Reply Brief for the United States — Tonasket v. Washington

INDEX

Page

EE ier i tan eehoenbdtdeet bweskh 1

RE elite tata ceneiina dite wWlde niche ciktlsty a dd 1

ET ae aa me ee 2

nterest of the United States____._____________- 2

teense cenasiucsnndeuioele 2

i i PO. co esccecesetencb ones 3

\rgument:

I. Public Law 280 does not change state

power to tax within Indian reservations 4

II. It follows that the state may not tax

appellant’s sales to Indians and that the

relief to be granted in this declaratory

judgment suit with respect. to appel-

lant’s sales to non-Indians may well be

affected by recent changes in applicable

state and tribal law__...............- 15

id rudvicke Gwkin ddim hn enn bdabeh’taoke 19

CITATIONS

CASS :

* Choate v. Trapp, 244 U.S. 665.._..---.----- 10

Kansas Indians, The, 5 Wall. 737____.------ 10

Kennerly v. District Court of Montana, 400 U.

etn ail i ulin et tn ee tel Pa 7

Menominee Tribe vy. United States, 391 US.

i iis Lee nip ele staal 5

Metlakatla Indians v. Egan, 369 U.S. 45____- 16

Squire v. Capoeman, 351 U.S. 1_.----------- 10

United States v. Rickert, 188 U.S. 432___.___- 10

Warren Trading Post v. Arizona, 380 U.S.

a aaa cre in del Kkiaherkdni 4, 16, 17

489-928—72——1

II

Statutes and regulations: Page

Act of August 15, 1953, Public Lew 280, 67

Stat. 588, 18 U.S.C. 1162, 28 U.S.C.

PEATE Ee ER MPN 5 enh rg 2, 3, 4, 6, 7, 12

Indian Civil Rights Act of 1968, Act of April

11, 1968, Title IV, 82 Stat. 78, 25 U.S.C.

1321, et seq., amending Public Law 280 2,

4, 6, 11, 12, 13, 14, 15, 17

ee Benin os nicaecvesaaredh- «+ 5, 6

Re oo wenase cede 5, 10, 12

EES ee ear mene Ce 5, 6, 15

de iwntinvceacmnacesha 5, 11, 12

id pewter age t aren 5

ES La ee ene Se 6

Menominee Termination Act, 25 U.S.C. 891-

NE iawn anthhem >= 5

Enacted Laws of Washington, 1957, ch. 240,

del a Bi Ne as A Raa apne” be 12

tee: 66, Be Uae Oe. . ..<-----.5---- 13

ne awcndcadnen — ss 14

EE 16, 17

ae eS Se ee ee 16

EE RE a ana ee 3, 17

RCWA 37.12.010 Legislative History ---...-- 12

te bn Sarath ue oes eamnnde ene 3, 12

Ns i nut ehecectoureconne 12

Ses codon noc nanendvecesesak 12

REE SE Se On oO 12

ais Maia niin bila winin ntadainee? 3

FE iw iit ctnatentoumenehs 3

1972 Session Laws of the State of Washington

2nd Extraordinary Session, 42nd Legisla-

ture, Chapter 157, Sections 6 and 7---.._- 18

—

Miscellaneous:

Hearings before the Subcommittee on Indian

Affairs of the House Committee on Interior

and Insular Affairs, 90th Cong., 2d Sess., on

ar Sa

H. Rep. No. 848, 83d Cong., Ist Sess________

S. Rep. No. 699, 83d Cong., Ist Sess________

Ill

Page

$

$

:

'

3

_ .

Gu the Supreme Court of the Gnited States

OctoBeR TERM, 1972

No. 71-1031

LEONARD TONASKET, APPELLANT

v. ;

THE STATE OF WASHINGTON, ET AL.

ON APPEAL FROM THE SUPREME COURT OF THE STATE OF

WASHINGTON

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

OPINIONS BELOW

The opinion of the Supreme Court of the State of

Washington (J.S8. App. A) is reported at 79 Wash. 2d

607, 488 P. 2d 281. The opinion of the Washington

Superior Court (J.S. App. B) is not reported.

JURISDICTION

On November 15, 1971, the Supreme Court of the

State of Washington entered final judgment affirming

the decision of the State Superior Court (5.8. App.

