Tax Notes Talk

State Tax Authority and Native Americans: Complex and Convoluted

February 25, 2022 Tax Notes
Tax Notes Talk
State Tax Authority and Native Americans: Complex and Convoluted
Show Notes Transcript

Professor Adam Crepelle of the George Mason University Antonin Scalia Law School discusses the complicated tax relationship between U.S. states and Native American tribes.

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Host: David D. Stewart
Executive Producers: Jasper B. Smith, Paige Jones
Showrunner and Audio Engineer: Jordan Parrish

David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: tribal taxation.

The relationship between U.S. Native American tribes and taxation is a complicated one. By law, Native American tribes, their members, their lands, and their profits are exempt from state taxation without express authorization from Congress. Yet, if a non-Native contractor works on tribal lands, the taxation rights become murkier.

This week's episode is part of a series we've done on examining how tax rules affect marginalized groups. We'll include links in the show notes to our previous episodes on the intersection of tax and racial inequality, LGBTQ rights, feminism, diversity in international tax policy, and wealth and inequality.

So today we're going to take a closer look at the taxation of Native Americans and its complex nature.

Later in the episode, we'll have Tax Notes International columnist Tatiana Falcão discuss her series on cryptocurrency.

But first I'm joined by Tax Notes contributing editor Roxanne Bland. Roxanne, welcome back to the podcast.

Roxanne Bland: Thanks, Dave. It's great to be back.

David D. Stewart: Now, I understand you recently spoke with someone about taxation and Native Americans. Could you tell us about your guest?

Roxanne Bland: Adam Crepelle is a law professor at George Mason University and an expert in this field.

David D. Stewart: Could you give us an overview of what you talked about?

Roxanne Bland: Well, yes and no. Yes, because what we wanted to do was to give our listeners an idea of how the area of Indian state tax law became so complex.

For example, you mentioned earlier that Native American tribes, members, land, et cetera, are exempt from state and local taxation without express authorization from Congress. Well, that's not always true.

There's a reason for that. It's buried in the history of Native American relationships with the federal government, and that's what we talked about.

David D. Stewart: Well, all right. Let's go to that interview.

Roxanne Bland: Thank you for being here today, Adam. I understand you're working on a project at George Mason [University] that will be a wonderful resource for everyone who works in Indian tax law. Can you tell us a little more about it?

Adam Crepelle: Well, first of all, thanks for having me, Roxanne.

So, I'm working at George Mason's law school now directing its new tribal law and economics program. The purpose of the program is to apply a law and economics framework to federal Indian law. Law and economics has been applied to lots of areas of the law, tax law is one of them, but it's largely ignored the field of federal Indian law.

Nonetheless, we think law and economics has tremendous applications to Indian law because, as we'll see throughout this podcast, federal Indian law in general is particularly inefficient, and tax law is on a whole other thing when it comes inefficiency in Indian law.

Roxanne Bland: That's great. That's great. When do you expect it to be ready to go?

Adam Crepelle: So, the program launched in November this past year, and we're currently rolling out programming for the upcoming 2022 calendar year.

Roxanne Bland: Oh, that's excellent. All right, well, let's jump into it.

Whenever I think about or am working on a project or something involving Indian tax law, I'm always reminded of a phrase from the line in Sir Walter Scott's poem "Marmion: A Tale of Flodden Field." It's a phrase that we all know. It's called, "Oh, what a tangled web we weave." Of course, weavers in this case being Congress and the U.S. Supreme Court.

I think it would help our listeners a lot to give them a brief rundown on the legal history of Indian law, that is the relationship between the tribes and the governments, and when I mean that, I mean federal and state governments.

Adam Crepelle: So, the reason Indian law is so complicated is because, as you said, tribes existed as sovereigns prior to 1492. So, whenever the Europeans arrived on the America shores, there were already complex societies in the Americas. For example, Cahokia was one of the largest cities of the world by the year about 1100.

