# Meashintubby v. Paulk

> District Court, E.D. Oklahoma · January 30, 2023

URL: https://www.frixlaw.com/law-library/cases/10385599

## Case

- **Court:** District Court, E.D. Oklahoma
- **Decided:** January 30, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10385599

## How later opinions describe it (automated extraction)

- recognizing categorical rule that “absent cession of jurisdiction or other federal statutes permitting it, we have held, a State is without power to tax reservation lands or reservation Indians.”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA

HAROLD MEASHINTUBBY and NELLIE
MEASHINTUBBY,

Plaintiffs,
vs. Case No. 22-CV-59-EFM
SHELLY PAULK, Chairperson of the
Oklahoma Tax Commission, et al.,

Defendants.

MEMORANDUM AND ORDER
Before the Court is Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction
(Doc. 21). Defendants are the Chairperson, the Vice-Chairperson, and the Secretary-Member of
the Oklahoma Tax Commission, sued in their official capacities by Plaintiffs Harold and Nellie
Meashintubby. Plaintiffs, as enrolled members of the Choctaw Nation, seek declaratory and
injunctive relief prohibiting the Defendants from assessing, levying, and collecting Oklahoma state
taxes (including penalties and interest) upon their income. They rely primarily on the Supreme
Court decision in McGirt v. Oklahoma1 and its progeny from the Oklahoma courts, under which
much of eastern Oklahoma constitutes “Indian County” for the purposes of the federal Major

1 140 S. Ct. 2452 (2020).
Crimes Act. Based on this, they argue that their income should be exempt from taxation under the
rule that, without Congressional authorization or a cession of jurisdiction, the State is generally
without power to tax reservation lands or reservation Indians.2
Defendants do not respond to the merits of Plaintiffs’ contentions at this time. Instead,
their instant Motion argues that the federal Tax Injunction Act (“TIA”) deprives this Court of

subject matter jurisdiction to grant any of the relief requested by Plaintiff, including with respect
to interest and penalties. Plaintiffs respond that the TIA does not apply to their request for relief.
In the event the Court finds that the TIA does apply, Plaintiffs urge the Court to find that it does
not apply to their requested relief as to the penalties and interest imposed, as well as their requests
for declaratory relief and for a refund of the amount Plaintiffs paid under protest for the tax year
2020.
The Court agrees entirely with Defendants. As explained more fully below, Defendants’
Motion to Dismiss for Lack of Subject Matter Jurisdiction is granted.
I. Background

1. Legal Overview
Plaintiffs’ suit is generally based on the well-established principle that States are “without
jurisdiction to subject a tribal member living on the reservation, and whose income derived from
reservation sources, to a state income tax absent an express authorization from Congress.”3

2 See Okla. Tax Comm’n v. Chickasaw Nation, 515 U.S. 450, 458 (1995)
3 Okla. Tax Comm’n v. Sac & Fox Nation, 508 U.S. 114, 123 (1993) (citing McClanahan v. Ariz. State Tax
Comm’n, 411 U.S. 164 (1973)).
Supreme Court precedent has repeatedly affirmed this principle,4 and Oklahoma law likewise
reflects adherence to this categorical rule. Under the Oklahoma Administrative Code, income
earned by an enrolled member of a federally recognized tribe from sources within “Indian
Country” under that tribe’s jurisdiction is exempt from state income tax if the tribe member also
lives within “Indian Country” under their tribe’s jurisdiction.5 “Indian Country” is defined by

Oklahoma regulation as “formal and informal reservations, dependent Indian communities, and
Indian allotments, the Indian titles to which have not been extinguished, whether restricted or held
in trust by the United States.”6
The meaning of “Indian country” under Oklahoma tax regulations has been recently called
into question following a number of decisions expounding on the meaning of the same term under
the federal Major Crimes Act. 18 U.S.C. § 1151 defines “Indian country” as, among other things
“all land within the limits of any Indian reservation under the jurisdiction of the United States
Government, notwithstanding the issuance of any patent, and, including rights-of-way running
through the reservation.”7 Beginning with McGirt v. Oklahoma,8 the Supreme Court held that a

large area in eastern Oklahoma that was historically part of the Creek Nation, under an 1833 treaty,
qualifies as “Indian country” under § 1151.9 The Oklahoma Criminal Court of Appeals has

