Petition — Ute Indian Tribe v. State Tax Commission
Supreme Court brief1978
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IN Tilk
Supreme Court of the United States
OCTOBER TERM 1978
THE UTE INDIAN TRIBE,
Petitioner,
vs.
THE STATE TAX COMMISSION OF UTAH,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
F. BURTON HOWARD
STEPHEN G. BOYDEN
SCOTT C. PUGSLEY
1000 Kennecott Building
10 East South Temple
Salt Lake City, Utah 84133
Telephone : (801) 521-0800
Attorneys for Petitioner
—
INDEX
Page
Cee On Se WOON ce 1
Pp EL A AE ARR RS I ee 2
ESE RT OTT a 2
Constitution and statutes involved —..........-........-:ceseeeeeeeee 3
een ae Te GE ni hia et ns 3
meastas for granting the writ ._.__........................... 7
a a RE et a or eae eee ym) Caen ee 19
Appendix A — Opinions and judgment below ................ A-1
I. Findings, conclusions and order of
ee I III diicttenscciscniestninmenecipantitelieiand A-l
II. Opinion of Court of Appeals .......................-..-. A-15
III. Order denying Petition for Rehearing .......... A-15
CITATIONS
Appendix B — Constitutional provisions and statutes..A-21
CASES
Bryan v. Itasca County, 426 U.S. 373 (1976).................... 7
DeCoteau v. District County Court, 420 U.S. 425 (1975).. 18
E. C. Olsen v. State Tax Commission, 109 Utah 563,
a SE eee ee 13
H. Hackford & Co. v. United States, 197 U.S. 442 (1905).. 16
Kelley v. Rhoads, 188 U.S. 1 (1902) .............-escescesseeceseeees 16
Kennerly v. District Court of Montana,
Gp Ue, Ge CATE) 3, 9
McClanahan v. State Tax Commission,
A IC I CU chip etccicietne 7
INDEX — (Continued)
Page
Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973).... 10
Moe v. Confederated Salish and Kootenai Tribes,
Sr A CI ciattiecdnha su ccnctneaiieisiinervainninsnneheusbiovinieta 5, 6
Ogden Union Railway and Depot Co. v. State Tax
Commission, 16 Utah 2d 23, 395 P.2d 57 (1964)........ 14
Santa Clara Pueblo v. Martinez,46U.S.L.
Week 4412 (U.S. May 15, 1978) .....................-scesceseeeeees 7
Union Stock Yards v. State Tax Commission of Utah,
Se Tt EU, Fk cae te CRIED anccancscv es cvesseneescccecoeeess 13
United States v. Wheeler, 46 U.S.L. Week 4243
RX _. RIPPERS eremerrcoerry oats soeener re Om 7
Warren Trading Post v. Arizona Tax Commission,
BE Be ec dicclietetbitecetinrecontinninpiesetincnndindzoens 8
W. F. Jensen Candy Co. v. State Tax Commission,
90 Utah 359, 61 P.2d 629 (1936)..................-..-ccccesseceesee 13
Williams v. Lee, 358 U.S. 217 (1959).....................----ececeeees 7
Constitutional Provisions
Federal Constitution, Art. I, Sec. 8 ...................-:-::-e0esee0- 3
Ces: GE SPRUE, BE, BIB nictenicce crs ncsetsvesitoncntoconipeincinnnnins 3
Statutes and Other Authorities
United States Code:
25 U.S.C. § 261 Rr eee Tere 8
ob O04 OO nk el 10
WUBO 6 lic Seo eae 3, 10
OE 6S... cin ccniemenrnauaniacecamuatan 5
i SU 6 nn ce ee 3
INDEX — (Continued)
Page
Ie RP 3, 10
hc RR RE Ore SA ND 9
ey 10
Oe ny ish cc clsisincome 2
I RG Te A debs c tasedeccSactinedatanesnsinid daeencdeiddoaniee 5
rT si cemineniae 5
Utah Enabling Act (28 Stat. 107) .........cecccccccceceeececeeseeees 11
Utah Code Annotated, 1953, as amended
a 12
i ee Ss na THRE Ree Na 12
I NIE Bigiicsaskcs stich GAlcpheninicbacaleincbes Rec inidlsasticasann 12
II CO ica 14
I I ee a eA 5, 12
55 I.D. (Decisions of the United States Department
FM FERRE ew Oe A 11
— it i
IN THE
Supreme Court of the United States
OCTOBER TERM 1978
THE UTE INDIAN TRIBE,
Petitioner,
vs.
THE STATE TAX COMMISSION OF UTAH,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
Petitioner, the Ute Indian Tribe, respectfully prays
that a writ of certiorari issue to review the opinion of
the United States Court of Appeals for the Tenth Circuit
entered in this proceeding on February 17, 1978, reversing
and remanding the judgment of the United States District
Court for the District of Utah dated February 25, 1976.
OPINION BELOW
i The opinion of the Court of Appeals, not yet reported,
appears in Appendix A. The Order denying the Petition
for Rehearing, and the Findings of Fact, Conclusions of
Law and Order rendered below by the United States
District Court for the District of Utah also appear in
Appendix A.
2
JURISDICTION
The judgment of the Court of Appeals for the Tenth
Cireuit was entered on February 17, 1978. A timely peti-
tion for re-hearing was denied on June 2, 1978, and this
petition for certiora:i was filed within 90 days of that
date. This Court’s jurisdiction is invoked under 28 U.S.C.
§1254 (1).
QUESTIONS PRESENTED
1. Whether the respondent Tax Commission hag jur-
isdiction to impose Utah sales tax on sales by the Ute
Tribe on trust lands and elsewhere in Utah, where the
tax in question is a transaction tax, the incidence of which
falls equally on both buyer and seller and where the tribe
also has a valid sales tax ordinance taxing the identical
sales by the tribe. :
2. Whether the summary collection and enforcement
procedures used against the Ute Tribe by the Tax Com-
mission below, which included docketing a warrant against
tribal trust property, constitute unreasonable interfer-
ence with the internal affairs and right of self determi-
nation of the Tribe on its reservation.