C). Notice of appeal was filed on December 8, 1971

(J.S. App. D). Probable jurisdiction was noted on

June 12, 1972. 407 U.S. 908. This Court’s jurisdiction

rests on 28 U.S.C. 1257(2).

(1)

| Sn te a A ee ce

2

QUESTION PRESENTED

The United States will discuss the following question:

Whether the assumption by the State of Washing-

ton of criminal and civil jurisdiction within the Col-

ville Indian Reservation under Public Law 280* au-

thorizes the State to tax retail sales made on the

reservation by a member of the Colville Tribe.

INTEREST OF THE UNITED STATES

By. order of April 3, 1972, the Court invited the

Solicitor General to express the views of the United

States in this case. Because of its treaty and trust

obligations to reservation Indians the United States

is interested in protecting such Indians from diminu-

tions, not expressly authorized by Congress, of their

immunities from state taxation. The United States is

also concerned that Public Law 280 be interpreted

so as to effectuate its purpose.

STATEMENT

Appellant is a Colville Indian of full blood, who

owns a store on allotted land held in trust by the

United States in the Colville Indian Reservation in

the State of Washington. His customers are Indian

and non-Indian. App. p. 37.’ In violation of state law,

if it is applicable, appeilant did not obtain a license

? Act of August 15, 1953, 67 Stat. 588, e¢ seg., 18 U.S.C. 1162, 28

U.S.C. 1360. The original Act is set forth at J.S. App. E, pp.

2-5. Public Law 280 was amended by the Indian Civil Rights

Act of 1968, Act of April 11, 1968, Title IV, 82 Stat. 78, et seq., 25

U.S.C. 1321, et seq.

Tho statement by the Supreme Court of Washington that

the “majority are non-Indians” (App. p. 41) does not seem to

be supported by the record. Compare App. p. 37.

Se

— 3

as a retailer of cigarettes nor affix state cigarette

stamps to cigarettes he sold. In February 1967, agents

of the State of Washington entered appellant’s store,

seized the cigarettes he had in stock and arrested him

for violation of the state cigarette licensing and tax

laws.’ App. p. 42. Thereafter, appellant brought this

suit for a declaratory judgment to establish his right

to do business free of regulation or taxation by the

State. The Supreme Court of the State of Washing-

ton, affirming the judgment of the trial court, held

that the Colville Tribe, by submitting itself to the

criminal and civil jurisdiction of the State of Wash-

ington as authorized by Public Law 280 and RCWA

37.12.021, subjected the Tribe and its members to state

sales taxes and business regulations. App. pp. 24-25. Ap-

pellant appealed to this Court, which noted probable

jurisdiction on June 12, 1972. 407 U.S. 908.

SUMMARY OF ARGUMENT

1, Public Law 280 did not change state powers of

taxation within Indian reservations. It was enacted

primarily to improve the administration of criminal

and civil justice within certain Indian reservations by

making state courts and state law enforcement avail-

able to the Indians who live there. In authorizing the

application of state substantive law within these

reservations, the Act provided broad exemptions

assuring that Indian tax immunities and the trust

status of Indian lands would remain unchanged and

that federal statutes concerning the use of reservation

land would remain in effect. The legislative history

*RCWA 19.91.120; RCWA 82.32.0380; RCWA_ 82.24.050.

— aie: Ne ene

4

of the statute shows that Congress chose not to subsi-

dize States which might choose to assume the jurisdic-

tion provided by Public Law 280 by conferring new

taxing powers or by direct subsidy. And the purpose

of the statute would be frustrated by freighting a

tribe’s decision to make use of state courts and law

enforcement with a tax consequence unintended by

Congress.

2. Applying these principles to the present case, it

follows that the State has no authority to tax appel-

lant’s sales to Indians. Warren Trading Post v. Ari-

zona Tax Commission, 380 U.S. 685. The question of

the State’s authority to tax appellant’s sales to non-

Indians is less clear. Moreover, since the decision be-

low, Washington has enacted a new law permitting

certain tax-free sales by Indians to non-Indians and

the Colville Tribe has passed an ordinance reflecting

that law. These changes in the applicable law may well

affect the relief to be granted in this suit for a declar-

atory judgment.

ARGUMENT

.