4 Id.; see also Chickasaw Nation, 515 U.S. at 458 (recognizing categorical rule that “absent cession of
jurisdiction or other federal statutes permitting it, we have held, a State is without power to tax reservation lands or
reservation Indians.”) (brackets and internal quotation omitted)
5 See Okla. Admin. Code § 710:50-15-2(b)(1).
6 Id. § 710:50-15-2(a)(1).
7 18 U.S.C § 1151(a)
8 140 S. Ct. 2452 (2020).
9 Id. at 2459.
subsequently extended this holding to lands historically part of the Choctaw Nation,10 as well those
of the Chickasaw,11 Cherokee,12 Seminole,13 and Quapaw Nations.14
Following these decisions, thousands of taxpayers have claimed exemption from
Oklahoma income tax under § 710:50-15-2 of the Oklahoma Administrative Code. Plaintiffs are
two of these taxpayers.

2. Factual and Procedural Background
Plaintiffs are a married couple currently living in McAlester, Oklahoma. They are both
enrolled members of the Choctaw Nation of Oklahoma. They allege that, during tax years 2017
and 2020, they both lived and worked within the boundaries of the Choctaw reservation. After the
McGirt and Sizemore decisions, Plaintiff’s amended their tax return for tax year 2017 to claim
exemption from Oklahoma state income taxation under § 710:50-15-2. They claimed the same
exemption for tax year 2020.
The Oklahoma Tax Commission (“OTC”) denied Plaintiffs’ requested exemptions. On
June 3, 2021, the OTC sent a letter that disallowed the requested exemption as to Plaintiffs’ 2017

amendment. Plaintiffs responded by filing a protest letter on July 15, 2021, to which they allege
the OTC has not responded. Similarly, on October 19, 2021, the OTC disallowed Plaintiffs
requested exemption as to their 2020 tax return. Plaintiffs’ response, dated November 12, 2021,

10 Sizemore v. State, 485 P.3d 867, 871 (Okla. Crim. App. 2021), cert. denied, 211 L. Ed. 2d 618, 142 S. Ct.
935 (2022).
11 Bosse v. State, 499 P.3d 771, 774 (Okla. Crim. App. 2021), cert. denied, 212 L. Ed. 2d 23, 142 S. Ct. 1136
(2022)
12 Hogner v. State, 500 P.3d 629, 635 (Okla. Crim. App. 2021).
13 Grayson v. State, 485 P.3d 250, 254 (Okla. Crim. App. 2021), cert. denied, 211 L. Ed. 2d 618, 142 S. Ct.
934 (2022).
14 State v. Lawhorn, 499 P.3d 777, 779 (Okla. Crim. App. 2021).
included a payment of the total tax due. Plaintiffs also noted that the tax was being paid under
protest and included a notice of intent to file suit. The OTC later mailed Plaintiffs a notice
demanding payment of interest and penalty amounts for tax year 2020, as a result of Plaintiffs’
failure to pay their tax liability by the due date of June 15, 2021.
Plaintiffs initiated the instant action on February 18, 2022. Their Complaint seeks the

following relief: (1) preliminary and permanent injunctive relief preventing the assessment of
Oklahoma state tax against their income; (2) preliminary and permanent injunctive relief
preventing the assessment of any interest and penalties associated with their non-payment of
income tax; (3) a declaratory judgment that the Choctaw reservation, as it is currently recognized
for the purposes of federal criminal law, is “Indian country” for the purposes of preempting
Oklahoma state taxation, including interest and penalties, upon Plaintiffs’ income; and (4)
recovery of the tax paid by the Plaintiffs under protest for the tax year 2020.
Defendants now move to dismiss Plaintiffs’ Complaint in its entirety. They contend that
this Court lacks subject matter jurisdiction over the action under the Tax Injunction Act.