3. Were the District Court’s findings that the peti-
tioner’s federally recognized Indian reservation continues
to exist within its original reservation boundaries clearly
erroneous, as determined by the Court of Appeals, in
light of the fact that such findings were supported by
competent evidence received at trial, without opposing
evidence being offered, and in light of the presumption
of continued reservation existence absent clear, unambig-
uous proof to the contrary.
SP nee
3
CONSTITUTIONAL PROVISIONS AND
STATUTES INVOLVED
The case directly involves Article I, Section 8, Clause
3 of the Constitution of the United States; Article ITI,
Constitution of Utah; the Utah Enabling Act (Act of
July 16, 1894; 28 Stat. 107), Section 3; 25 U.S.C. § 476;
25 U.S.C. § 1322; and Title 59, Chapter 15, Utah Code
Annotated (1953) Sections 2 (h), 4, 5, 8 and 11, all of
which are printed in Appendix B.
STATEMENT OF THE CASE
Petitioner, the Ute Indian Tribe (herein referred to
as the ‘‘Tribe’’ or ‘‘Ute Tribe’’), is a federally recog-
nized‘ American Indian Tribe exercising powers of self-
government*® on the Uintah and Ouray Indian Reserva-
tion in the State of Utah.* The Ute Tribe has never, by
agreement or otherwise,‘ submitted to the jurisdiction of
the State of Utah pursuant to 25 U.S.C. § 1321 et seq., for
the purposes of taxation or otherwise.°
Utefab, Ltd., at all times relevant herein, was a wholly-
owned economic enterprise of the Ute Tribe established
to provide employment for, and develop work skills in,
members of the Tribe. It was engaged in the business
of producing cabinetry and millwork at its plant on trust
lands on the Uintah and Ouray Reservation.°
1App. A, Finding of Fact No. 4.
2App. A, Finding of Fact Nos. 6 and 7.
SApp. A, Finding of Fact Nos. 5 and 6.
*See 25 U.S.C. §1321 et seq.; Kennerly v. District Court of Montana, 400
US. 423 (1971).
®App. A, Finding of Fact No. 9.
*App. A, Finding of Fact No. 10.
4
The Ute Tribe is organized’ under a tribal Constitu-
tion and Bylaws* which establish a Tribal Business Com-
mittee empowered, inter alia, to promulgate and enforce
tax ordinances, to levy taxes and license fees within its
reservation, and to regulate trade upon the reservation.°
The Ute Tribe’s Tribal Business Committee adopted
an ordinance, effective January 1, 1974, which provides
for the taxation of sales to or by Indians within the ex-
terior boundaries of the Tribe’s reservation’? Prior to
that time, Utefab had collected Utah sales taxes and had
prepared and filed Utah sales tax returns with respond-
ent State Tax Commission of the State of Utah (herein
referred to as the ‘‘Tax Commission’’ or the ‘‘Commis-
sion’’), for sales occurring during the period January 1,
1971, through December 31, 1973. Such sales were made
at the tribal plant on trust land within the reservation
to both Indian and non-Indian purchasers with’ delivery
taken both on trust and non-trust lands within the Tribe’s
reservation, as well as outside of the reservation.”
In March of 1974, the Tribe made demand upon the
Tax Commission for the return of said sales tax remit-
tances by means of a formal application and claim for
a refund. The Tax Commission refused to refund any
of the money so collected.’* While such claim for a re-
fund was pending the Tax Commission docketed a war-
rant for delinquent sales tax remittances against the Tribe
7See 25 U.S.C. §476.
SApp. A, Finding of Fact Nos. 6 and 7.
*App. A, Finding of Fact No. 7.
10App. A, Finding of Fact No. 8.
MApp. A, Finding of Fact Nos. 11, 12 and 13.
12App. A, Finding of Fact No. 16.
~~,
ed
5
and its real and personal property."* Under Utah law,”
such a warrant has the legal effect of an execution upon
the personal property of the Tribe and becomes a lien
in the nature of a docketed judgment upon the real prop-
erty of the Tribe, all of which real property is held in
trust for the Tribe by the United States of America."
Following the docketing of said warrant against the
Tribe and its real and personal property, the Tribe in-
stituted this action for declaratory and injunctive relief
against the Tax Commission and for the return of the
State sales tax proceeds remitted by the Tribe to the
Tax Commission. Sometime after the filing of a com-
plaint in the Utah Federal District Court, the Tax Com-
mission released the warrant.’* Jurisdiction in the District
Court was predicated upon 28 U.S.C. § 1331 (Federal
Question) and 28 U.S.C. § 1362 (Actions by Indian
Tribes. )*’
Following trial to the court without a jury, the Dis-
trict Court made éxtensive Findings of Fact and Conclu-
sions of Law’* and, based thereon, determined, inter alia,
that the Tribe’s tax ordinance was valid. The District
Court further enjoined the Tax Commission from col-
lecting sales and use taxes on sales by the Ute Tribe or
by or to Indians within the Ute Tribe’s reservation and
ordered certain Utah sales tax proceeds collected and
paid by Utefab refunded to the Tribe.
18App. A, Finding of Fact No. 17.
14§ 59-15-11, U.C.A., 1953, appended hereto as part of Appendix B.
15App. A, Finding of Fact No. 18; See Appendix B § 59-15-11 U.S.C. 1953.
Congress has expressly provided for the continuation of Federal Restrictions on
the property of the Ute Indian Tribe. See 25 U.S.C. § 677 et seq.
16App. A, Finding of Fact Nos. 1, 2, 3 and 19.
11See Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463 (1976).
18 Appendix A.
6
Following entry of this judgment, the Tax Commis-
sion sought to reopen the case to challenge the District
Court’s findings regarding the boundaries and status of
the Tribe’s reservation and for the first time, to present
evidence in relation thereto. All such motions were denied
by the District Court, following which the Tax Commis-
sion perfected an appeal to the Court of Appeals for the
Tenth Circuit.
In connection with its appeal, the Tax Commission
attempted to supplement the trial court record by sub-
mitting hundreds of pages of documents purporting to
bear on the issue of the present status of the Ute Tribe’s
Uintah and Ouray Reservation. The Court of Appeals
refused to receive such documents, but in its Cocision’®
determined that the findings by the District Court as to
reservation boundaries and the extent of the trust lands
were ‘‘clearly erroneous.’’
