The Tribal Council of the Passamaquoddy Tribe at Sipayik, or Pleasant Point, announced last week that it would no longer collect an excise tax from resident tribal members registering vehicles.

Excise tax is collected by every municipality in the state from vehicle owners at the time of registration. It is based on the value of the vehicle, and the revenues are retained by the municipality to fund road repair and maintenance.

It is not clear, however, whether the Sipayik tribal government has the authority to take such action.

The exemption announced Thursday applies only to the estimated 600 enrolled tribal members who live within the boundaries of the Pleasant Point reservation. The adopted resolution is retroactive to the beginning of 2025, and the tribe said in a statement that it would begin to issue refunds in the coming weeks to return about $40,000 already collected this year.

Nontribal members living on the reservation will still pay the tax, which drops annually as vehicles age but can initially exceed $1,000, depending on the original price of the vehicle.

“We as a tribe don’t want to pay tax, so we don’t want to tax our tribal members,” Sipayik Tribal Administrator Pam Francis said.

Over the last five years, excise tax has generated $409,000 in revenue for the tribe, Francis said. The tribe’s total annual budget was not immediately available, but Francis said Sipayik leaders are not concerned about the lost revenue. (The tribe’s annual spending was about $13.7 million in 2018, the most recent year for which a budget was available.)

“We think it’s going to have an impact on the tribal members and allow them to have maybe a better vehicle, help with expenses in the household budget — things like that,” Francis said. 

She did not cite a statute empowering the Tribal Council to make this exemption.

Pos Bassett, chief of the Passamaquoddy Tribe at Sipayik, did not respond to requests for comment.

The law levying the excise tax states that municipalities shall collect it and lists 16 exemptions, none that include any mention of tribal members or governments.

Sharon Huntley, a spokeswoman for the Maine Department of Administrative and Financial Services, said Friday that the department could not comment on the tribe’s authority to exempt its members from the tax, “pending additional research.”

In general, the enrolled members who reside on a reservation of one of the 574 federally recognized tribes nationwide are not subject to state property taxes, and the authority to tax tribal members on tribal lands is an exclusive right retained by tribal governments.

But in Maine, the four federally recognized tribes do not have those same sovereign rights because of the 1980 Maine Indian Land Claims Settlement Act and the state law that implemented the settlement. Instead, tribes are treated like municipal entities and are largely subject to state laws.

In 2020, a task force charged with reviewing the implementing act suggested it be amended to provide the tribes with exclusive rights to tax their members living on-reservation. A bill introduced later that year to adopt many of the task force’s recommendations, including taxation authority, died in committee. Repeated attempts to restore tribal sovereignty since then have also failed.

The Penobscot Nation collects excise tax from tribal members, and members of the Houlton Band of Maliseet Indians pay excise tax to the Houlton municipal government, officials at each tribe confirmed.

Reuben M. Schafir is a Report for America corps member who writes about Indigenous communities for the Portland Press Herald.