PUBLIC LAW 280 DOES NOT CHANGE STATE POWER TO TAX

WITHIN INDIAN RESERVATIONS

1. Public Law 280, 67 Stat. 588, as amended, 18 U.S.C.

1162, 28 U.S.C. 1360, now 25 U.S.C. 1321-1326, is en-

titled “An Act to confer jurisdiction * * * [on certain

States] with respect to criminal offenses and civil causes

of action committed or arising on Indian reservations

within such States * * *.’’ It provides that certain States

Shall have “jurisdiction over offenses committed by or

— 5

against Indians in * * * Indian country * * * to the same

extent that such State has jurisdiction over offenses

committed elsewhere within the State * * *.’’ It further

provides that “the criminal laws of such State shall have

the same force and effect * * * as they have elsewhere

within that State.” As to civil jurisdiction, the Act pro-

vides that certain States shall have “jurisdiction over

civil causes of action between Indians or to which In-

dians are parties which arise in * * * Indian country

[within such States] * * * to the same extent that such

State has jurisdiction over other civil causes of action,

and those civil laws of such State that are of general ap-

plication to private persons or private property shall

have the same force and effect within such Indian

country as they have elsewhere within that State.’’ 25

U.S.C. 1821(a); 1322(a). Each of these grants of

jurisdiction, however, is followed by an extensive pro-

viso prohibiting among other things the alienation or

taxation of trust property whether real or personal or

the regulation of such property in a manner inconsist-

ent with any federal treaty, agreement, statute or regu-

lation. 25 U.S.C. 1321(b); 1322(b). The Act also

preserves the authority of tribal ordinances and cus-

toms “‘if not inconsistent with any applicable civil law

of the State * * *.” 25 U.S.C. 1322(c) (emphasis sup-

plied). The Act is thus quite different from termina-

tion legislation which ends federal supervision over a

tribe and terminates the benefit of federally provided

tax exemptions. Compare 25 U.S.C. 891-902 (the Men-

ominee Termination Act), especially 25 U.S.C. 898, 899.

See also Menominee Tribe v. United States, 391 U.S.

404.

489-928—72——-2

—s re ees

The Act originally applied only within the States

of California, Minnesota, Nebraska, Oregon and Wis-

consin, but it permitted other States, by subsequent

affirmative action, also to assume jurisdiction under

its provisions. The consent of the Indians affected was

not required. Public Law 280, Sections 6 and 7. See

J.8. App. E, p. 5. In 1968, the Act was amended to

provide that thereafter a State could assume the ju-

risdiction authorized by the Act only ‘‘with the consent

of the * * * tribe oceupying the particular Indian eoun-

try”’ affected, in the form of a majority vote of the en-

rolled adult Indians affected. 82 Stat. 78, et seq., 25

U.S.C. 1321(a), 1322(a), 1326.

The House Report on H.R. 1063, which became

P.L. 280, speaks of the bill as part of a series of meas-

ures withdrawing federal responsibility for Indians

(H. Rep. No. 848, 83d Cong., Ist Sess., p. 3; 8. Rep.

No. 699, 83d Cong., Ist Sess. p. 3),‘ but makes it

clear that Public Law 280 itself is a more modest solu-

tion to a more specific problem, the inadequacy of

law enforcement and of the adjudication of civil con-

flicts in some areas of Indian country (H. Rep.,

supra, p.6) :

As a practical matter, the enforcement of

law and order among the Indians in the In-

dian country has been left largely to the Indian

groups themselves. In many States, tribes are

not adequately organized to perform that fune-

tion; consequently, there has been created a

hiatus in law-enforcement authority that could

*The House Report was adopted by the Senate Committee

as ite report as well. References are to the House Report.

eciiatbentiietins

|

7

best be remedied by conferring criminal juris-

diction on States indicating an ability and wil-

lingness to accept such responsibility.

Similarly, the Indians of several States have

reached a stage of acculturation and develop-

ment that makes desirable extension of State

civil jurisdiction to the Indian country within

their borders. Permitting the State courts to

adjudicate civil controversies arising on Indian

reservations, and to extend to those reserva-

tions the substantive civil laws of the respective

States insofar as those laws are of general ap-

plication to private persons vr private prop-

erty, is deemed desirable.

That the Act was considered primarily an authori-

zation of state court jurisdiction, and not an abolition

of federal supervision of Indians or the ending of In-

dian tax immunities, is also suggested by this Court’s

reference to the Act in Kennerly v. District Court of

Montana, 400 U.S. 423, as an “‘extension of state juris-

diction over civil causes of action by or against In-

dians arising in Indian country”’ (id. at 427) and the

Court’s reference to the 1968 amendments as “‘a new

regulatory scheme for the extension of state civil and

criminal jurisdiction to litigation involving Indians

arising in Indian country’’ (id. at 428).