As to the remainder of the District Court’s findings,
the Court of Appeals affirmed the jurisdiction of the
District Court over the proceedings, affirmed the find-
ings regarding lack of State power to tax sales by Indians
to Indians, but reversed the District Court’s findings re-
garding the nature of the Utah sales tax, the right of
the Tribe to a refund for moneys paid to the State prior
to 1974, and decreed that, under the holding of Moe v.
Confederated Salish and Kootenai Tribes, 425 U.S. 463
(1976), the Utah sales tax was applicable to sales by the
Tribe’s commercial enterprise (Utefab) to non-Indians
on trust lands. No mention is made in the opinion either
of the Ute Tribe’s own taxing ordinance or of the effect
of the Tax Commission’s enforcement warrant on the
trust property of the Tribe. The case was thereupon ‘‘Re-
19Appendix A.
7
versed and Remanded for further proceedings’’ consist-
ent with the opinion.
This Petition follows the refusal of the Court of Ap-
peals to grant a rehearing.
REASONS FOR GRANTING THE WRIT
1. The decision of the Court of Appeals below sanc-
tions interference by a state with the internal affairs and
right of self determination of a federally recognized In-
dian Tribe on its reservation and is in direct conflict with
prior decisions of this Court in this regard. Bryan v.
Itasca County, 426 U.S. 373 (1976); ef. United States v.
Wheeler, 46 U.S.L. Week 4243, (U.S. March 22, 1978);
Santa Clara Pueblo v. Martinez, 46 U.S.L. Week 4412
(U.S. May 15, 1978).
Petitioner believes that the central question of
‘‘whether the state action infringed on the right of res-
ervation Indians to make their own laws and to be ruled
by them’’ has been decided below in a manner inconsist-
ent with Williams v. Lee, 358 US. 217 (1959) and
McClanahan v. State Tax Commission, 411 U.S. 164 (1973).
The Court of Appeals, while acknowledging ‘‘a pre-
emption of State taxing authority by federal legislation,’’
completely ignores both the existence of the Tribe’s sales
tax on sales to or by Indians within the reservation and
the summary collection procedures used by the Tax Com-
mission to enforce jurisdiction over the Tribe. It further
holds that ‘‘sales not on trust lands by the Tribe to In-
dians only are not within the state taxing power.”’
As this factual matter, i.e. sales to Indians only out-
side the reservation was not ever before the Court below,
8
the ‘‘holding’’ only serves to obscure the real issues of
interference with tribal self-determination.
The effect of the decision is that sales by the Tribe
on trust lands to non-Indians are subject to two taxes.
The Tribe must either repeal its tax or suffer the com-
petitive disadvantage of requiring purchasers of its goods
on the reservation to pay a double tax. The decision fur-
ther denies the Tribe the right to regulate commerce with
its own members within its reservation where either fee
lands or non-Indians are involved.
2. The decision below stands for the proposition that
the only Indian related sales which are not subject to
state jurisdiction are those on trust lands between Indians.
As such it contradicts decisions of this Court relating to
Indian Traders and Indian Country. See Warren Trad-
ing Post v. Arizona Tax Commission, 380 U.S. 685 (1965).
This Court on several occasions has considered the
propriety of state tax jurisdiction on Indian Reservations.
Where the incidence of the tax sought to be imposed falls
directly upon an Indian or an Indian Tribe, the tax has
been found to be an impermissible burden on ‘‘Commerce
. with the Indian Tribes.’’ Warren Trading Post v.
Arizona Tax Commission, Supra.; McClanahan v. State
Tax Commission, Supra. ; cf. 25 U.S.C. § 261.
One of the most recent cases to consider this issue
was Moe ». Confederated Salish and Kootenai Tribes of
the Flathead Reservation, 425 U.S. 463 (1976). There the
pivotal jurisdictional issue was the incidence of the tax.
Construing a Montana Statute which conclusively pre-
sumed the tax to be on the non-Indian consumer, the Court
ruled that the state could impose a minimal collection
burden on Indian retailers designed to avoid the likeli-
9
hood that non-Indians purchasing from tribal sellers would
avoid the payment of a lawful tax.
However in Moe, this Court expressly declined to ex-
press an opinion on the ‘‘complicated problems’’ of en-
forcement of state jurisdiction over Indian sellers. 425
U.S. at p. 467 n. 6. The Appellate Court below ignored
the fact that this action resulted only after the Utah Tax
Commission asserted jurisdiction over the Ute Tribe by
docketing a warrant against all of its real and personal -
property.
The enforcement problems contemplated in Moe were
before the Court of Appeals. It resolved them by disregard-
ing the requirement established by 25 U.S.C. § 1326 and
Kennerly v. District Court of Montana, 400 U.S. 423 (1971),
that tribal consent be given as a precondition to the as-
sumption of state jurisdiction. The opinion below re-
versed the trial court’s decision condemning such collec-
tion procedures, and by inference authorizes the imposi-
tion of state tax jurisdiction on Indian Tribes under threat
of execution and sale of tribal property.
Petitioner believes that the decision below is incon-
sistent and in conflict with decisions of this Court in these
regards.
3. The decision below is in conflict with established
congressional policies relating to Indian taxation.
This Court has recently reaffirmed that ‘‘Congress
has plenary authority to legislate for the Indian Tribes
in all matters,. . .’’ United States v. Wheeler, 46 U.S.L.
Week 4243 (U.S. March 22, 1978). Congress, in exercis-
ing this power has legislated both generally and specifi-
cally in terms which conflict with the Court of Appeals’
10
finding that the Ute Tribe is subject to the jurisdiction
of the Utah Tax Commission both for purposes of sales
tax liability and enforcement of such taxes. In general
terms, the stated Congressional policies of both the Indian
Self-Determination Act of 1975 (25 U.S.C. § 450 et seq.,
especially § 450(a) ‘‘Congressional Declaration of Policy’’)
and the Indian Financing Act of 1974 (25 U.S.C. § 1451
et seq., especially § 1451 ‘‘Congressional Declaration of
Policy’’) are but recent reaffirmations of ‘‘the well-
established federal policy of furthering Indian self-gov-
ernment’’ (Santa Clara Pueblo v. Martinez, 46 U.S.L.