II. Legal Standard
Federal courts are courts of limited subject matter jurisdiction.15 As a result, federal courts
“may only hear cases when empowered to do so by the Constitution and by act of Congress.”16
Congress may also specifically divest federal courts of jurisdiction over certain types of cases.17
As relevant here, the Tax Injunction Act (“TIA”) provides that “[t]he district courts shall not

15 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
16 Gad v. Kan. State Univ., 787 F.3d 1032, 1035 (10th Cir. 2015) (quoting Radil v. Sanborn W. Camps, Inc.,
384 F.3d 1220, 1225 (10th Cir. 2004)).
17 See, e.g., Marcus v. Kan. Dep’t of Revenue, 170 F.3d 1305, 1309 (10th Cir. 1999).
enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a
plain, speedy and efficient remedy may be had in the courts of such State.”18 The TIA thus
“operates to divest the federal courts of subject matter jurisdiction over claims challenging state
taxation procedures where the state courts provide a plain, speedy and efficient remedy.”19 The
Supreme Court has read the TIA as a “broad jurisdictional barrier” that is “first and foremost a

vehicle to limit dramatically federal district court jurisdiction.”20
The purpose of the TIA is to “protect the ‘federal balance’ by permitting states to ‘define
and elaborate their own laws through their own courts and administrative processes without undue
influence from the Federal Judiciary.’ ”21 “Courts must guard against interpretations of the Tax
Injunction Act which might defeat its purpose and text.”22 That said, the TIA is not a “sweeping
congressional direction to prevent federal-court interference with all aspects of state tax
administration.”23
Because the subject matter jurisdiction of federal courts is limited, “there is a presumption
against [the court’s] jurisdiction, and the party invoking federal jurisdiction bears the burden of
proof.”24

18 28 U.S.C. § 1341.
19 Marcus, 170 F.3d at 1309 (citation and internal quotations omitted).
20 Arkansas v. Farm Credit Servs. of Cent. Ark., 520 U.S. 821, 825-26 (1997) (internal quotations and citation
omitted).
21 Chamber of Com. of U.S. v. Edmondson, 594 F.3d 742, 761 (10th Cir. 2010) (quoting Farm Credit Servs.,
520 U.S. at 826).
22 Id. (quoting Farm Credit Servs., 520 U.S. at 827) (brackets omitted).
23 Hibbs v. Winn, 542 U.S. 88, 105 (2004) (quotation omitted).
24 Penteco Corp. v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir. 1991).
III. Analysis
Defendants’ invocation of the TIA raises two questions: (1) whether the various types of
relief sought by Plaintiffs in this action fall within the purview of the TIA, and (2) whether the
Oklahoma state courts provide a “plain, speedy and efficient remedy” for state tax disputes.
A. Each of the types of relief sought by Plaintiffs fall within the purview of the TIA.

Plaintiffs seek four types of relief in this action. First, they seek a preliminary and
permanent injunction against the assessment of Oklahoma income taxes for income earned within
the boundaries of Choctaw territory. Second, and in the event the Court determines the TIA applies
to bar the exercise of jurisdiction over Plaintiffs’ first claim, they seek the alternative remedy of
injunctive relief preventing the assessment of interest and penalties against Plaintiffs by the OTC.
Third, Plaintiffs seek a declaratory judgment that the Choctaw Reservation, as it is currently
recognized for the purposes of federal criminal law, is Indian country for the purposes of
preempting state taxation upon Plaintiffs’ income. And fourth, Plaintiffs seek a refund of the tax
paid under protest for the tax year 2020. The Court examines each in turn.

1. Injunctive Relief as to the Assessment of Income Tax.
Plaintiffs’ request for injunctive relief barring the OTC from assessing state taxes on
income earned by Plaintiffs within the Choctaw reservation, as it is now recognized for the
purposes of federal criminal law, is exactly the type of relief the TIA forbids this Court from
awarding. “[A]n injunction is clearly a form of equitable relief barred by the TIA.”25 And there