With that, some of the tribes actually had tax infrastructure in place. So, the Inca had the mit'a system where they had a system of labor that the citizens would partake in and charged tribes tolls to cross their land. They had other systems that would've functioned like taxes because they were full-functioning governments. The Europeans, when they came over recognized this, hence they entreated with the tribes. Treaties are agreements between nations.

So, France, Spain, England, they all did, and the United States followed in those footsteps. This is recognized in the Constitution a couple times, tribes being sovereigns. Article 1 Section 2: "Indians not taxed." Indians are not taxed because they're subjects of a separate sovereign. The Founding Fathers did lots of hypocritical things, but taxation without representation was apparently a bridge too far for even them, so Indians were not taxed.

Then the commerce clause recognized tribal sovereignty and, of course, the treaty clause. Tribes were clearly on the Founding Fathers' minds when they drafted that because they entreated with tribes immediately thereafter. That's how we get tribal sovereignty recognized today.

The Supreme Court has reaffirmed that through the Marshall Trilogy as our foundation. That starts in 1823 with Johnson v. M'Intosh, and the Supreme Court held that when Europeans came, tribes were divested of title of their lands through the doctrine of discovery, which essentially meant since tribes were not Christian or European, as soon as the first Christian-European nation showed up, planted a flag, ta-da, it was there and the tribes lost title.

However, they possessed the right of occupancy still, so tribes could remain on the land so long as they were not ousted by the federal government or they sold their lands to the federal government. This also gave the federal government a monopsony. They controlled the price of the land because tribes couldn't sell it to anyone else. That greatly undermined Indian sovereignty.

Then Cherokee Nation v. Georgia is the next big one. This is when the state of Georgia is trying to kick out the Cherokee, the Cherokee Sioux, claiming they have original jurisdiction because they're a separate nation. "We have treaties with the U.S. Government," is what the Cherokees were saying. You can't entreat with someone who's not a sovereign.

So the Supreme Court says, "Not so fast. You're not a foreign nation. You're a 'domestic dependent nation,' which means the Cherokee's relationship with the United States is like that of a ward to his guardian."

That's the status tribes occupy to this day, domestic dependent nations. That leads to a lot of the complications that we have today when it comes to taxation because tribes are no longer full sovereigns, but domestic dependent nations.

Then a year later we get Worcester v. Georgia, which we have a new plaintiff, a non-Indian who's a white guy, so he can sue. So, the Supreme Court's able to hear the merits of the case and it rules state sovereignty ends where Indian country begins, setting forth a bright-line rule. If there's Indian country, states have no authority, so simple and clear. Andrew Jackson's the president and he refuses to enforce it, so we get the Trail of Tears, and that's the backdrop of which all of Indian law takes place upon and tribes get up on Indian reservations after that.

Then we get the Allotment Era in the 1880s. This is when the federal government's trying to essentially assimilate Indians. So, they're taking Indian kids and putting them in boarding schools. They're breaking up reservations that were guaranteed to tribes for all times and bringing in non-Indian settlers. The purpose is to abolish Indian culture, convert them into Christians, and all of that.

It works out incredibly poorly for tribes. They lose 90 million acres of land, and of course the land that the Indians are allotted is lower quality than the land that the non-Indians get. So incredibly terrible piece of legislation for tribes, and that's in the 1880s.

It goes on until 1934 when we get the Indian Reorganization Act (IRA), and this ends Allotment, and it's the first piece of legislation that tribes are actually consulted on. They have the option to adopt the IRA. Even if they do though, there's still lots of federal paternalism, so they're not full sovereigns yet.

That brings us to World War II. Soon after that, we get the Termination Era, and the federal government is trying to get out of the Indian business all over again. So they extend state law over reservation lands, but they explicitly exempt reservation lands from state taxation with Public Law 280, which has been the source of lots of controversy.

Then by 1970, we get the Indian Self-Determination Era, which we're in now. Supposedly the federal government wants to promote tribal self-government, which is great on paper, and they've enacted lots of laws towards that end. But when it comes to the realm of taxation, it hasn't quite panned out that way. That's a quick crash course.

Roxanne Bland: So, in other words, states cannot tax activities, Indians themselves, or whatever, if they are on reservation lands. Correct?

