May 17, 2022

Botu Linum

The Car & Automotive Devotees

Beyond Casinos: Growth Opportunities for Business on Tribal Lands

4 min read

There is no shortage of scholarship or white papers on the intricacies of doing business in Indian County, but until recently, there have been few widely known examples that clearly demonstrate the benefits of operating on tribal land.

This fall, Tesla opened its newest showroom and repair center on the trust land of the Nambé Pueblo, a federally recognized tribe located north of Santa Fe, N.M. The reason for the unlikely Tesla showroom location, in the shadow of a tribal casino near a smoke shop and travel center, was an outdated state law that prohibited the electric auto maker’s business model of direct to consumer sales by requiring all car sales to go through a dealership.

Tribes are sovereign governments that predate the U.S. that retained their sovereignty when the U.S. and 50 states grew around them, and state law largely does not apply on tribal lands. This jurisdictional distinction has manifested in a lot of the businesses commonly associated with tribes, such as casinos, cigarettes, fireworks, and now revolutionary high-end electric cars. New Mexico’s state law requiring that auto sales all be through dealerships simply does not apply to tribal lands, including the beautiful new Tesla showroom at Nambé Pueblo.

Technology, brand identity, and a drastic shift to remote work have made many of the business norms created by laws, like the car dealership requirement, largely obsolete. Yet, many such laws remain on the books as impediments to growth and competition.

Indian Country presents a valuable opportunity to not only effectively manage outdated regulatory burdens but also presents significant benefits beyond simple jurisdictional advantages.

Trust v. Fee Land and Reservation Jurisdiction

The greatest advantage to partnering with tribes is in the unique status of their lands, which can be held in multiple ways, making a clear understanding of land status central to development opportunities.

Unlike fee land, which is alienable and subject to federal, state, and local laws, Indian trust land is land that is held in trust by the U.S. for the benefit of an Indian tribe and is therefore subject to the Indian tribe’s jurisdiction.

Because tribes are not subject to state land regulations, Nambé Tesla was able to simply bypass New Mexico’s outdated car dealership law and strategically place its business on tribal trust land.

Diversity and Inclusion Focus

Modern companies are embracing diversity and inclusion as the workforce composition continues to change. The obvious benefit of setting up shop on an Indian reservation is diversity in the local workforce.

The less obvious benefit is that tribes are deeply invested in employment of their citizens and are often willing to invest in workforce development programs, or access federal opportunities, that could build a valuable workforce pipeline.

Taxation

Another benefit of tribal jurisdiction over Indian trust land is the ability to negotiate taxes directly with the government exercising that jurisdiction. Neighboring states often have fixed taxes that cannot be altered, but tribal taxes are generally lower, less extensive, and can often be negotiated to benefit both parties.

Federal Investments in Rural Broadband

The federal government has recently invested heavily in rural broadband, especially as the Covid-19 pandemic continues to impact the country. Many tribal governments have taken advantage of these opportunities to greatly expand rural broadband on their reservations and update old and outdated equipment. As tribes continue to increase their modern connectivity, businesses will have greater opportunities to expand their places of business in tribal rural communities.

While these are certainly significant advantages for business opportunity, relationships still matter above all else. Regardless of financial incentives, a partnership for growth in Indian Country requires understanding that all tribes have different systems, cultures, and histories that must be taken into account for building value that can extend beyond a balance sheet.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Write for Us: Author Guidelines

Author Information

Charles W. Galbraith is co-chair of Jenner & Block’s Native American Law Practice and a partner in the Government Controversies and Public Policy Litigation Practice and the Government Relations Practice. He is a citizen of the Navajo Nation with over 15 years of experience helping tribes navigate their unique legal landscape and political relationships in the U.S.

Krystalyn Kinsel is an associate who focuses her practice on complex litigation and Native American affairs. She is a citizen of the Navajo Nation and her experience ranges from representing the sovereign interests of tribal governments to defending multinational technology companies and federal agencies against civil actions in federal, state, and tribal court.

https://news.bloomberglaw.com/us-law-week/beyond-casinos-growth-opportunities-for-business-on-tribal-lands