Week 4412 (U.S. May 15, 1978).
In failing to consider the effect of the Tax Commis-
sion’s taxing powers and collection procedures on the
Ute Tribe herein, the Court of Appeals has run afoul of
the several federal statutes which expressly deny such
power to the State of Utah. These include:
(1) 25 U.S.C. § 476 (Section 16 of the Indian Reor-
ganization Act of 1934) which vested in the Ute Tribe
(pursuant to the adoption of its Tribal Constitution) the
power ‘‘to prevent the sale, disposition, lease, or encum-
brance of tribal lands, or other tribal assets without the
consent of the Tribe.’’ (emphasis added). This Court has
previously noted that, ‘‘The [Indian] Reorganization Act
did not strip Indian tribes and their reservation lands
of their historic immunity from state and local control.’’
Mescalero Apache Tribe v. Jones, 411 U.S. 145, 153 (1973).
(2) 25 U.S.C. § 1322(b) which, even if the state of Utah
had otherwise assumed jurisdiction over the Ute Tribe,
which it has not, would have prevented the state from
attempting any ‘‘alienation, encumbrance, or taxation of
any real or personal property . . . belonging to any Indian
or Indian tribe.’’ (emphasis added).
11
(3) The Utah Enabling Act of July 16, 1894 (28 Stat.
107) (See Appendix B herein) which provides that,
The people inhabiting said proposed state do
agree that they forever disclaim all right and title
... to all lands lying within said limits owned or
held by any Indian or Indian tribes . . . and said
Indian lands shall remain under the absolute jur-
isdiction and control of the Congress of the United
States. ... (Section 3).
This provision is carried forth and incorporated into the
Utah Constitution. See Article III, Paragraph ‘‘Second.”’
25 U.S.C. § 476 is important also because it specifi-
cally confirmed in Indian tribes ‘‘all powers vested in
any Indian tribe or tribal council by existing law.’’ Shortly
after this language was adopted by Congress in 1934,
the Solicitor of the Department of the Interior issued an
opinion identifying and defining such ‘‘powers.’’ This
opinion, entitled ‘‘Powers of Indian Tribes,’’ 55 I.D. 14
(1934), under the sub-heading ‘‘The Taxing Power of an
Indian Tribe,’’ states as follows:
Chief among the powers of sovereignty recognized
as pertaining to an Indian tribe is the power of
taxation. Except where Congress has provided
otherwise, this power may be exercised over mem-
bers of the tribe and over non-members, so far as
such non-members may accept privileges of trade,
residence, etc., to which taxes may be attached as
conditions. (55 I.D. at 46).
This opinion has been recently cited by this Court as
identifying such powers. See United States v. Wheeler,
supra., n. 27.
Petitioner submits that substantial questions, critical
to every Indian Tribe seeking economic self-determination,
exist as a result of these general and specific congressional
12
pronouncements and the opinion of the Court of Appeals
imposing Utah sales taxes and enforcement procedures on
the Ute Tribe.
(4) The Court of Appeals reversed the finding of
the Chief Judge of the District of Utah as to the incidence
and nature of the Utah Tax and held that ‘‘The Utah sales
tax... places a tax on the purchaser of tangible personal
property...’’
Petitioner respectfully submits that numerous deci-
sions of the Utah Supreme Court, together with the
language of the Utah Sales Tax Act itself, contradict this
conclusion.
The Utah tax in question is ‘‘[a] tax upon every
retail sale of tangible personal property made within the
State of Utah. . .’’ § 59-15-4 U.C.A. (1953) (See Appendix
B for all cited provisions of the Utah Code Annotated).
Vendors receiving consideration upon a sale of tangible
property or service ‘‘are responsible for the collection
of the amount of the tax imposed on [the] sale.’’ § 59-15-5
U.C.A. (1953). ‘*The word ‘tax’ means... the aggre-
gate amount of taxes due from the vendor .. . during
the period for which he is required to report his collec-
tions. ..’’ § 59-15-2(h) U.C.A. (1953).
The vendor is required to collect the tax from the
vendee, file quarterly returns and remit taxes on total
sales during the reporting period. § 59-15-5 U.C.A. (1953).
Failure to do so subjects the vendor to absolute liability
for the tax, criminal sanctions, penalties, and interest.
Section 59-15-11, U.C.A., (1953), dealing with subject
of ‘‘Collection of Tax by Warrant’’ states as foliows:
13
A tax due and unpaid under this act shall consti-
tute a debt due the state from the vendor and may
be collected, together with interest, penalty and
costs, by appropriate judicial proceeding... .
(emphasis added)
Since shortly after passage of the Utah sales tax law
in 1933, the Utah Supreme Court held that,
The Sales Tax Act imposes the taa on the transac-
tion, The amount of consideration involved in the
sale or transaction (a sale always involves a pur-
chase) is the measure to which the rate is applied.
The vendor or the person receiving the payment
or consideration upon a sale is charged under the
law with the responsibility of collecting or account-
ing to the” State for the tax imposed. (emphasis
added)
That the burden or incidence of the Utah sales tax falls
on sellers as well as buyers is emphasized by the following:
It is the duty of the vendor to collect the tax
from vendees who are ‘‘consumers’’ and to remit
the same with proper records to the Tax Com-
mission. [Citing what is now § 59-15-5, U.C.A.,
(1953)] However, the last cited section of the code
makes the vendor to consumers liable for the sales
tax regardless of whether or not said vendor col-
lects said tax from the vendee.”'
That the vendor is a ‘‘taxpayer’’ under the Utah law
is reaffirmed by the following:
20W, F. Jensen Candy Co. v. State Tax Commission, 90 Umh 359, 61 P.2d
629, 630-1 (1936). See also Union Stock Yards v. State Tax Commission of
Utah, 93 Utah 174, 71 P.2d 542 (1937). ’
212, C. Olsen Co. v. State Tax Commission, 109 Utah 563, 168 P.2d 324,
326-7 (1946).