Adam Crepelle: Well, when you say Indians, that gets tricky. So, is the person enrolled in that tribe or are they not? That's a big difference. So, for example, if you're a Navajo and you're on the Navajo Nation, the state of Arizona nor New Mexico can tax you. However, if you're, say a citizen of the Cherokee Nation and you're on the Navajo Nation, then the state of Arizona is permitted to tax you.

Roxanne Bland: So, in other words, you are a non-enrolled member of the tribe where they're living, the non-enrolled member is treated like a non-Indian. Correct?

Adam Crepelle: Yes, ma'am. That's correct.

Roxanne Bland: So, that I think is just an example, one example, of how the tax law became so convoluted.

I guess the other thing is that, if you would agree with this, when this nation was founded and the relationship between the federal government and the tribes were established, I think it's fair to say that no one thought, maybe not even the Indians themselves, no one thought that a tribe would be running an enterprise or in business for itself, or would have non-Indian businesses on reservation land.

What impact did that have on the development or non-development of state Indian tax law?

Adam Crepelle: Yeah, that's certainly true. So, the whole plan, whenever the United States was founded, is Indians weren't supposed to last forever. It was known as the Vanishing Indian theory, best known through the "Last of the Mohicans."

Indians weren't supposed to last much past the early 1800s. George Washington famously described the United States first Indian policy as the "Savage as the Wolf." So, whenever European or, I guess, American settlement expanded, the Indians would necessarily disappear because they couldn't exist in a modern society. So, the Founding Fathers clearly didn't imagine that Indians would be doing a lot of the things they're doing now.

Roxanne Bland: Because they didn't imagine that, I guess, what, up until the earlier part of the last century, since they couldn't imagine that, there was no provision made for tribal businesses and how they operated, their relationship to a state's tax law. Correct?

Adam Crepelle: Yeah. So, and I guess rolling back a little bit farther on that, so when tribes got put on reservations, they didn't really have a whole lot of autonomy. It was basically a prisoner of war camp. You couldn't leave without the reservation superintendent's permission. It was not a good time.

So yeah, they clearly didn't envision tribes doing anything. In fact, a lot of them were just hoping they would wither away or assimilate, just disappear.

Roxanne Bland: So, tell me what, in the modern era, what case would you say that the U.S. Supreme Court came down with? I can't say it would be the starting point of this convoluted law, but is there any case that stands out as sort of crystallizing the problem?

Adam Crepelle: Definitely. Cotton Petroleum [Corp. v. New Mexico] would be the big one that has screwed it up the most for tribes, I would say.

So, what happened in that case is the Jicarilla Apache tribe has oil on its reservation. In 1982, the Supreme Court affirmed the Jicarilla Apache and all other tribes right to tax enterprises operating on their land, which if you want to have a functioning government, the capacity to tax is obviously a useful tool in that kit. So, the Supreme Court affirmed that.

Following that, the tribe levies its own tax on this non-Indian oil producer. The state of New Mexico wants to tax the non-Indian oil producer also. So, the oil producer, Cotton Petroleum, of course, challenges the tax, like, "Look, this is not practical. I'm paying the tribe and the state the tax, and I'm operating on the tribe's land." Moreover, Cotton Petroleum argued, "Look, the state of New Mexico is assessing $2.3 million in taxes. It's providing less than $90,000 of services. This does not make any sense. Why am I paying all these taxes?" The Supreme Court said, "Too bad."

So it's this weird balancing test that was developed by the Supreme Court in [White Mountain Apache Tribe v.] Bracker. So, it balances the state interest, the federal interest, and the tribal interest. So, basically the tribal interest is a wash. What the Supreme Court looks at is does the federal government extensively entangled in the enterprise? And does it completely occupy the field? It said the federal government and the tribe do most of the work on oil production, but the state does have some minor role, therefore that justifies the tax. It's just gotten worse as the years have gone on.