Moreover, there is no indication in the committee

reports or debates on the bill that Congress intended

the Act’s conferral of civil and criminal jurisdiction

to extend the States’ power to tax Indians, although

if this were intended it would have been a matter of

sufficient importance to evoke discussion within Con-

gress and opposition from the tribes. To the contrary,

the Act’s legislative history affirmatively shows that

Congress intended not to subsidize the States for exer-

cising criminal and civil jurisdiction within reserva-

tions, either by federal payment or by authorizing in-

creased taxation of Indians. In the hearings before the

House Subcommittee on Indian Affairs on J une 29, 1953,

the substitute bill which had been prepared by the Bu-

reau of Indian Affairs and which became Public Law

280 was discussed by Mr. Sellery of the Bureau of Indian

Affairs and Congressman Young of Nevada. After

Congressman Young asked whether under the sub-

stitute bill the States would be subsidized, the follow-

ing colloquy occurred.*

Mr. Sellery. * * * Generally, the Department’s

views are that if we started on the processes of

Federal financial assistance or subsidization of

law enforcement activities among the Indians, it

might turn out to be a rather costly program, and

it is a problem which the States should deal with

and accept without Federal financial assistance;

otherwise there will be some tendency, the De-

partment believes, for the Indian to be thought

of and perhaps to think of himself because of

the financial assistance which comes from the

Federal Government as still somewhat a mem-

ber of a race or group which is set apart from

*The records of this hearing are in the National Archives

and are not available without the approval of the House

Committee on Interior and Insular Affairs. With the approval

of the counsel of the Committee we are lodging a transcript

of the pertinent part of the hearings with the Clerk and we

are transmitting copies to the parties and amici.

eee oe

9

other citizens of the State. And it is desired to

give him and the other citizens of the State the

feeling of a conviction that he is in the same

status and has access to the same services, includ-

ing the courts, as other citizens of the State who

are not Indians.

Mr. Young. That would not quite be true,

though; would it? Because for the most part

he does not pay any taxes.

Mr. Sellery. No. There is that difference.

Mr. Young. A rather sizable difference in not

paying for the courts or paying for the increased

expenses for judicial proceedings.

Mr. Sellery. The Indians, of course, do pay

other forms of taxes. I do not know how the courts

of Nevada are supported financially, but the In-

dians do pay the sales tax and other taxes.

Mr. Young. But no income tax or corporation

tax or profits tax. You understand a large por-

tion of the land is held in trust and therefore is

not subject to tax.

Mr. Sellery. That is correct.

Mr. Young. So far as my State is concerned,

it would be a large burden on existing costs of

judicial procedure. I think it is only right that

the Federal Government should make some con-

tribution for that. You seem to differentiate. I

think there is a differentiation, too, in that they

are not paying taxes.

Mr. Sellery. I will concede your point that

they are not paying taxes. The Department has

recommended, nevertheless, that no financial as-

sistance be afforded to the States.

[Daily transcript of Hearing pp. 8-10].

10

The lack of compensation for States assuming the

new jurisdiction was again referred to in the hearings

before the full committee on July 15, 1953:

Mr. Abbott. * * * The other states not included,

such as Mr. Young’s state, Nevada, have indi-

cated unwillingness and they have good rea-

sons, I believe * * *. [p. 7]

* * * * +

Mr. Young. Mr. Chairman, did you say Ne-

vada. I object to Nevada, because only 15 per-

cent of our state is owned by the state and 85

percent is owned by the Federal Government.

Mr. D’Ewart. All right, California, Minne-

sota, Nebraska, Oregon, and Wisconsin. Wash-

ington is also excluded. [p. 17]

Thus, the clear (though never precisely stated) pre-

mise for the Act’s conferral of jurisdiction directly

on certain named States whose representatives did

not object, while authorizing optional assumption of

jurisdiction by other States, was that no addition to

state revenues would result from exercise of juris-

diction under the Act. This premise is partially re-

flected in the Act’s provisions specifically assuring

that Indian property tax immunities shall not be

affected : °

Section 2: (b) [25 U.S.C. 1321(b)] Nothing

in this section shall authorize the alienation,

encumbrance, or taxation of any real or per-

*Indian tax immunities result largely from the trust status

of Indian land and treaties reserving such land. Squire v.