14
First we must clarify that the sales tax is im-
posed upon all sales of tangible personal property
where passage of title and delivery occur within
the State of Utah. ... One need not be ‘‘retailer’’
to be taxed. Either retailers or wholesalers are
taxed if the sale is to the consumer or user. (First
emphasis in original; second added.)*
Further, Section 59-15-11, U.C.A., (1953), specifically re-
fers to the party against whom the State’s collection war-
rant is issued as ‘‘the delinquent taxpayer.’’
The clear error of the Circuit Court in reversing the
District Court’s finding that the Ute Tribe is entitled
to the refund is manifest in Section 59-15-8 of the Utah
statute dealing with ‘‘Overpayments and deficiencies,’’
* which provides:
If the amount paid exceeds that which is due,
the excess, ... shall be credited or refunded to
the person paying it upon written application there-
for. If the commission determines that any amount
... has been erroneously or illegally collected or
computed, the commission shall certify to the State
auditor the amount collected is excess of what was
legally due, from whom it was collected or by whom
paid to the Commission ... and the balance shall
be refunded to that person....
The importance of further review of this issue by
this Court is not limited to whether or not the Tribe gets
the refund, but is demonstrated by the emphasis in the
Moe decision that the tax considered therein was solely
a tax on the non-Indian customer and not a tax on the
reservation Indian himself. If in fact the burden of the
Utah sales tax is on the Indian vendor (the Ute Tribe
220gden Union Railway and Depot Co. v. State Tax Commission, 16 Utah
2d 23, 395 P2d 57, 59-60 (1964).
Dl EOE
15
herein), on the reservation, as the District Court found,
then state enforcement of the tax herein should be pre-
cluded by such decisions of this Court as Mescalero Apache
Tribe v. Jones,” McClanahan v. Arizona Taz Commission,”
and, recently, Bryan v. Itasca County.”
(5) The Court of Appeals below departed from the
standard of review in Indian reservation status cases by
reversing and remanding the District Court’s findings
relative to petitioners’ reservation.
The case was presented to the District Court on largely
stipulated facts. The parties agreed for the purposes of
this case that the reservation existed and that sales took
place within and without the reservation. No contradic-
tory evidence was offered at trial. No significant objec-
tion was raised by the Tax Commission to the District
Court’s findings and decision which incorporated the
parties’ stipulations and other testimony concerning these
issues.
For the first time on appeal below, the Tax Com-
mission proffered voluminous exhibits as a proposed ap-
pendix to its brief purporting to evidence what it claimed
was congressional intent to disestablish the Uintah and
Ouray reservation. The Court of Appeals refused to ac-
cept the exhibits, but nevertheless stated that the issue
of ‘‘the boundaries of the reservation or what might con-
stitute trust lands’’ was ‘‘not the subject to a stipulation
binding on the Court in any manner. The finding by the
Trial Court as to the reservation boundaries or as to
trust lands was clearly erroneous.’’
29411 US. 145 (1973).
24411 U.S. 164 (1973).
29425 US. 373 (1976).
16
Petitioner believes that the Appellate Court acted
inappropriately and in conflict with decisions of this
Court when it refused to accept the stipulated record of
the Trial Court. The case of H. Hackford & Co. v. United
States, 197 U.S. 442 (1905), involved a stipulation of ulti-
mate facts which the Court of Appeals concluded was not
binding.
This Court then stated:
‘‘We think the parties were entitled to have
this case tried upon the assumption that these
ultimate facts, stipulated into the record were
established no less than the specific facts recited.’’
(Ibid, P. 447). See also Kelley v. Rhodes, 188 U.S.
1 (1902).
The Tribe submits that for the Court of Appeals to
find the record below lacking in ‘‘evidence or basis’’ and
consequently clearly ‘‘erroneous’’ is a fundamental breach
of that Court’s appellate responsibility, meriting plenary
review by this Court
In response to the District Court’s findings regard-
ing the status and extent of petitioner’s reservation, the
Court of Appeals stated :
We are unable from the record to find any
evidence or basis for the determination by the trial
court as to the boundaries of the reservation or
what might constitute trust lands. The issue was
not litigated apparently due to a misunderstanding
as to a provision of the pretrial order... . The
finding by the trial court as to the reservation
boundaries or as to trust lands was clearly erron-
eous.
This pronouncement by the Court of Appeals ignores
the pleadings, admissions, pre-trial order and stipulations
17
before the District Court. It further disregards testimony
and exhibits received from the United States Bureau of
Indian Affairs Realty Officer for petitioner’s reserva-
tion as to the location of the original reservation bound-
aries.”*
Even in its Reply Brief filed with the Court of Ap-
peals, the Tax Commission concluded that ‘‘it is fair to
say a ‘reservation’ consisting only of the present trust
lands... continued even after 1905.’’*’
The Commission further contended in the same brief:
‘‘The original Uintah Reservation and the
original Uncompahgre Reservation were disestab-
lished by acts of Congress, and the present Uintah
and Ouray Reservation occupies an area smaller
than contained in the two former reservations.’’ (em-
phasis added)*
All of the evidence below was to the effect that the
Ute Tribe has a reservation, that sales took place from
trust lands on that reservation to buyers on trust lands,
on private lands within the original boundaries of the
reservation and outside those boundaries altogether. The
Tribe claimed all of these sales were exempt from Utah
tax jurisdiction. The Commission took a contrary view.
The Trial Court agreed with the Tribe.
An issue which was not litigated was the Tax Com-
mission’s belated assertion that the Tribe’s reservation
had been disestablished or diminished, but this claim was
*°Trial Transcript Feb. 11, 1976 pp. 37-49.
*"Reply Brief of the State of Utah, P. 13.
**Reply Brief of the State of Utah, P. 13. The Commission by these con-
cessions apparently abandoned its claim that the Tribe's present reservation
was disestablished.
18
never made until after the trial in the District Court, by
pleadings or otherwise.
The Court of Appeals apparently determined that
this was a threshold question which should have been
tried in the District Court and remanded the case for this
purpose. Petitioner believes this conclusion to be erron-
eous for two reasons.
First, as long as there is no dispute regarding the
fact that sales by the Tribe were made from trust lands,
there was ample evidence and precedent for the District
Court to find that the Commission had no jurisdiction
over the Tribe for purposes of these sales in this case.
