Tax on restricted property disputed in court

Tax on restricted property disputed in court
(Angel Ellis/Reporter) Taxes collected for the sale of goods at the Cox Cash Saver store in Okmulgee were the topic of an interpleader case filed with Okmulgee Co. District Court. On Jan. 17, Okmulgee County District Court Judge Ken Adair determined that he did not have authority or jurisdiction over the matter.

Angel Ellis/Reporter

Jurisdiction and authority were the basis for case dismissal

OKMUGLEE, OK — Various parties representing the Muscogee (Creek) Nation, Warehouse Market, The State of Oklahoma Tax Commission and Pinnacle Management & Consulting LLC., were present for a hearing in Okmulgee County District Court Judge Ken Adair’s chambers on Jan. 17, to hear the court’s eventual decision to quash the part of the lawsuit against MCN.

The court did accept monies interplead to it by Warehouse Market. The Oklahoma Tax Commission notified the court of its intent to claim those funds. However, the part of the case which the company asked for the court to initiate a lawsuit in order to compel two or more other parties to litigate a dispute was dismissed.

The suit began at the request of Plaintiff Warehouse Market, Inc., dba Cox Cash Saver at 1701 Wood Dr. in Okmulgee, filed for interpleader and application for temporary restraining order and injunctive relief stating, ‘A dispute has arisen between the Oklahoma Tax Commission and the Muscogee (Creek) Nation’s Office of the Tax Commission over which entity is entitled to sales tax collected for items sold at Warehouse Market’s Okmulgee grocery store.’

According to Legaldictionary.com, an interpleader is ‘civil procedure that allows a plaintiff or a defendant to initiate a lawsuit in order to compel two or more other parties to litigate a dispute. An interpleader action originates when the plaintiff holds property on behalf of another, but does not know to whom the property should be transferred.’

The authority and jurisdiction of the court was the reason stated by Judge Adair’s decision to quash the part of the suit seeking an interpleader and a temporary restraining order against the MCN.

“I don’t have the authority to decide if the Muscogee (Creek) Nation has the right to collect solely or in addition to the State Tax Commission,” Judge Adair said.

According to the interpleader filed, ‘Warehouse Market stands ready to remit the required amount of sales tax to the proper entity and seeks an order from this Court (Okmulgee County District Court) allowing it to interplead those funds to the Court Clerk until the issue is resolved.’

Court exhibits showed a letter to Pinnacle Management & Consulting LLC., the lessor of the property at which Cox Cash Saver operates, advising the company, ‘any retail sales located on the subject property concerning this lease will be required to pay 6% sale tax to the Muscogee (Creek) Nation Tax Commission. There is no obligation to pay taxes to any city, county or state agencies as the Muscogee (Creek) Tax Commission is the only authorized taxation agency allowed to assess or collect taxes on restricted land.’

The letter was dated Sept. 6, 2018, and instructed Pinnacle to notify their tenants ‘immediately of this transition.’

The state commission then contacted the company in Nov. 2018, after Warehouse Market notified the state they would be making their tax payments to MCN.

According to a letter from the OTC in the court documents, Warehouse Market advised a representative of the Oklahoma Tax Commission that it had stopped collecting state and local sales tax on sales made at the Cox Cash Saver Store in mid-October 2018.

In October, the business did not send the 10.083 % taxes to the state but paid 6% of the 10.083% sales tax to MCN. The company also advised the OTC that October 2018 would be their last sales tax payment to the state.

In that same letter OTC states, ‘Vendors are required to collect the full amount of the sales tax levied and remit the tax collected to the Oklahoma Tax Commission. A failure to comply with these provisions will result in the closure of the business and or revocation of the vendor’s sales tax permit.’

Following the OTC notification, Warehouse Market received a Notice of Violation from the MCN Tax Commission stating the company violated tribal tax code. The company was given ten days to remit tribal sales tax payment.

On Jan. 15, MCN Tax Commission filed a motion with the court asking for the court to dismiss the interpleader for lack of jurisdiction of the subject matter.

While OTC has stated its claim upon the money interplead to the courts, it is not yet clear as to whether or not the company will be subjected to two separate tax-assessing entities.

“Warehouse Market dba Cox Cash Saver Cost Plus is committed to the Okmulgee and surrounding communities and has been close to 80 years. We have been told many times that our store has the lowest prices offered on groceries and have no plans to leave these communities and place tremendous value on our longstanding relationship with the City of Okmulgee, the Muscogee (Creek) Nation, and their citizens. We appreciate all of our customers and will continue serving them now and in the future,” said Warehouse Market Executive Vice President Steve Davis.

Mvskoke Media reached out to the Office of the Principal Chief, MCN Realty and Tax Commission but at the time of press has received no response.

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