Budget & Tax, Law & Principles

Oklahoma Supreme Court rejects tribal income tax exemption in wake of McGirt

July 7, 2025

Ray Carter

So long as the State of Oklahoma imposes a tax on income, all Oklahomans must pay it, according to a new ruling from the Oklahoma Supreme Court.

A lawsuit filed by Alicia Stroble argued that all American Indians living on land affected by the U.S. Supreme Court’s 2020 ruling in McGirt v. Oklahoma are exempt from paying state income tax—even if they live on privately owned land purchased from non-Indian owners.

The McGirt decision declared the Muscogee (Creek) Nation’s pre-statehood reservation—an area that includes much of Tulsa—was never formally disestablished for purposes of the federal Major Crimes Act. That decision has since been expanded to include the pre-statehood reservations of the Choctaw, Chickasaw, Cherokee, Seminole, and Quapaw tribes, covering nearly half of Oklahoma.

“Stroble is asking this Court to extend McGirt to civil and regulatory law—to find the State is without jurisdiction to tax the income of a tribal member living and working on the tribe's reservation. This we cannot do,” the majority opinion issued by the Oklahoma Supreme Court stated. “The United States Supreme Court expressly limited McGirt to the narrow issue of criminal jurisdiction under the Major Crimes Act.”

Had the Oklahoma Supreme Court ruled in Stroble’s favor, all people of American Indian descent living on land covering 42 percent of Oklahoma would have potentially been exempt from paying state income tax even though the state continues to maintain roads, schools, and public safety services in those areas that benefit tribal and non-tribal members alike.

Stroble’s argument received support from the Muscogee (Creek) Nation, Seminole Nation of Oklahoma, Cherokee Nation, Chickasaw Nation, and Choctaw Nation of Oklahoma, which filed briefs in the case.

The 6-3 decision was a per curiam opinion, meaning there was no individual author. However, several justices wrote concurring opinions that further discussed their reasoning.

The concurring opinions cited a range of other U.S. Supreme Court rulings, including the court’s 2022 ruling in Oklahoma v. Victor Manuel Castro-Huerta, which held that Oklahoma retained the authority to arrest and prosecute non-Indian criminals who victimize Indians living on tribal reservation land.

“This Court has long held that Indian country is part of a State, not separate from it,” the U.S. Supreme Court majority opinion in Oklahoma v. Victor Manuel Castro-Huerta stated. “Under the Constitution, States have jurisdiction to prosecute crimes within their territory except when preempted by federal law or by principles of tribal self-government. The default is that States have criminal jurisdiction in Indian country unless that jurisdiction is preempted. And that jurisdiction has not been preempted here.”

In a concurrence joined by Justice Travis Jett, Justice John Kane IV wrote that the U.S. Supreme Court’s Castro-Huerta decision indicated the state of Oklahoma retains its taxing authority in the “reservation” areas established by the McGirt ruling because the state’s jurisdiction has not been negated by federal law.

“Stroble has not identified a treaty or federal statute that preempts Oklahoma’s taxing authority,” Kane wrote, later adding that under the Castro decision “the default is the State has jurisdiction unless that jurisdiction is preempted” (emphasis in original).

In his concurring opinion, Justice Richard Darby wrote that there are significant differences between Stroble’s case and cases in other states where the U.S. Supreme Court held that a state did not have taxing authority.

For example, a U.S. Supreme Court case that centered on Arizona’s ability to tax Indians differed from Oklahoma’s because “Congress had left the Indians on the Navajo Reservation largely free to run the reservation and its affairs without state control for nearly a century.”

“Arizona had been left with no duties or responsibilities respecting the reservation or the Indians residing thereon, whether in terms of providing roads, schools, or other needed services,” Darby wrote. “ … Contrarily, here, the Creek Reservation has not been left alone, free from state control—just the opposite. Oklahoma maintains the duty to provide roads, schools, and needed services for the entirety of the state and has done so, including where Ms. Stroble resided during the years for which she claims an exemption. The Creek Reservation found in McGirt for purposes of criminal law is not Indian Country for tax purposes.”

In his concurring opinion, Justice James Winchester noted that 11,500 tribal citizens have requested an exemption from Oklahoma state income taxes since the McGirt ruling.

“The State of Oklahoma has had the responsibility to provide governmental services to all residents in eastern Oklahoma—tribal and non-tribal members,” Winchester wrote. “Stroble receives these services, the same as her non-tribal member neighbors. Today’s decision provides some clarity regarding the services the State offers and how the State, counties, and cities share fiscal and management responsibilities for their citizens. To rule otherwise would allow those members of the Muscogee (Creek) Nation (and others similarly situated) who live on unrestricted fee land to be exempt from taxation, creating a checkerboard of jurisdiction, alternating state and tribal jurisdiction, encumbering the State and local governments, and having a detrimental effect on landowners neighboring the tribal property.”

It’s estimated a McGirt tribal exclusion could result in the loss of $75 million in state revenue each year.

Had the Oklahoma Supreme Court not sided with the State and instead allowed Indians to be declared exempt from payment of income taxes, policymakers have openly discussed a significant overhaul of the state’s tax system.

In 2023, then-House Speaker Charles McCall, R-Atoka, said that if the court ruled Indians in eastern Oklahoma were no longer subject to paying state income taxes, he supported elimination of the income tax for all Oklahomans, saying, “We’re either all going to pay or none of us are going to pay.”

The Stroble ruling is just the latest in which courts have sided with the state in cases involving efforts to reduce state government authority on land lying within the pre-statehood reservations of certain tribes.

The Oklahoma Court of Criminal Appeals has held that cities and the state maintain jurisdiction over non-member Indians on land within the historic boundaries of a tribe’s reservation. In City of Tulsa v. O’Brien in 2024, the Oklahoma Court of Criminal Appeals held that Tulsa police could issue a traffic ticket to an Osage citizen who was speeding on land that was part of the Muscogee (Creek) Nation’s pre-statehood reservation.

Gov. Kevin Stitt, a Cherokee who nonetheless opposes efforts to exempt tribal citizens from state taxes, welcomed news of the Oklahoma Supreme Court’s ruling in the Stroble case.

“This is a big win for the future of Oklahoma. From day one, I’ve fought to make sure every Oklahoman is treated equally,” Stitt said. “Tribal governments, liberal groups, and some elected officials have pushed for special tax exemptions that would create a two-tiered system—one set of rules for tribal citizens and another for everyone else. That’s wrong. It would divide our state and weaken the public services every family relies on.

“This ruling makes it clear that attempts to expand McGirt into civil and tax matters have no basis in the law,” Stitt continued. “We are one Oklahoma. And as long as I’m governor, we aren’t going backward.”

In a statement, Muscogee Nation Principal Chief David W. Hill said tribal leaders were “disappointed” in the Oklahoma Supreme Court’s ruling in the Stroble case.

“We know that this ruling could have broad implications for Indian Country, so we are carefully reviewing the decision with our legal team and preparing for the next steps,” Hill said. “While it is important to remember that the Muscogee Nation cannot provide legal advice on individual tax cases to citizens, the Nation will remain diligent in coordination and communication of what our response will be.”