25 Direct Mktg. Ass’n v. Brohl, 575 U.S. 1, 7 (2015).
is no question that Plaintiffs are asking for an injunction against the “assessment, levy or collection
of any tax under State law.”26
Plaintiffs do not deny this, and instead seem to recognize that their request to this Court
flies in the face of the restrictions of the TIA. Tellingly, Plaintiffs’ repeatedly frame their
Complaint, as well as their response to Defendants’ instant Motion, in terms that “even if” the TIA

applies to their request for injunctive relief as to state income taxes, the Court should still find that
they prevail for some other reason. Their commitment to this argument is so complete, in fact,
that they neglect to make any case that the TIA does not apply to their requested injunction as to
state income taxes. The Court thus has no trouble concluding that the TIA deprives it of the ability
to issue the injunctive relief Plaintiffs request as to their state income taxes.
2. Injunctive Relief as to Interest and Penalties
Anticipating the Court’s conclusion above, Plaintiffs’ Complaint notes that “[i]n the event
the Court determines the Tax Injunction Act, 28 U.S.C. § 1341, or other rule of law applies to the
income taxes in question, the Plaintiffs seek an alternative remedy of injunctive relief against the

interest and penalties.” Plaintiffs claim that the TIA does not apply to interest and penalties
because neither of those constitute a “tax” for the purposes of the TIA.
In determining whether an assessment is a “tax” under the TIA, courts look to the purpose
of the assessment.27 The purpose of a tax is generally to raise revenue, “while levies assessed for
regulatory or punitive purposes, even though they may also raise revenues, are generally not
taxes.”28 The ultimate use of the funds may help elucidate the purpose of the assessment, as may

26 28 U.S.C. § 1341.
27 Edmondson, 594 F.3d at 761.
28 Id. (citation and quotation marks omitted).
the “statute’s avowed purpose as stated in its text as well as the incentive structure created by a
levy.”29 The Tenth Circuit has identified several characteristics of state taxes and regulatory fees:
The classic tax sustains the essential flow of revenue to the government, while the
classic fee is linked to some regulatory scheme. The classic tax is imposed by a
state or municipal legislature, while the classic fee is imposed by an agency upon
those it regulates. The classic tax is designed to provide a benefit for the entire
community, while the classic fee is designed to help defray an agency’s regulatory
expenses.30
An example of a “classic tax” is state income tax while a “classic fee” might be a charge for entry
into a state park, imposed by the state park authority to regulate park usage and support the upkeep
of the park.31 Assessments that appear to have characteristics of both taxes and regulatory fees are
“to be regarded as cases of taxation” unless “regulation is the primary purpose” of the assessment.32
The assessment of interest and penalties on Plaintiffs’ delinquent taxes for tax year 2020
appear to have characteristics of both taxes and regulatory fees. On one hand, the Oklahoma
Legislature, by statute, set the 1.25% interest rate and 5% penalty rate on delinquent taxes.33 Those
amounts are thus “expressly prescribed by statute,” which is a clear characteristic of a tax. Further,
Oklahoma statute provides that “[a]ll penalties or interest” imposed by title 68 are recoverable as
a “part of the tax with respect to which they are imposed” and “shall be apportioned as provided
for the apportionment of the tax on which such penalties and interest are collected.”34 By statute,
over 85% of income taxes collected, including interest and penalties on these amounts, are

29 Id. (citations omitted).
30 Hill v. Kemp, 478 F.3d 1236, 1245 (10th Cir. 2007) (quoting Marcus, 170 F.3d at 1311).
31 Id. at 1246.
32 Id. at 1244.
33 See Okla. Stat. tit. 68, § 217(A); Okla. Stat. tit. 68, § 2375(B).
34 Okla. Stat. tit. 68, § 217(G).
deposited in Oklahoma’s General Revenue Fund for appropriation by the Legislature.35 As interest
and penalties collected are ultimately “spread among a wide array of State initiatives,” rather than
used to cover the OTC’s regulatory expenses, the use of these assessments likewise suggest these
are taxes and not regulatory fees.36
On the other hand, as Plaintiffs point out, assessments may serve regulatory purposes when

they “deliberately discourag[e] particular conduct by making it more expensive.”37 This, Plaintiffs
contend, is exactly the function of penalties imposed for late payment of income taxes. Such a
penalty discourages late payment by tacking on an additional 5% penalty in addition to the income
tax already owed.
A decision by the Seventh Circuit supports Plaintiffs’ position on penalties. In RTC
Commercial Assets Trust v. Phoenix Bond & Indemnity,38 the court held that “[s]tates do not assess
penalties for the purpose of raising revenue; they assess them so that delinquent tax debtors will
be deterred the next time around from ignoring their legal obligations.”39 “In a Utopian world
where all citizens fully complied with their obligations,” the court noted, “no penalties at all would
be collected.”40 The court thus concluded that the penalty was not collected to generate revenue,

but were rather a regulatory device and therefore not a “tax” for the purposes of the TIA.41