Capoeman, 351 U.S. 1; United States v. Rickert, 188 U.S. 482; The

Kansas Indians, 5 Wall. 737. They are to be liberally construed in

favor of immunity and against implied repeal. Choate v. Trapp,

224 U.S. 665, 675.

| 11

sonal property, including water rights, belong-

ing to any Indian or any Indian tribe, band,

or community that is held in trust by the

United States or is subject to a_ restriction

against alienation imposed by the United

States; or shall authorize regulation of the use

of such property in a manner inconsistent

with any “ederal treaty, agreement, or statute

or with any regulation made pursuant thereto;

or shall deprive any Indian or any Indian tribe,

band, or community of any right, privilege, or

imm) aity afforded under Federal treaty, agree-

ment, or statute with respect to hunting, trap-

ping, or fishing or the control, licensing, or

regulation thereof [emphasis added].

Section 4: (b) [25 U.S.C. 1322(b)] Nothing

in this section shall authorize the alienation,

encumbrance, or taxation of any real or per-

sonal property, including water rights, belong-

ing to any Indian or any Indian tribe, band,

or community that is held in trust by the United

States or is subject to a restriction against

alienation imposed by the United States; or

shall authorize regulation of the use of such

property in a manner inconsistent with any

Federal treaty, agreement, or statute or with

any regulation made pursuant thereto; * * *

{emphasis added].

While the Act thus specifically refers to property

taxation (the most prominent, but not the only, area

of Indian tax immunity), these provisos are, in our

view, merely illustrative of the general understanding

_ expressed in the legislative history that Public Law

- 280 would not affect state power to tax Indians.

Piatt D- a

12

2. Indeed, it would tend to frustrate the purpose of

Public Law 280, as amended, if tax consequences were

to be appended to an election by a tribe to come under

state criminal and civil jurisdiction. This is illustrated

by the facts of this case.

Washington is not one of the States named in Pub-

lie Law 280 for immediate conferral of jurisdiction. In

1957, Washington enacted a law purporting to

assume over Indian country within the State all juris-

diction permitted by Public Law 280. Enacted Laws

1957, ch. 240, sec. 1, p. 941; see RCWA 37.12.010 Leg-

islative History. This law was amended in advance

of the 1968 amendment to Public Law 280 to provide

that without Indian consent the State would have

jurisdiction within reservations over certain subjects

(restricted largely to family relations and motor vehi-

cle registration), but that to reach the full extent of

jurisdiction permitted by Public Law 280 the consent

of the tribe would be required. RCWA 37.12.010,

37.12.021.’ The amendment repeated the limitations of

Sections 2(b) and 4(b) of Public Law 280 (see pp. 10-11

supra) and further provided that the Washington Act

shall be subject to the limitations of the federal Act.

RCWA 37.12.060, 37.12.070, 37.12.050.

On January 13, 1965, in accordance with the Wash-

ington Act, the Colville Tribe adopted a resolution

requesting the State to assume criminal and civil

jurisdiction within the reservation, and the governor

of the State issued a proclamation under ROCWA

37.12.021 assuming such jurisdiction (J.S. App. Ap. 5).

7 We do not comment here on the validity of partial assump-

tions of jurisdiction prior to the 1968 amendments to Public

Law 280.

-_- »

There is nothing to indicate that the State in making

its judicial process available to the Tribe or the Tribe

in choosing to submit to it believed that the Tribe and

its members were thereby assuming additional tax

burdens. If the Tribe had suspected that in submitting

its members to state jurisdiction it thereby subjected

them to state taxation in areas previously immune, it

might well have refused to submit to state jurisdiction.

Moreover, since the 1968 amendment to Public Law

280 requires a majority vote of the enrolled adult

Indians before a tribe can submit to state jurisdiction

(see p. 6. supra), the imposition of state taxes as a

consequence of that choice would, throughout the

nation, seriously discourage any further elections in

favor of state jurisdiction under Public Law 280. This

could be particularly unfortunate because the poorest

tribes, which often are most in need of state judicial

services, can least afford increased taxation. Thus, the

statutory purpose, as well as the legislative history

previously discussed, supports our view that Public

Law 280 has no tax consequences.

3. Our view of the congressional intent is reason-

able with respect to the States as well as to the tribes.