In such circumstances the issue of diminishment of the
Tribe’s reservation is immaterial to the resolution of any
questions of state jurisdiction over the Tribe. Further,
as the existence of the tribe, and a valid tribal tax ordi-
nance were undisputed, the question of the right of the
tribe to impose a sales tax on sales by its tribal enter-
prise on trust lands to buyers anywhere would appear
unaffected by any diminishment issue sought to be raised
by the Tax Commission.
Second, as the burden of proving reservation dimin-
ishment or disestablishment has always been on the pro-
ponent of such a contention, the Tax Commission’s burden
below was to show a clearly expressed congressional in-
tent to disestablish or diminish, absent which showing,
this Court requires all reasonable ambiguities to be re-
solved in favor of the Indians and in favor of continued
reservation existence. See DeCoteau v. District County
Court, 420 U.S. 425, 444-447 (1975).
The Court of Appeals has not only disregarded the
record before it, but has apparently reversed the long
standing presumptions regarding reservation status and
19
the burden of proving reservation disestablishment. A
further review of this matter is appropriate to affirm the
proper judicial standard of review applicable to such a case.
CONCLUSION
For these reasons, a writ of certiorari should issue
to review the judgment and opinion of the Court of Ap-
peals for the Tenth Circuit.
Respectfully submitted,
F. BURTON HOWARD
STEPHEN G. BOYDEN
SCOTT C. PUGSLEY
1000 Kennecott Building
10 Kast South Temple
Salt Lake City, Utah 84133
Telephone : (801) 521-0800
Attorneys for Petitioner
Appendix
APPENDIX A
OPINIONS AND JUDGMENT BELOW
I. FINDINGS, CONCLUSIONS AND ORDER OF
THE UNITED STATES DISTRICT COURT
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
No. C 74-183
THE UTE INDIAN TRIBE,
vs.
STATE TAX COMMISSION OF THE
STATE OF UTAH,
Plaintiff,
Defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW
AND ORDER
The above-entitled matter came on regularly for trial
on the llth day of February, 1976, upon the Amended
Complaint of the plaintiff for declaratory judgment, in-
junctive relief and return of taxes alleged to have been
improperly collected, and the plaintiff, The Ute Indian
Tribe, appearing by and through its counsel, F. Burton
Howard, and defendant, State Tax Commission of the
State of Utah, appearing by and through its counsel,
G. Blaine Davis, and the Court having heard the evi-
dence and having considered the pleadings and the ex-
hibits admitted into evidence, and after argument of coun-
sel, the Court hereby makes the following
A-2
FINDINGS OF FACT
1. This is an action in four counts for declaratory
relief declaring that sales and use taxes on sales by the
Ute Indian Tribe and its tribal enterprise, Ute Fab, Ltd.,
as levied by the defendant are illegal and invalid, and
further declaring that the defendant has no jurisdiction
to levy or collect sales or use taxes or otherwise inter-
fere with the commercial activities of the plaintiff on
the Uintah and Ouray Indian Reservation.
2. Plaintiff in this action further seeks declaratory
relief that a judgment warrant docketed against proper-
ties held in trust for the plaintiff by the United States
of America is void and that plaintiff’s tax ordinance is
valid and effective within the exterior boundaries of the
Reservation.
3. The action further requests an order compelling
the return of monies erroneously forwarded by the plain-
tiff to the defendant and enjoining and restraining fur-
ther levy and collection of sales and use taxes or further
docketing warrants to effect the collection of the same
against the Tribe.
4. Plaintiff is a sovereign American Indian Tribe or-
ganized pursuant to Act of Congress of June 18, 1934,
(48 Stat. 984), 25 U.S.C. § 761, et seq., as amended, with
its governing body duly recognized by the Secretary of
the Interior, and its existence is within Federal jurisdic-
tion and is governed by the laws of the United States.
In such capacity plaintiff is an instrumentality of the
United States.
5. The Uintah and Ouray Reservation was created
and exists and its boundaries established under and pur-
suant to Executive Orders of October 3, 1861 and January
A-3
5, 1882 and Acts of Congress of May 5, 1864, (13 Stat.
63) and March 11, 1948 (62 Stat. 72) and the laws of the
United States.
6. Pursuant to Act of Congress of June 18, 1934 (48
Stat. 984), plaintiff adopted its Constitution and By-Laws
confirming and extending plaintiff’s jurisdiction to the
territory within the exterior boundaries of the Uintah and
Ouray Reservation as set forth by the above mentioned
Executive Orders and Acts of Congress.
7. Plaintiff’s Constitution further empowers plain-
tiff’s Tribal Business Committee to promulgate and en-
force tax ordinances, to levy taxes and license fees upon
non-members doing business within the Reservation, and
to regulate trade upon the Reservation.
8. Plaintiff, through its governing body, the Tribal
Business Committee, duly adopted an ordinance effective
January 1, 1974, which provides for the taxation of sales
to or by Indians within the exterior boundaries of its
Reservation. Defendant also levied and attempted to col-
lect sales taxes on sales by the plaintiff during the first
quarter of 1974.
9. Plaintiff at no time, by agreement or otherwise,
has submitted to the jurisdiction of or ceded jurisdiction
to the State of Utah or to the State Tax Commission to
levy or collect sales or use taxes on sales to or by Indians
on the Uintah and Ouray Reservation nor has there been
any enactment by Congress providing that Utah law shall
apply to such sales.
10. Plaintiff, acting through its tribal enterprise,
Ute Fab, Ltd. for the purpose of developing skills of
tribal members and assisting in the attainment of eco-
A-4
nomic self-sufficiency for the Ute Indian Tribe, makes,
sells and distributes personal property of various kinds,
including cabinets, millwork, wood products, furniture and
associated hardware and tools from its plant on the Uintah
and Ouray Reservation.
11. Said personal property was sold by the plaintiff
and delivery was taken by purchasers from the plaintiff
at three general areas, to-wit:
A. Plaintiff’s plant at the Tribal Headquarters on
lands originally received as part of the original Uintah
and Ouray Indian Reservation and administered by the
Bureau of Indian Affairs as trust lands.