35 See Okla. Stat. tit. 68, § 2352.
36 See Hill, 478 F.3d at 1245.
37 Edmondson, 594 F.3d at 762 (quoting San Juan Cellular Tel. Co. v. Pub. Serv. Comm’n of P.R., 967 F.2d
683, 685 (1st Cir. 1992).
38 169 F.3d 448 (7th Cir. 1999).
39 Id. at 457.
40 Id.
41 Id.
Several other circuits disagree with the Seventh on this point. For instance, the Fifth Circuit
in Washington v. Linebarger, Groggan, Blair, Pena & Sampson, LLP,42 held that a penalty
imposed for delinquent payment of taxes “is inexorably tied to the tax collection itself, which
sustains the essential flow of revenue to the government.”43 The court noted that the TIA’s
jurisdictional limitation is “not focused on taxes only, but rather on the broader activities of

assessing, levying, and collecting taxes.”44 The Court therefore held that the penalty was a tax and
the TIA applied to bar the exercise of federal jurisdiction.45 Relatedly, the Ninth Circuit likewise
held that penalties assessed for delinquent payment of taxes constitute part of the “tax” under the
TIA.46
The Court concludes that both penalties and interest assessed by the state for the late
payment of income taxes are part of the “tax” for the purposes of the TIA. As noted above, the
touchstone of the inquiry must be the purpose of the assessment. Here, while there is no explicit
statement by the Legislature what the purpose of interest and penalties on late taxes, the ultimate
use to which the funds are put is a strong indicator of purpose. Interest and penalties on late income

taxes in Oklahoma are recoverable “as part of the tax with respect to which they are imposed” and
are apportioned the same as well.47 In practice, this means the interest and penalties largely end
up in Oklahoma’s General Revenue Fund for appropriation by the Legislature. That these

42 338 F.3d 442 (5th Cir. 2003).
43 Id. at 444.
44 Id.
45 Id.
46 Huang v. City of Los Angeles, 637 F. App’x 363, 364 (9th Cir. 2016).
47 See Okla. Stat. tit. 68, § 217(G).
assessments are set out by statute and are ultimately used to fund a wide variety of governmental
programs strongly suggests at least one purpose is revenue collection, as with a “classic tax.”
The Court does not doubt that another purpose of the 5% penalty is, as Plaintiffs contend,
the regulation of taxpayer behavior—specifically, the deterrence against late payment of income
tax. But for the penalty to be a regulatory fee, rather than a tax, regulation must be the “primary

purpose” of the penalty.48 And unlike the Seventh Circuit, the Court does not believe it can be said
that regulation is the primary purpose of the penalty. That court’s conclusion relied on the premise
that “[i]n a Utopian world, where all citizens complied fully with their obligations, no penalties at
all would be collected” and thus “the penalty is not a fee calculated to generate revenues.”49 This
may be true, in a utopian world. But it makes little sense to presume that the Oklahoma
Legislature—or any state legislature, for that matter—is legislating with a utopian state in mind.
Rather, the Oklahoma Legislature likely operates on the understanding that Oklahoma is a society
where, like all societies, some people do not timely comply with their legal obligations.
Anticipating this, the Legislature prescribed a 5% penalty for delinquent payments of state income

tax, and it directed that such penalties be collected and apportioned along with the tax itself. The
penalty is “inexorably tied to the tax collection itself” and is part of the flow of revenue to the state
government’s general coffers, rather than a regulatory fee collected only for the benefit of the
OTC.50 Accordingly, while regulation is one purpose of the penalty, the Court does not find that
it is the primary purpose. The penalty is therefore a “tax” for the purposes of the TIA.