Merely because a State undertakes to provide judicial

services within an Indian reservation, it does not fol-

low that fairness requires that it also be given new

taxing authority within the reservation. The States

already have substantial sources of income attribut-

able to Indians. Without requiring any particular

service from the States, Congress has since 1924 per-

mitted them to tax Indian mineral holdings, 42 Stat.

244, 25 U.S.C. 398, which have often been the only

substantial wealth on land noted for its poverty.

14

Though it is of less significance, Congress has also,

without requiring any specific service for the Indians,

allowed State gasoline and motor fuel taxes to be im-

posed on all sales within Indian reservations. 4 U.S.C.

104, 109. Moreover, a substantial part of the goods

purchased by Indians living within a reservation are

ordinarily purchased outside the reservation where

the purchases are subject to state sales taxes with-

out regard to the substantiality of services rendered

the purchaser by the State.

Additionally, the Indians subject to state jurisdiction

under Public Law 280 remain the beneficiaries of all

federal programs for Indian development that would

otherwise be available except those concerning crime

prevention and law enforcement. Considerable sums

are annually expended by the federal government on

such programs for tribes which have become subject

to state criminal and civil jurisdiction. The Bureau

of Indian Affairs, for example, expended $14,072,394

during fiscal year 1971 in California,’ although Pub-

lie Law 280 subjected all Indian country within

that State to state criminal and civil jurisdiction. The

only major category of assistance omitted is ‘‘main-

taining law and order.” These and other programs

substantially reduce state responsibilities for provid-

ing services to reservation Indians and justify im-

munities from state taxes which would siphon off

resources supplied by the federal government for the

* Report of expenditures in fiscal year 1971 from budget sub-

mission for fiseal year 1973, supplied to us by the Department

of the Interior.

eNO No ae

es

SS

ABS NE APES TA WRK 6 Se SRR ers aE De

—

benefit of the Indians and income earned by the In-

dians who remain on reservations and under federal

protection.

It was thus not unreasonable and certainly withiu

Congress’ authority in enacting Public Law 280 to

choose not to give additional taxing power to States

which elect to make their judicial process available

to reservation Indians.

15

II

IT FOLLOWS THAT THE STATE MAY NOT TAX APPELLANT’S

SALES TO INDIANS AND THAT THE RELIEF TO BE GRANTED

IN THIS DECLARATORY JUDGMENT SUIT WITH RESPECT

TO APPELLANT’S SALES TO NON-INDIANS MAY WELL BE

AFFECTED BY RECENT CHANGES IN APPLICABLE STATE

AND TRIBAL LAW

1. The appellant is a full-blooded enrolled member

of the Colville Confederated Tribe. His store is located

on the Colville Reservation. A portion of his sales

are to Indian residents of the reservation. Public

Law 280 does not end federal supervision of trading

with Indians on Indian reservations.’ It makes state

civil laws applicable within the reservation only if

they are “of general application”? (25 U.S.C. 1322(a))

*The Department of the Interior has interpreted Public

Law 280, which it primarily drafted, as not ending its super-

vision of trading with Indians on reservations subject to the

Act. Although traders have not been licensed for the Colville

reservation, we were incorrect in stating in our prior memoran-

dum in this case that licenses had not been required in the

State of Washington. See Memorandum pp. 3, 7, 8. In fact, traders

havo been licensed for the Quinault and Quileute Reservations,

beth of which are subject to State jurisdiction under Public Law

280,

a

16

and thus leaves unchanged the established principle

that federal law pre-empts state regulations designed

to meet the particular problems of Indian trading.

See Warren Trading Post v. Arizona Tax Commis-

sion, 380 U.S. 685, 690-692. Moreover, as this Court

stated in Metlakatla Indians v. Egan, 369 U.S. 45, 56

“Public Law 280] expressly protects against state in-

vasion all uses of Indian property authorized by federal

treaty, agreement, statute, or regulation * * *.” See

pp. 10-11, supra.