The most recent manifestation, probably the most outrageous in my opinion, is the Tulalip tribes in Washington. They developed this enterprise on their reservation, Quil Ceda Village. The state was not very supportive of the enterprise. It wouldn't build a road to the enterprise. So, the tribe and the Fed provided virtually all the funds to build it. The tribe provides all the police services, the utilities, everything you would expect from a city, the tribe itself provides.

Nonetheless, the state of Washington and the local county collect over $40 million a year in taxes from it. The tribe has yet to collect the first cent in taxes, because if it does, you have the tribal tax plus the state and local tax. Now it's more expensive to shop on the reservation. Of course, nobody's going to drive to the reservation to spend more money.

The federal district court said, "That's fine," and the reasoning is quite peculiar, and this highlights what I was talking about with the balancing test. So, Indian country has a dearth of private businesses because it's so complicated with all the federal bureaucracy. So, what the court reasoned is the Quil Ceda Village, which is owned by the Tulalip tribes, since the federal government did not set the store hours, did not set the price of goods, the federal government wasn't extensively involved in the operation showing a strong federal interest in the enterprise, and that justifies state taxes because the feds weren't micromanaging. Which does not make sense to anybody anywhere, but it's a federal district court and like 10 years good if you're a federal judge.

Roxanne Bland: Yeah. That makes no sense. Absolutely no sense. So, according to this federal district judge, if the federal government is not micromanaging a tribal enterprise, then it has no or minimal interest in the project?

Adam Crepelle: Exactly. Yeah. That was another bizarre thing in the reasoning.

So, the Tulalip tribe actually got this piece of legislation called the Tulalip Policing Act passed because they wanted to get some of the federal bureaucracy off their land, which would seem to suggest the federal government's interested in letting the tribe do its own thing. So, what the district court said, which still boggles my mind, is that when the federal government got out the way for leasing, that created more space for the state to regulate, which seems to defy logic. The federal district court also admitted the state doesn't do much on the reservation. But it said since the state of Washington provides education services throughout the state, that justifies the taxation because all the customers benefit from the taxation.

Roxanne Bland: Wow. That reminds me of a case where the Eighth Circuit came to a similar conclusion by saying that the contractor, who was hired, a non-Indian contractor who was hired to perform work on the reservation repairing the tribe's casino, the South Dakota's contractor excise tax was validated because the contractor received services in the state, of course, and that the state had an interest in imposing a tax that is applied uniformly across the state to contractors. Which sounds suspiciously like what this federal district court judge said.

You are right. It has absolutely no logic. The state's involvement, any way you look at it is minimal, and it certainly doesn't justify a full load of tax on whoever has to pay it. If anything, the tax should be apportioned, most of it going to the tribe, of course. Unless there's an agreement between the tribe and the states, it always seems to be an all or nothing proposition. Why?

Adam Crepelle: That's a good question. That's just how it's come down. The apportionment thing is a good point you raise. That would be one way to potentially solve this. "Look, you have to justify any tax you're levying based upon the service you're providing." But that has not come down so far. So far, it's been all or nothing. The state tax is preempted or the state could assess the full tax. Of course, if the state gets to assess its full tax, that basically eliminates the tribe's ability to levy any taxes.

That's what contributes to a lot of the social problems on reservations because tribes don't have the tax revenue to fund police. They don't have the tax revenue to fund schools or courts or anything like that. So, without tax revenue, people talk about tribal governments having operational problems, well, it's really difficult to operate when you don't have a tax base.

Roxanne Bland: As that hoary Supreme Court decision says, taxation is a core aspect of sovereignty. So in that sense then, tribes are really sovereign in name only because if you can't support your government, you'd have nothing.

Adam Crepelle: Yeah. It makes it really difficult to operate as a full-functioning sovereign without the ability to tax.

Roxanne Bland: Wow. Sorry, that's outrageous.

OK. Let's move on to a non-tax subject actually. In 2020 the U.S. Supreme Court came down with a decision called McGirt v. Oklahoma. That was in which the court basically said, "United States, this was the boundary of the reservation as was drawn up in the treaty. That you have allowed non-Indian settlers and cities and whatever else onto this land does not change its status as a reservation because it was never disestablished by Congress."

