August 15, 2011: Blue Lake vs. United States
Blue Lake Rancheria, an Indian tribe, seeks a refund of
Federal Unemployment Tax Act taxes paid by Mainstay Business
Solutions, an employee leasing company wholly owned
by the Tribe. Section 3306(c)(7) of Title 26 of the United
States Code excepts from the definition of “employment”—
and thus exempts from the payment of employment tax—
”services performed in the employ of an Indian tribe, or any
instrumentality” of a tribe. We hold today that this exception
does not apply where a tribe is merely a “statutory employer”
—in essence, nothing more than a paymaster. The exception
granted by § 3306(c)(7) applies only where a tribe is the
common-law employer. However, undisputed facts show that
Mainstay was, indeed, the common-law employer of the
workers at issue here and, therefore, was entitled to the special
tax treatment Congress saw fit to grant to Indian tribes.
CA29,975.pdf — PDF document, 115 KB (118041 bytes)
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