Because the appellant is a full-blooded Indian, he

cannot be required to have a license to trade with In-

dians. 25 U.S.C. 264. He is, however, a person residing

on an Indian reservation trading therein within the

meaning of 25 U.S.C. 264.° In Warren Trading Post

v. Arizona, supra, this Court invalidated the imposi-

tion by the State of Arizona of a gross income tax

even on a non-Indian licensed by the federal gov-

ernment to trade on the Navajo Reservation, at least

insofar as the tax was applied ‘‘with respect to

sales made to reservation Indians on the reserva-

tion * * *” (380 U.S. at 691-692). The Court held

that ‘‘* * * the assessment and collection of this tax

would to a substantial extent frustrate the evident

congressional purpose of ensuring that no burden shall

be imposed upon Indian traders for trading with In-

dians on reservations except as authorized by Acts of

Congress or by valid regulations promulgated under

those Acts.’’ 380 U.S. at 691. If the Court agrees with

1° For the federal regulations concerning trade with Indians

on Indian reservations, see generally 25 C.F.R. 251.1-251.26.

ey ar oo

RL erp Rrra ry ate pee

atl anki tech tg teint Mita Nt i, oct tbe

17

our submission (point I, supra) that state power to tax

is unchanged by Public Law 280, it follows that the

taxes of the State of Washington at issue in this case

are invalid insofar as they apply to sales to Indians

residing on the Reservation.

2. Appellant contends that his sales to non-Indians

are also exempt from state taxation. We express no

view on this issue, but wish to point out certain con-

siderations that may be of assistance to the Court.

a. Ordinarily Indian traders are not required to

distinguish between sales to Indians and sales to non-

Indians. The trading posts are in Indian country and

are under federal supervision as to all sales. It would

be an unwarranted administrative burden to require

them to operate under a dual system of licensing and

sales. Here the factual situation is peculiar because

appellant’s sales to non-Indians are a major part of

his activity. And, apparently, a major part of those

sales are of cigarettes—a product in no way connected

with reservation production or manufacture.

b. This is a suit for a declaratory judgment setting

forth the appellant’s right to do business free of state

licensing “ or taxation. Since the decision below, there

"The State’s requirement of a license for selling cigarettes

(R.C.W.A. 19.91.120) appears to be a civil regulatory law of gen-

eral application. If, as also appears, its only regulatory purpose is

to assist in administering the State’s revenue laws, the validity of

its application to appellant’s sales to non-Indians would in our

view be dependent on the issue of the validity of the applica-

tion of the taxes at issue here to those sales. Under 25 U.S.C.

264 and Warren Trading Post (both discussed supra, p. 16),

the State cannot impose a licensing requirement with respect

to appellant’s sales to Indians.

a

18

have been two significant changes in the state and tri-

bal laws affecting the appellant which have an impor-

tant bearing on state taxation of appellant’s sales to

non-Indians, but which have not been considered by

the courts below:

(1) On February 28, 1972, the State of Washing-

ton amended its laws concerning the taxation of cig-

arettes to permit Indians such as the appellant to

possess unstamped cigarettes and to permit residents

of the State to buy up to 400 cigarettes (two cartons)

at any time without incurring state tax liability. 1972

Session Laws of the State of Washington, 2nd Extra-

ordinary Session, 42nd Legislature, Chapter 157, Sec-

tions 6 and 7 (pp. 522-523) (reprinted in Appellant’s

Brief, pp. A-39 to A-41). See also the governor's

message vetoing a portion of the law that might have

required the State to approve Indian sellers. Jd. at

523-525 (Appellant’s Brief, pp. A-41 to A-48).

(2) In apparent cooperation with this change in

state law, the Colville Tribe has passed an ordinance

restricting sales of cigarettes to non-Indians to two

cartons at any time. Appellant’s Brief, pp. A-23

to A-28. Resolution 1972-375 enacted by the Colville

— :

19

Business Council June 23, 1972, approved by the

Secretary of the Interior, October 25, 1972, to appear

in the Federal Register. Thus, while the issues in this

case apparently remain alive with respect to past sales

to non-Indians, a quite different situation may now

exist with respect to more recent and future sales.

These changes in the applicable law are relevant to

the relief to be granted in the present suit for a

declaratory judgment.

CONCLUSION

For the foregoing reasons, the judgment of the

Supreme Court of the State of Washington should be

reversed and the case remanded for further con-

sideration.

Respectfully submitted.

ERWIN N. GRISWOLD,

Solicitor General.

KENT FRIzzELL,

Assistant Attorney General.

Harry R. SacHse,

Assistant to the Solicitor General.

EpMuNb B. CLarK,

Attorney.

NOVEMBER 1972.

U.S. GOVERNMENT PRINTING OFFICE: 1972