Now, McGirt was a criminal jurisdiction case. In fact, it was a federal criminal jurisdiction case. So, the end in that case being that the state had no jurisdiction to convict Jimcy McGirt of these rather heinous crimes, but that only the federal court could have done so under the 1885 Major Crimes Act.

But this language that the court used in justifying or explaining why the reservation still existed despite the incursion of non-Indians, what does that do to land that may have been alienated under the General Allotment Act?

Adam Crepelle: So, if it's a privately owned fee simple land, it's not clear what the tribe's jurisdiction over that is. So, you have the test set forth in Montana v. United States that says tribes can levy taxes or civil regulatory authority over non-Indian fee land within a reservation if there's a consensual relationship between the tribe and the non-Indian. Or if the activity being regulated imperils tribal existence, which is an incredibly high bar. High speed car crashes on the reservation apparently don't endanger a tribal sovereignty, the Supreme Court has held.

Although recently this past term, the Supreme Court did uphold a Montana two exception for the first time. It was on very narrow grounds though. So, you had a non-Indian meth guy who had guns in his car. The Supreme Court held tribal police can, "detain him until state or federal law enforcement comes." That was the closest we've got to a full affirmation of a tribal inherent authority to just regulate their land without a consensual relationship.

So, as far as that goes, tribal authority over non-Indians on fee lands within a reservation is probably still going to be quite limited. So, if you're a non-Indian within the boundaries of the Creek Reservation residing on a non-Indian fee land, just doing something on non-Indian fee land, the tribe's jurisdiction probably is going to be rather limited if it exists at all.

Roxanne Bland: So then you're saying that the possibility or even the probability of McGirt's reasoning spilling over to civil jurisdiction is pretty much slim to none. Right?

Adam Crepelle: Well, it's not clear. Indian law is kind of a roll of the dice. Sometimes we never know what's going to happen so it's tough to say.

Justice Gorsuch did add some language in his majority opinion stating the definition of Indian country, 18 USC 1151A explicitly recognizes private lands within a reservation's boundaries, so perhaps that does hint at civil authority over those lands.

But to date it's pretty slim as far as the tribe's chance of asserting civil regulatory authority over non-Indian fee lands located within a reservation.

Roxanne Bland: Well, what Gorsuch said certainly opens a door to a possible more favorable interpretation in favor of the tribes in the future. That sounds like it would be one of those slenderest of hooks that somehow blossoms into an entirely new approach to whatever subject that you're dealing with. That actually sounds promising to some extent. Certainly not today, but maybe sometime in the future. Maybe, I don't know, 10, 20 years from now. Or I guess it's probably safe to say when the political leanings of the court changes, we might get a different result, and that would be very interesting to see.

With respect to tribes and taxation and business interests and things like that, how far along are tribes in achieving parity with the states when it comes to government? Many of the tribes have the three branches of government that mirrors the state and the federal.

Is the question of parity, is that about the states taking the tribes seriously as a government? Or is it something else?

Adam Crepelle: That's part of it. I guess it's tough to say because each tribe's going to be different. So, you have 574 federally recognized tribes, and they operate on vastly different scales of size. You have some like the Cherokee Nation and Navajo Nation, which have over 300 citizens. Then you have some tribes that have less than 100 citizens. So just the capacity right there is going to be different.

Likewise, some tribes have tremendous economic bases and others don't have anything. They're basically living in third world conditions. Don't have running water on the reservation. So, it varies greatly from tribe to tribe. In eastern Oklahoma, where the McGirt decision happened, so you have the Choctaw Nation, Chickasaw Nation, Cherokee Nation, Muskogee Creek, they all have successful enterprises, large populations. Choctaw and Chickasaw are two of the largest employers in the state, so they have significant resource bases.

So as far as parity with the states, they've long had good relations with the state of Oklahoma, pretty good relations with the state of Oklahoma. They've deteriorated in recent years. McGirt's probably played a factor in that, but just some things at the state level and well, politics are always funky.