B. Lands within the present exterior boundary of
the Reservation which were originally part of the Uintah
and Ouray Indian Reservation but are presently owned
in fee by other individuals primarily non-Indians.
C. Lands outside the exterior boundaries of the Res-
ervation which are not now and never have been part of
the Uintah and Ouray Indian Reservation.
12. That during the period January 1, 1971, through
December 31, 1973, plaintiff prepared and filed sales tax
returns and reported sales to the defendant as follows:
A. Sales made from plaintiff’s plant at the Tribal
Headquarters where delivery was taken on trust lands
maintained as part of the Uintah and Ouray Indian Res-
ervation, $132,140.61.
B. Sales made from plaintiff’s plant at the Tribal
Headquarters and delivered by plaintiff in plaintiff’s ve-
hicles within the present exterior boundaries of the Res-
ervation to purchasers primarily non-Indians on lands
A-5
owned in fee and not administered as trust lands by the
Bureau of Indian Affairs, $3,915.42.
C. Sales made from plaintiff’s plant at the Tribal
Headquarters and delivered by plaintiff in plaintiff’s ve-
hicles to purchasers outside of the present exterior bound-
aries of the Reservation, $211,465.85.
13. In the course of making the aforesaid sales,
plaintiff collected from all of its purchasers a sales tax
at the rate of 442% and inadvertently and erroneously
forwarded said sales tax to the defendant Tax Commission.
14. The total amount of money forwarded to the
Tax Commission pursuant to said sales tax returns was
$15,430.33.
15. The portion of the $15,430.33 attributable to each
of the aforesaid areas is as follows:
A. $5,737.02
B. $ 177.36
C. $9,515.95
16. In March of 1974 plaintiff made demand of de-
fendant for return of the $15,430.33 and filed a formal
application and claim for refund in an administrative pro-
ceeding with defendant Tax Commission. Defendant re-
fused to return any part of those monies.
17. On May 22, 1974, prior to any hearing or deci-
sion by the Tax Commission, defendant docketed a war-
rant for delinquent sales tax for the period January 1,
1974, through March 31, 1974, against the plaintiff and
its real or personal property.
A-6
18. Section 59-15-11 and Section 59-16-15, U.C.A.,
1953, the Utah statutes which authorized this warrant,
purport to authorize a lien upon the real property of
the plaintiff, i.e., trust property, the legal owner of which
is the United States of America and which is admin-
istered by the Bureau of Indian Affairs for the plaintiff,
and further direct the County Sheriff of the County where
the property is located to levy upon and sell the real and
personal property of the plaintiff to satisfy the delinquent
tax. These statutes also purport to have the force and
effect of an execution against all personal property of
the plaintiff and to create a lien upon the real property
of the United States of America, in the same manner as
a docketed judgment.
19. Plaintiff thereupon sought relief in this Court
and filed its Complaint herein; sometime after the filing
of the Complaint, defendant released the warrant.
20. After the filing of the Complaint, the defendant
continued to audit the plaintiff’s business activities and
requested that the plaintiff appear at administrative hear-
ings to determine additional sales tax liability on sales
unrelated to the Complaint herein.
21. In an additional claim for refund of sales taxes
filed with the defendant in March of 1974 by an enrolled
member of plaintiff’s Tribe requesting relief from the
State sales tax imposed on the purchase of a trailer home
where delivery was taken upon plaintiff’s Reservation
on trust lands, the defendant failed to respond and re-
fused to grant a hearing on such claim and has continued
to fail and refuse to apply applicable law and render a
decision regarding whether said purchase was exempt
from Utah sales taxes.
A-7
22. In addition, the defendant has continued to re-
quire the Tribe to pay sales and use taxes on purchases
of property for the use and benefit of the Tribe during
the pendency of this action.
23. Throughout the pendency cf this matter, defend-
ant has continued to attempt to collect sales and use
taxes from the plaintiff and under Utah law will continue
to levy and collect such taxes from the plaintiff in the
future by the docketing of warrants or otherwise unless
restrained by this Court.
From the foregoing Findings of Fact, the Court makes
the following
CONCLUSIONS OF LAW
1. The Court has jurisdiction over the parties and
the subject matter of the Complaint.
2. A justiciable controversy exists between the parties
herein.
3. The plaintiff is the real party in interest and has
standing to bring this action.
4. By Act of Congress of April 11, 1968, (82 Stat.
78, 79) 25 U.S.C. §§ 1321 and 1322, the United States has
given its consent to the States to assume jurisdiction over
civil causes of action between Indians or to which Indians
are parties which arise in the areas of Indian country
within a state on the condition that the affected tribe
consents to such jurisdiction. This Act further prohibits
the alienation, encumbrance or taxation of real or per-
sonal property belonging to or held in trust by the United
States for any Indian or any Indian Tribe. The Act
further provides that any tribal ordinance adopted by any
A-8
Indian Tribe in the exercise of the authority which it
possesses shall be given full force and effect in the de-
termination of civil causes arising under the Act.
5. The area within the exterior boundaries of plain-
tiff’s Reservation is Indian country, notwithstanding the
existence of patented or fee lands within said bound-
aries, and as the plaintiff has not consented to the juris-
diction of the defendant by agreement or otherwise and
as there has been no enactment by Congress providing
that Utah State law shall apply to the sales within the
Reservation, the defendant has no jurisdiction within the
exterior boundaries of the Reservation to tax Indians or
Indian property.
6. The imposition of sales taxes on commercial trans-
actions between plaintiff and others by the defendant
violates the exclusive Federal jurisdiction over the right
to regulate commerce with the Indian tribes established
by Article I, Section 8, of the United States Constitution.
7. The collection and retention of sales and use taxes
by defendant which were paid by plaintiff in the amounts
herein set forth violate the provisions of Article I, Section
8, and Article VI, Clause 2, of the Constitution of the
United States.
8. Congress has preempted State taxation of sales
to or by Indians on Indian Reservations by the enactment
of Title 25, §4 261 through 264 of the United States Code.
9. The Utah State Constitution Article III, Section
2, acknowledges the absolute jurisdiction and control of
the Congress of the United States over Indian lands and
precludes the taxation of such lands until the title thereto
shall have been extinguished by the United States.