48 See Hill, 478 F.3d at 1244 (emphasis added).
49 RTC Com. Assets Trust, 169 F.3d at 457.
50 See Washington, 338 F.3d at 444.
Up until now, the Court’s discussion has centered around the monetary penalty imposed
by the state’s 5% statutory penalty on late payments of tax owed. Plaintiffs argue this is not the
extent of the penalties they have faced, and that they have been subject to non-monetary penalties
as well. For instance, Plaintiff Nellie Meashintubby represents that she recently received a notice
from OTC that her occupational license with the Oklahoma State Board of Licensed Alcohol and

Drug Counselors may not be renewed if she remains out of compliance with respect to her tax
obligations. This, Plaintiffs contend, is a non-monetary penalty that has no relation to revenue
collection and is therefore a regulatory fee.
Defendants respond that this notice was sent to Ms. Meashintubby in error, and support
this with a declaration from Jennifer Cole, an administrator in the collections division of the OTC.
Ms. Cole avers that her office neglected to place a “protest” indicator on the Meashintubbys’
account, which would indicate that they were deemed “in compliance” with their tax obligations
during the pendency of their protest. Ms. Cole further avers that such an indicator has now been
properly placed on the Meashintubbys’ account. Given this declaration, Plaintiffs do not have

standing to seek prospective injunctive relief regarding the imposition of non-monetary penalties
such as the suspension of a professional license, as those penalties are not “certainly impending”
for Ms. Meashintubby, nor is a “substantial risk” that those penalties will be imposed.51
The interest assessed on the late tax payments, though not yet explicitly discussed by the
Court, is likewise a part of the “tax” under the TIA. Interest represents the government’s

51 Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014) (noting that “[a]n allegation of future injury
may suffice” to establish an injury-in-fact for the purposes of Article III standing only if “the threatened injury is
certainly impending, or there is a substantial risk that the harm will occur.” (internal quotation marks omitted)).
“opportunity cost resulting from the delay in receiving the funds,” and as such is logically part of
the tax itself.52 Plaintiff offers no persuasive reason for finding otherwise.
One last consideration counsels in favor of finding that both penalties and interest are part
of the “tax” under the TIA. The Supreme Court has cautioned that “federal courts must guard
against interpretations of the Tax Injunction Act which might defeat its purpose and text.”53 If the

Court were to hold—as Plaintiffs urge—that interest and penalties were not part of the tax, any
time a taxpayer wishing to challenge a state tax in federal court could simply fail to pay the tax
until interest and penalties were assessed, and then challenge the interest and penalties in federal
court. Though the taxpayer would not be challenging the tax directly, the challenge to interest and
penalties would nevertheless be incompatible with the TIA’s avowed purpose of “permitting states
to ‘define and elaborate their own laws through their own courts and administrative processes
without undue influence from the Federal Judiciary.’ ”54 Such an interpretation would create an
end-run around the TIA. The Court will not interpret the TIA such that its restriction of federal
district court jurisdiction is essentially meaningless.

In sum, the Court concludes that both the interest and penalties assessed against Plaintiffs
by the OTC for their failure to timely pay tax obligations constitute part of the “tax” and the TIA
therefore applies.
3. Declaratory Relief
Plaintiffs seek a declaratory judgment under 28 U.S.C. § 2201 that “the Choctaw
Reservation is Indian country for the purposes of preempting State taxation, including penalties

52 Edmondson, 594 F.3d at 762-63 (citing RTC Com. Assets Trust, 478 F.3d at 457).
53 Farm Credit Servs. of Cent. Arkansas, 520 U.S. at 827.
54 Edmondson, 594 F.3d at 761 (quoting Farm Credit Servs., 520 U.S. at 826).
and interest, upon Plaintiffs’ income.” But the Supreme Court and Tenth Circuit have clearly held
that the TIA’s “broad limitation on federal court interference with state collection of taxes is not
limited to injunctive relief. The Tax Injunction Act bars declaratory relief . . . as well.”55 Plaintiffs
contend the Act does not apply to their request for declaratory relief but offer no support for that
position whatsoever. Nor do they at all engage with the authority that holds the exact opposite.