But yeah, so it's going to vary a lot from state to state. A lot of it depends on their relationship between the individual tribal leaders and the individual elected officials in the state.

Roxanne Bland: Do you think a comprehensive federal law could abolish some of this mess? When I say comprehensive, I'm not just talking about tax, but certainly for our purposes, taxation would be the centerpiece.

If Congress was to pass a law that just did away with all of these conflicting court decisions, with all of these prior statutory provisions like the General Allotment Act and so on and so forth, do you think that would be at least a help in clearing out some of the confusion with respect to Indian law?

Adam Crepelle: Absolutely. Yeah. That's part of the thing. The federal law is such a mess. Due to Supreme Court decisions, largely nobody knows which law applies and when.

Some people talk about tribes lacking law. It's not the fact that the tribes don't have laws, it's just not clear what law applies when. Plus, if you can't assert jurisdiction over most of the people on your land — tribal jurisdiction is largely limited to Indians — that creates a strong disincentive to develop a full body of laws when you can't apply it to people.

So, the way it's set up is not efficient for anybody. Yet, the simple thing would be going back to the original principle set forth by the Supreme Court in 1832. State law stops where the reservation begins. Of course, tribes and state should be able to negotiate as sovereigns on what services go across the border. But just setting forth that as a bright-line rule would clarify a lot of things.

I think businesses would go for that too because now look, you've got another jurisdiction to operate in. It's federalism at large, this is what we like to promote in the United States. So, just let tribes participate in the federalist system.

Roxanne Bland: Yeah. That would be a wonderful thing.

But is part of the problem, do you think that tribes are a hybrid of a state in a foreign country? Foreign country might not be absolutely the correct term, but they're not states, they're not foreign countries. They're like this political hybrid that has no place in the federal system.

So, would we expand the concept of federalism to include tribes or how would we deal with that?

Adam Crepelle: Yeah, I think that would be a natural fit. Just go back to the original principle, like you're saying. It's not that far a stretch.

For example, states exempt big corporations from taxes all the time. Why can't we let tribes just govern their own people? If Amazon deserves a tax break, I would think the Cherokee Nation shouldn't have to worry about collecting taxes for the state.

So yeah, I think it's just a matter of respecting tribes as governments is the key thing. They could be like little mini Taiwans or Hong Kongs essentially.

Roxanne Bland: Right. Well, respecting the tribes. Well, hopefully we'll get there someday.

Adam, I want to thank you for joining me today to talk about this incredibly complex subject that provides food for thought for people like me for weeks and weeks on end.

Adam Crepelle: Well, thank you. It's an honor to be here.

David D. Stewart: Now, coming attractions. Each week we highlight new and interesting commentary in our magazines. Joining me now is Acquisitions & Engagement Editor in Chief Paige Jones. Paige, what will you have for us?

Paige Jones: Thanks, Dave. In Tax Notes Federal, Peter Richman analyzes the proposed changes to section 361 in the Build Back Better Act. George Salis explores the macroeconomic link between inflation and taxation and how they affect one another. In Tax Notes State, Robert Plattner analyzes the history of the U.S. Supreme Court's dormant commerce clause and speculates its future after Wayfair. Robert Tannenwald evaluates why state, film and TV tax credits endure. In Tax Notes International, Jin Wook Lee and Ross Harmon question whether cryptocurrencies should be classified as currency or assets and discuss how South Korean tax authorities treat them. Three Fenwick & West practitioners examine recent OECD developments, including the updated transfer pricing guidelines and the pillar 2 model rules as well as comments on the corporate and international tax provisions of the Build Back Better Act. In Featured Analysis, Roxanne Bland examines the use of tax incentives by states to increase revenue. On the Opinions page, Carrie Brandon Elliot writes that the preamble to recent U.S. Regulations attacks destination-based taxes.

Now, for a closer look at what's new and noteworthy in our magazines, here is Tax Notes Executive Editor for Commentary Jasper Smith.

Jasper Smith: Thank you, Paige. I'm here with Tatiana Falcão, an international tax law consultant and policy advisor. Tatiana, welcome to the podcast.

