Oklahoma High Court Misfires on State Tax Authority Over Tribes

In Worcester v. Georgia, the US Supreme Court stated that without a treaty or congressional action dictating otherwise, “the laws of Georgia can have no force” within the Cherokee Nation. Around the time of the 1832 decision, the Cherokee and Creek people, among other tribes, were forcibly moved from their ancestral lands to what is now Oklahoma.

Almost two hundred years later, Oklahoma, like many states, continues to press the issue of state authority in Indian country. When confronting the issue in Stroble v. Oklahoma Tax Commission earlier this month, the Oklahoma Supreme Court got it wrong.

The legal doctrines about the scope of state jurisdiction within tribal territories have changed and evolved from the simple rule articulated in Worcester. Though the question of state taxing authority in Indian country is extremely complex, depending on variables such as the political status of the party subject to the tax, there are a couple of bright line rules that are easy to apply.

As a categorical rule, a state may not tax an Indian tribe. Further, a state may not tax the income of an individual member of tribe who lives within Indian country and whose income is derived solely from sources within Indian country.

The US Supreme Court articulated the latter rule in McClanahan v. Arizona State Tax Commission in 1973. The case involved Arizona’s attempt to tax the income of a Navajo Nation member who resided within the Navajo Nation’s territory and earned her income from working for the Navajo Nation.

In Stroble, the Oklahoma Supreme Court considered whether Alicia Stroble—a member of the federally recognized Muscogee (Creek) Nation, whose income solely derives from the Muscogee (Creek) Tribe and who resides within the Muscogee (Creek) Reservation—is subject to state income tax. Based on the facts of Stroble’s case, it’s obvious that McClanahan should apply.

The Oklahoma Supreme Court failed to see the Stroble case for what it is—a relatively simple matter involving application of a categorical rule. In a brief per curiam opinion, six justices agreed on the result that Oklahoma could tax Stroble’s income. Five justices wrote concurrences, revealing that the justices didn’t agree on the rationale for the court’s holding.

The Oklahoma court interpreted McGirt v. Oklahoma, a 2020 US Supreme Court opinion involving the Muscogee (Creek) Nation. McGirt involved the question of whether Oklahoma had criminal jurisdiction over a tribal member within a geographical area the Muscogee (Creek) Tribe claimed was within Indian country, despite the state’s longstanding position that the Creek Nation’s reservation had been legally terminated or disestablished. The US Supreme Court agreed with the tribe that the Muscogee (Creek) Reservation hadn’t been disestablished and remained within the definition of “Indian country.”

The concurrences in Stroble supporting state taxation can be categorized, with my analysis of their merit, as follows.

First and foremost, the concurrences claim McGirt doesn’t apply. They posit that McGirt should be construed narrowly, and that the holding that the Muscogee (Creek) Reservation isn’t disestablished should only apply to criminal cases.
The idea that the Creek Reservation exists for some purposes (to delineate criminal jurisdiction) and not others (taxing authority) is ludicrous—especially given the Oklahoma Tax Commission itself adopted the definition of “Indian country,” from the federal criminal law.

One concurrence attempts to distinguish Stroble’s case from McClanahan on its facts. It focuses on the attributes of the Navajo Nation, a reservation in a geographically remote area where most of the land is owned in trust and the taxpayer over whom the state sought to tax purportedly received less “goods and services” from the state.

The Muscogee (Creek) Reservation is geographically located in the eastern part of Oklahoma, encompassing part of Tulsa. Stroble’s residence with the reservation is on land she owns outright, not trust land.

Another concurrence focused on a more equity-based argument that divesting the state taxation authority would create uncertainty and undermine the state’s ability to raise revenue to provide essential governmental services. A final concurrence addressed the retroactivity of Stroble’s claim for refunds for the 2017–2019 tax years when McGirt was decided in 2020.

Several of the concurrences invite the US Supreme Court to consider the matter.

I disagree with the per curiam and all the concurring opinions. McGirt affirmed that the Muscogee (Creek) Reservation hadn’t been disestablished, despite Oklahoma’s insistence to the contrary. That means Stroble lives within Indian country.

One of the McGirt holding’s implications is that Oklahoma has been asserting jurisdiction in Indian country in ways that are prohibited under federal law. That includes taxing tribal members who reside on the reservation whose income is tribally sourced. That there are geographic differences between the Navajo Nation and Muscogee (Creek) Reservation is irrelevant.

And, while Oklahoma’s loss of ability to tax all the income of Muscogee (Creek) tribal members who reside on the reservation may impact the state’s ability to create revenue for governmental services, such a consequence isn’t a legal justification for state authority within Indian country.

The Oklahoma Supreme Court’s opinion in Stroble raises critical issues. First, post-McGirt, Oklahoma is still struggling to formulate the extent of state civil regulatory jurisdiction in Indian country.

Second, the case reflects the the complexity of the rules governing state taxation in Indian country. Instead of looking at the bright-line, categorical rule from McClanahan in what should have been a simple case, the Oklahoma justices confuse principles and cases that don’t properly apply.

Ideally, Congress would act by prohibiting state taxation in such cases to preserve territorial sovereignty for tribes. Absent that, perhaps the US Supreme Court will consider the Stroble case to help resolve the confusion the Oklahoma Supreme Court appears to have.

The case is Stroble v. Oklahoma Tax Commission, Okla., 120806, decided 7/1/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

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Pippa Browde is a professor at the University of Montana School of Law, where she researches and writes about all things tax in Indian country.

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