THE OKLAHOMA BAR JOURNAL 36 | AUGUST 2026 LEGAL FRAMEWORK Federal Indian law has long enforced a “neutral zone” between state and tribal authority, particularly when it comes to taxation. The seminal case, McClanahan v. Arizona State Tax Commission,8 established the categorical rule that states cannot tax the income of tribal citizens who live and work in Indian country unless Congress clearly authorizes it. And in 1993, the U.S. Supreme Court adhered to this “per se” tax rule, sanctioning the OTC in Oklahoma Tax Commission v. Sac and Fox Nation.9 In McGirt the U.S. Supreme Court reiterated that the Muscogee (Creek) Reservation was never disestablished. This was a win for tribal sovereignty, when the U.S. Supreme Court clearly reaffirmed the reservation’s boundaries: the entire Creek Reservation is “Indian country” under federal law. And after McGirt, under the established law of McClanahan, one would have thought that the state clearly could not tax the income of tribal citizens like Ms. Stroble, who live and work in the Creek Reservation. But the OTC responded that McGirt only applied to criminal law. The Oklahoma Administrative Code requires tribal members to both live and work in “Indian country” to qualify for the tax exemption.10 Here, the OTC asserted Ms. Stroble’s residence was inside the reservation for criminal law purposes, but on private fee land, and thus not in “Indian country” for purposes of the tribal income tax exemption. Ms. Stroble maintained that interpretation misreads the rules. Federal law, particularly 18 U.S.C. §1151(a), defines “Indian country” to include all land within “reservation” boundaries, regardless of ownership type. ARGUMENTS AND REASONING Ms. Stroble’s argument was straightforward: she lives and works within the reservation. She relied on McGirt and federal tax immunity precedent to argue the OTC’s residency requirement is too narrow and conflicts with controlling federal law. The OTC insisted that the relevant information for state income tax exemption purposes is the title ownership status of her residence: Whether her residence is in a tribal land trust or in private fee ownership determines if it is “Indian country.” Ms. Stroble contended that OTC interpretation was a misapplication of both federal precedent and 18 U.S.C. §1151, the federal criminal statute the OTC relied on when it promulgated its definition of “Indian country.”11 In her view, nothing in the exemption was reliant on the type of land ownership. The ALJ agreed with Ms. Stroble. He found that Ms. Stroble earned her income entirely in Indian country, and that her residence, though on fee land, was within the reservation. The OTC, however, disagreed. Ms. Stroble appealed in 2022. After deliberating for nearly three years, the Oklahoma Supreme Court effectively limited the scope of McGirt, ruling that its holding did not extend to civil matters like taxation.12 The court, in a short 6-3 per curiam ruling, affirmed the OTC order denying Ms. Stroble’s exemption. The deeply divided justices also issued five separately written concurring opinions and one dissenting opinion. The slip opinions together ran 120 pages. The per curium order effectively sent the ball to the U.S. Supreme Court as the Oklahoma Supreme Court majority was not ready to make a sweeping civil decision: The United States Supreme Court’s declaration – 113 years after statehood – that nearly half of Oklahoma is a reservation is unprecedented. To date, the United States Supreme Court has not extended its ruling in McGirt beyond the Major Crimes Act. To date, the United States Supreme Court has not extended its ruling in McGirt to the State’s civil or taxing jurisdiction. And it is not this Court’s place to do so.13 Chief Justice Rowe concurred with the majority, stating that the court should not expand McGirt’s holding to civil regulatory law, including taxation. He acknowledged that the OTC had incorporated the Major Crimes Act’s definition of “Indian country” into its regulation and emphasized that the OTC has the authority to promulgate rules that have the force of law unless amended or revised. But he suggested that Ms. Stroble’s appeal sought to apply McGirt retroactively, to tax returns from 2017-2019, which he said could not be done.14 Vice-Chief Justice Kuehn concurred specially, acknowledging the McGirt ruling regarding reservation status but stating that it does not resolve the issue of whether the state can impose income taxes on a tribal citizen living and working on the tribe’s reservation. She also suggested that the court should not apply McGirt to civil tax issues, as federal Indian law regarding civil taxation is less clear-cut than criminal jurisdiction.15 Justice Winchester concurred, discussing the practical implications of extending McGirt to civil matters, Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.
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