Tatiana Falcão: Thank you, Jasper. It's a pleasure to be here.

Jasper Smith: So, we're here today to discuss your series on cryptocurrency and tax. So, could you just tell us a bit about that series?

Tatiana Falcão: Absolutely. The series will comprise of four parts. The first part has actually already been published by Tax Notes International on February 14. I can give you a brief overview of the subjects, we, and by that I mean Bob Michel, my co-author, and myself tackle on each of the articles.

In the first part, we set out to explain why it is so important for low and middle-income countries to focus on developing a comprehensive tax treaty policy to do with cryptocurrency use. If you look at the latest statistics on cryptocurrency trade volumes and especially trade volumes per capita or measured in function of GDP, you will see that the embrace of cryptocurrencies is very strong in low- and middle-income countries like Nigeria, Kenya, and Ghana in Africa or Vietnam, Thailand, and India in Asia. In actual fact, the embrace of crypto by low- and middle-income countries is much stronger than in the average high-income countries.

In this first article, we therefore identify some of the reasons why cryptocurrencies are so popular in low-income countries. What low- and high-income countries have in common though, is the fact that policymakers are now faced with the task of regulating crypto, both from a tax perspective and from a non-tax perspective.

In most low-income countries, governments' approaches to cryptocurrencies have been a bit like Hegelian dialect. First, there was the thesis that the government did not have to act at all. Live and let live. Then there was the antithesis view that governments had to ban cryptocurrencies given the threats associated with their popularity. Now we're living in the synthesis, in which it has become clear that banning a borderless global phenomenon is very difficult and has a lot of negative side effects and that there is a need to regulate cryptocurrencies.

So, what we see now is growing momentum to devise a suitable tax policy. In our column, we point out that for low-income countries, time is of the essence. There is none left to be wasted. In the second article of the series, to be released in a few weeks, we will delve into the question of how a suitable cryptocurrency income policy should actually look like for a low-income country.

So then we come to the third article, and in that article we will delve into a hot topic that is relevant both for low- and high-income countries and that is very close to my heart if anyone follows my columns, and that is can tax make crypto green or at least greener? I think everyone has heard these catchy journal article titles like, "Bitcoin Uses More Electricity Than Argentina." We will delve into the literature on cryptocurrency's electricity appetite and ask the simple question: can tax be used as a policy instrument to push cryptocurrency into a greener development track?

Finally, the fourth article, or the fourth part of an extremely long article, we will be talking about exchange of information. So exchange of information is the missing keystone when it comes to efficient levying of taxes on cryptocurrencies. There is a parallel with the history of taxation of interest and other financial income in that a country can devise the perfect rules in estate tax liabilities, but if it is not aware of its taxpayers' foreign activities and if it has to rely merely on self-reporting, then compliance will be problematic.

So, we believe that with these four parts, we have dealt with the crypto tax subject from all angles and hope to have given the readers a good insight in what matters for low-income countries in the current and upcoming debates on the topic.

Jasper Smith: I think you absolutely have, Tatiana. We certainly appreciate that very thorough description, and you identified a number of what I would consider important and interesting topics both currently and certainly some things that we will see on the horizon that various governments will have to deal with and address.

So, before we let you go today, can you let listeners know where they might be able to find you online?

Tatiana Falcão: Absolutely. I can be found on LinkedIn where I do most of the marketing of my articles. My LinkedIn tag is Tatiana-Falcao-Tax, and actually my co-author Bob Michel can also be found on a similar tag. It's Bob-Michel.Tax Or via email Or finally on Twitter at @tatfalcao.

Jasper Smith: Excellent. Thank you so much again, and you can find Tatiana's series online at, and be sure to subscribe to our YouTube channel Tax Analysts for more in-depth discussions on what's new and noteworthy in Tax Notes. Again, our YouTube page is Tax Analysts with an S. Back to you, Dave.

David D. Stewart: That's it for this week. You can follow me online at @TaxStew, that's S-T-E-W, and be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at As always, if you like what we're doing here, please leave a rating or a review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.

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