing our jobs. How were we supposed to know that we were being illegally taxed?” he said. “I grew up in Kansas on the reservation and joined the Army out of a sense of patriotism and pride in my country. Most of the men and women in my family served in the Armed Forces.
Deduction of state income taxes from the pay of American Indian veterans living on reservation land at the time of their entrance into active duty service was first prohibited by federal law under the Soldiers and Sailors Civil Relief Act of 1940, Section 514, and continued under the newer version of the law, the Service members Civil Relief Act of 2006, section 511e. Other laws and legal opinions uphold the protection of that pay.
But according to language in HR 5275 introduced to the United States 108th Congress in October 2004 by New Mexico Democratic Senator Tom Udall, the DoD withheld state income taxes anyway. HR 5275 intended to restore the pay of all American Indian veterans across the country from whose pay state taxes were wrongly deducted.
“The law is now well established that this policy was wrong and, in keeping with tribal sovereignty, the policy of withholding state taxes on these soldiers’ pay was changed. This position is reflected in administrative opinions, Fatt v. Utah, 884P2d 1233 (Utah 1994), a 2000 Department of Justice opinion, a Department of Defense policy instituted in 2001, and most recently, in Public Law 108-189, a law that passed this House unanimously,” Udall said in his introduction of HR 5275 to the House Armed Services Committee.
While the DoD stopped the improper taxation of those veterans in 2001, the changes did not apply retroactively for veterans whose pay was taxed prior to that year. A statute of limitations could present obstacles as well.
“The result is that hundreds, perhaps thousands, of tribal members whose state taxes were improperly withheld during their service to our country are unable to recover the money that is owed to them,” Udall stated.
Sadly, HR 5275 faced immediate death in the 108th HASC for lack of support. Since then, no action has been taken to restore the pay of reservation-based American Indian veterans outside of New Mexico.
Adame has questioned whether restoration of the veterans’ pay might be settled legally with a class action lawsuit but would rather see Congress step up to reintroduce legislation like HR 5275 and bring justice to all American Indian veterans.
“This story concerns all Native Americans who ever served in the U.S. Armed Forces,” he said. “We were unjustly and illegally taxed by our individual states while serving in uniform.”
In Oklahoma, the topic of taxation of American Indians has always been controversial but was settled unanimously by the U.S Supreme Court in the 1993 case, “Oklahoma Tax Commission v. Sac and Fox,” filed by attorney William Rice, associate professor of law and co-director of the Native American Law Center, University of Tulsa College of Law.
“The state lost,” Rice said. “How the veterans’ case would play out is arguable. But obviously Oklahoma has no authority to levy the tax in the first place and the SSCRA should protect them in the second.”
Rice said the Court generally has ruled that the Constitution and federal law place the tribal relationship with the federal government and not states, at least in areas defined as Indian Country, a legal term applying to allotments, tribal lands, reservations and other categories of Indian-owned properties.
Oklahoma Tax Commission law now states active duty pay is exempt when:
“The income is compensation paid to an active member of the Armed Forces of the United States, if the member was residing within his tribe’s “Indian Country” at the time of entering the Armed Forces of the United States, and the member has not elected to abandon such residence.”
Rice thinks there would be even more affected veterans in Oklahoma than in New Mexico.
“I suggest many of them would be residents of Indian Country when they joined up,” he said.
Adame wants his pay and that of all other American Indian veterans restored and is hoping affected veterans will contact tribal, regional and national veterans’ organizations to make them aware of the law. He said veterans should also contact their Congressional representatives to request they reintroduce and support legislation like HR 5275. He also posted online a petition to restore the veterans’ pay..
Adame hopes the new Obama administration will walk its talk as it promised to respect Indian sovereignty and honor tribal nations’ government-to-government relationship.
First Lady Michelle Obama told employees at the Interior Department in February that American Indians have a “wonderful partner in the White House right now,” and her husband plans to improve that relationship even more, according to an Associated Press story.
Adame wants American Indians in political office to help rectify the wrongs against him and other veterans.
“These newly appointed government Native American politicians and advocates must also stand up for us, the cheated veterans.”
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