Dealers in Mississippi plan to end opposition to a Ford-Lincoln-Mercury franchise license granted to a Native American tribe.
The dealers are abandoning the effort because the Mississippi Band of Choctaw Indians agreed to various concessions, including the collection of state sales tax, said Kevin Watson, a lawyer representing the dealers.
Dealers face an Aug. 11 deadline to file a legal appeal in Mississippi state court challenging the franchise license granted to the Choctaws to operate Frontier Ford-Lincoln-Mercury in Carthage, Miss. No appeal is planned, Watson said.
In April, 160 of the 200 dealers in the Mississippi Automobile Dealers Association began fighting the license issuance unless the tribe agreed to pay the same taxes as other dealers. As a sovereign nation, the Choctaw band can avoid various state, local and federal taxes. The dealers cast the dispute as a national test, arguing that tribes could buy dealerships in many states, just as they have acquired casinos.
"We got most of the concessions we were looking for," Watson said.
Under an agreement reached with the Mississippi Motor Vehicle Commission, the Choctaws will collect and remit Mississippi's 5 percent sales tax on vehicles and 7 percent tax on parts and service, Watson said.
The band also will pay property taxes on the dealership to Leake County. But the dealership will be exempt from federal income taxes under its tribal ownership.
The Choctaws agreed to a limited waiver of sovereign immunity, enabling the Mississippi Motor Vehicle Commission to regulate the dealership and allowing customers to pursue litigation in state court as well as tribal court, Watson said.
Dealers now have "a wait-and-see attitude," said Bill Lehman, president of the Mississippi Automobile Dealers Association. "There are some gray areas."
Dealers will seek redress before the Mississippi Motor Vehicle Commission if the tribe decides to petition the U.S. Bureau of Indian Affairs to grant in-trust land status for the dealership property, Lehman said. Under federal law, such property is treated as reservation land and is not subject to state jurisdiction.
The reservation of the 8,000-member band is in Neshoba County, about 35 miles from Frontier Ford-Lincoln-Mercury.
The Mississippi Band of Choctaw Indians owns 13 businesses with an annual payroll of more than $123 million, according to the tribe's Web site.