Do Native Americans pay taxes?

Yes. Native Americans pay federal income tax like other citizens. They also pay Social Security, Medicare and sales tax. There are a few small exceptions. One is income from land the federal government holds in trust. Another is state income tax for tribal members who live on their own reservation and earn money there. There’s no free monthly check from Washington. That myth gets repeated more than it gets checked.

1 · MindWhat people believe, and how they know

The Bureau of Indian Affairs answers this one directly: American Indians and Alaska Natives “pay the same taxes as other citizens,” with a short list of exceptions. Federal income tax isn’t charged on income from trust land the U.S. holds for them. States can’t tax income earned on a reservation by tribal members who live there. State sales tax doesn’t apply to tribal members’ purchases on the reservation, and local property tax doesn’t apply to reservation or trust land.

That state rule comes from a Navajo woman in Arizona. In McClanahan v. Arizona State Tax Commission (1973), the U.S. Supreme Court ruled Arizona couldn’t tax the income of a Navajo person living on the reservation whose income came wholly from reservation sources. Exact rules vary by state and situation. Off the reservation, everyone’s taxed the same.

Tribes are governments too, and many collect their own taxes. The Navajo Nation charges a sales tax, a hotel tax, a fuel tax and even a tax on junk food. Everyone who buys there pays it, Native or not.

What each tradition or community says

Federal law

The Bureau of Indian Affairs and the IRS treat Native Americans as citizens who owe federal income tax. Per capita payments from tribal casino profits, where a tribe pays them at all, are taxable income.

Native journalists

ICT News (formerly Indian Country Today) reports that the “Natives don’t pay taxes” myth keeps circulating, along with myths of free housing, health care, education and food. Many treaty promises that do exist are underfunded.

Tribal governments

Tribes have the sovereign power to tax on their own land. Some do, some don’t. The money pays for roads, police, schools and services, the same as anywhere else.

2 · HeartWhat it feels like

For Native neighbors, this question comes up a lot, and it usually isn’t asked kindly. It often arrives with a side of “must be nice.” The real picture is less glamorous. On the Navajo Nation, more than 30% of homes in remote areas lack running water, and about 13 grocery stores serve a land bigger than West Virginia.

For the person asking, you probably heard it from someone who sounded sure. Being sure is free. Being right takes a little reading.

If Native folks really got free money, free college and no taxes, you’d think more of the people repeating that myth would have moved to the rez by now. The waitlist is suspiciously short.Neighbor Radio

3 · HandsHow to be a good neighbor

When the myth comes up at the table, say it calmly: “Actually, they pay federal income tax like the rest of us.” You don’t need a speech. One true sentence does more than ten angry ones.

Then go a step further. Buy from a Native-owned business. Learn which tribal lands you live on. If you’re near the Navajo Nation or Hopi, visit, follow local rules, spend money there and be a good guest.

This weekLook up which tribal nations’ land your town sits on, and learn one thing about them from their own website.

Going deeperA little more, if you want it

The short list of exceptions

The exceptions are real, but they’re narrow. They come from treaties and from tribes being governments, not from a special deal for individuals.

Trust land income. The U.S. holds some land “in trust” for tribes and individual Native people. Federal income tax isn’t charged on income from that land itself, such as grazing or mineral leases.
State income tax. A tribal member who lives on their own tribe’s reservation and earns income there generally doesn’t owe state income tax on it. Live or work off the reservation, and the usual rules come back.
Property tax. Reservation and trust land isn’t subject to local property tax. That also means it can’t easily be sold or mortgaged, which makes it harder to build a house or start a business.

Everything else is ordinary. Paychecks have Social Security and Medicare taken out. Off-reservation purchases carry sales tax. And the IRS expects a return every April, same as for you.

Where the myths come from

Some tribes run successful casinos and share profits with members. Many don’t. Some programs, like the Indian Health Service, exist because treaties traded huge amounts of land for promises of services. Those promises are often underfunded. “Free stuff” is a strange way to describe a payment plan on a continent.

TimelineWhere this fits

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Plain wordsWhat do these words mean?

Reservation: Land set aside for a Native American tribe, where the tribe has its own government.
Sovereignty: The right to govern yourself. Federally recognized tribes are sovereign nations with their own governments.

All the words →

Four questions to take with you

From Jesus' story of the Good Samaritan, about the stranger who stopped to help. We call it the Samaritan Test.

Did they see? Or look right past?
Did they stop? Even when it was inconvenient?
Did it cost them? Time, money, comfort, reputation?
Did they treat the person like a person? Not like a label?

Try it on: the last time you repeated something about a group you’d never checked. Who paid for that rumor? You, or them?

Quick questions

Do Native Americans get free college?

No, not as a rule. Some states and schools offer tuition waivers or in-state rates, usually only for members of federally recognized tribes. Many Native students pay like anyone else.

Do all Native Americans get casino checks?

No. Only some tribes make per capita payments, and many tribes have no casino profits to share. When paid, those checks are taxed.

Do Native Americans pay sales tax?

Off the reservation, yes, like everyone. On it, state sales tax usually doesn’t apply to tribal members, but tribal sales tax often does.

Sources and research

How this answer was made

Written in plain words by the Neighbor Radio team. Each faith's and community's section is checked by someone from that faith or community. Until then, this page says so. Spot something wrong? Tell us. We read every note and fix mistakes.