Accordingly, the Court finds that authority controlling, and considers Plaintiffs request for
declaratory relief to fall within the purview of the TIA as well.
4. Refund of Taxes Paid Under Protest
Finally, Plaintiffs seek a refund of the amount of tax they paid under protest for tax year
2020. Pursuant to Oklahoma statute, an aggrieved taxpayer is permitted to pay taxes under protest,
after notice to the OTC of his or her intention to file suit, and may receive a refund of the tax paid
if the taxpayer prevails.56 But unfortunately for Plaintiffs, the TIA likewise applies to claims
seeking refunds of taxes paid.57
Plaintiffs, at various points throughout their opposition to Defendants’ Motion, seem to

suggest that § 226—the Oklahoma statute that allows an aggrieved taxpayer a right of action—
should inform or even control the Court’s decision as to the applicability of the TIA. They note
that § 226 creates a “right of action in any state or federal court having jurisdiction of the parties
and the subject matter.”58 Because the state itself permits an aggrieved taxpayer to sue in federal
court, Plaintiffs seem to argue that the TIA should not operate to divest the court of subject matter

55 Brooks v. Nance, 801 F.2d 1237, 1239 (10th Cir. 1986) (citing California v. Grace Brethren Church, 457
U.S. 393, 408 (1982)).
56 Okla Stat. tit. 68, § 226.
57 Cities Serv. Gas Co., 656 F.2d at 586.
58 Okla Stat. tit. 68, § 226(c).
jurisdiction since the TIA’s purpose of respecting state sovereignty on matters of state taxation is
satisfied. This is incorrect. “[T]he Oklahoma Legislature obviously cannot usurp Congress’s
prerogative in expanding or contracting the scope of a federal court’s jurisdiction.”59 Further,
§ 226 only permits a right of action in a federal court “having jurisdiction of the parties and the
subject matter.” Section 226 is therefore limited by the scope of federal jurisdiction and

incorporates such limits, like that created by the TIA, in the right of action it permits.
B. The Courts of Oklahoma offer a “plain, speedy and efficient remedy” for tax disputes.
Where, as here, a taxpayer’s lawsuit falls within the scope of the TIA, the Act deprives the
district court of subject matter jurisdiction so long as the state courts offer a “plain, speedy, and
efficient remedy.”60 “If the state provides adequate procedural due process to allow a taxpayer to
raise any constitutional objections, then the state has done all that is required under the Tax
Injunction Act, and as a consequence, the federal courts are foreclosed from hearing such a tax
challenge.”61
Plaintiff does not dispute that the Oklahoma courts offer a “plain, speedy and efficient

remedy” for the resolution of state tax challenges. And the Tenth Circuit has repeatedly held that
Oklahoma courts provide such remedy for aggrieved taxpayers.62 Because Plaintiff provides no
reason why this conclusion as to the ability of the Oklahoma courts to provide a “plain, speedy,
and efficient remedy” for aggrieved taxpayers does not apply to their particular case, the Court

59 Hill, 478 F.3d at 1254 n.19.
60 28 U.S.C. § 1341.
61 Hill, 478 F.3d at 1253 (alteration and quotations omitted).
62 See id. at 1254; Brooks, 801 F.2d at 1240; Cities Service Gas Co. v. Okla. Tax Comm’n, 656 F.2d 584,
587–88 (10th Cir. 1981).
likewise concludes that Oklahoma courts offer such remedy for Plaintiffs here. Accordingly, the
TIA applies to deprive this Court of jurisdiction over the subject matter of Plaintiffs’ instant suit.
IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss for Lack of Subject
Matter Jurisdiction (Doc. 21) is GRANTED.
IT IS SO ORDERED.
This case is now closed.
Dated this 30th day of January, 2023.

ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE

® The Court notes that Defendants also argue that principles of comity support its Motion to Dismiss for
Lack of Subject Matter Jurisdiction. Because the Court finds that the TIA bars its exercise of surisdiction, it expresses
no opinion on whether principles of comity would counsel in favor of the same result.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10385599. Public record. Not legal advice.