A-9
10. Section 63-36-16, U.C.A., 1953, specifically limits
the authority of the defendant to encumber or tax any
real or personal property of the plaintiff and further dis-
claims jurisdiction in the Utah courts to adjudicate ques-
tions raised by the docketing of the warrant herein. Ac-
cordingly, litigation involving the alienation, encumbrance,
or taxation of Indian property or purporting to restrict
the use of such property must be resolved other than in
the courts of the State of Utah.
11. The defendant has no jurisdiction to tax sales
to or by the plaintiff within the exterior boundaries of
the Uintah and Ouray Reservation.
12. The defendant further has no jurisdiction over
sales made by the plaintiff from its plant at the Tribal
Headquarters even if delivery of property sold occurs
outside of the exterior boundaries of the Uintah and
Ouray Reservation.
13. Sales made by the plaintiff where delivery was
taken upon fee lands within the exterior boundaries of
plaintiff’s Reservation are deemed to have occurred within
the exterior boundaries of the Reservation and are ex-
empt from Siate jurisdiction.
14. The exercise of State jurisdiction to tax sales
to or by Indians within plaintiff’s Reservation interferes
with plaintiff’s right of tribal self-government and its
right to self-determination and impairs rights granted or
reserved by Federal law.
15. Plaintiff is the person who paid the tax to the
defendant and therefore it is a taxpayer and is the person
to whom the refund should be paid pursuant to the pro-
visions of Section 59-15-8, U.C.A., 1953.
A-10
16. The defendant should be required to return to
the plaintiff all sums inadvertently and erroneously for-
warded and paid to defendant pursuant to the sales tax
returns filed herein.
17. This Court should permanently enjoin the de-
fendant from making further levy and collection of sales
and use taxes on any sales made by the plaintiff or on
sales to or by the plaintiff or other Indians within the
exterior boundaries of the Uintah and Ouray Indian Res-
ervation.
18. This Court should declare that all monies for-
warded to the defendant by plaintiff be returned to plain-
tiff regardless of whether the sales took place within or
without the exterior boundaries of the Reservation.
19. Title to lands held in trust by the Federal Gov-
ernment for Indians can be extinguished only with. Fed-
eral consent and the determination of such titles is a
matter of Federal law.
20. The defendant may not without the consent of
Congress tax the property of the United States nor may
it tax instrumentalities of the United States.
21. The assessment, levy and attempted collection by
warrant of sales or use taxes by defendant on sales to
or by the plaintiff as an instrumentality of the United
States are illegal as to plaintiff and violate the provisions
of Article I, Section 8, and Section VI, Clause 2, of the
Constitution of the United States.
22. The warrant docketed by the defendant on May
22, 1974, is and should be declared by this Court to be
null and void.
A-11
23. This Court should permanently enjoin the defend-
ant from further docketing warrants pursuant to the pro-
visions of Sections 59-15-11 and 59-16-15, U.C.A., 1953,
as amended.
24. The Sales Tax Ordinance, effective January 1,
1974, adopted by plaintiff should be declared to be a validly
existing tax ordinance in full force and effect within the
exterior boundaries of plaintiff’s Reservation, and defend-
ant should be determined to be without authority to tax
sales or to proceed in any way so as to conflict or inter-
fere with the tax ordinance adopted by the plaintiff.
25. The plaintiff is an instrumentality of the United
States for all purposes pertinent hereto.
26. One of the purposes of 28 U.S.C. § 1362 is to
permit tribes to initiate litigation in the Federal Courts
involving issues which could have been instituted by the
United States as Trustee for the tribes, and the action
herein could have been instituted by the United States.
27. The doctrine of sovereign immunity does not bar
an action against a state agency for declaratory and in-
junctive relief against the application of State statutes
which violate provisions of the Constitution of the United
States.
28. Plaintiff was not required to exhaust administra-
tive remedies with the defendant Tax Commission or with
the courts of the State of Utah as a condition precedent
to filing its Complaint herein.
29. A plain, speedy, efficient or otherwise adequate
remedy was and is not available under Utah law or in the
courts of the State of Utah to provide plaintiff the relief
to which it is herein entitled.
A-12
30. Defendant by its actions in docketing a warrant
against the property of the United States on May 22,
1974, and voluntarily and arbitrarily asserting a judgment
lien against said property has waived its immunity from
suit and consented to a determination of its rights herein.
IT IS THEREFORE ORDERED, ADJUDGED AND
DECREED that plaintiff is a sovereign American Indian
tribe organized pursuant to Act of Congress of June 18,
1934, that the Uintah and Ouray Reservation is an Indian
Reservation created, existing and with its boundaries
established pursuant to Executive Orders of October 3,
1861, January 5, 1882, and under and pursuant to Acts
of Congress of May 5, 1864 and March 11, 1948. Said
Reservation constitutes Indian country, is within Federal
jurisdiction, and is governed by the laws of the United
States and defendant has no jurisdiction or authority to
levy or collect sales or use taxes against the plaintiff
within this Reservation.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count I of plaintiff’s Com-
plaint that sales taxes levied by the defendant on sales of
the plaintiff and its tribal enterprise, Ute Fab, Ltd., are
illegal and invalid.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count I of plaintiff’s Com-
plaint that defendant be permanently enjoined from mak-
ing further levy and collection of sales and use taxes
made by the Ute Indian Tribe or on sales to or by Indians
within the exterior boundaries of the Uintah and Ouray
Reservation.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count I of plaintiff’s Com-
-imammmamaaaaaaamamaasumamassaaamusmamasumsaasasaaaatiiiuaeaai imitate i is
A-13
plaint that defendant return to plaintiff the sum of
$5,914.38, representing monies collected by the plaintiff
and forwarded erroneously to the defendant as sales taxes
for sales consummated within the exterior boundaries of
plaintiff’s Uintah and Ouray Reservation.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count II of plaintiff’s Com-
plaint that defendant return to plaintiff the additional
sum of $9,515.95, representing monies collected by the
plaintiff and forwarded erroneously to the defendant as
sales taxes on sales where delivery was made outside the
exterior boundaries of plaintiff’s Uintah and Ouray Res-
ervation.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count III of plaintiff’s
Complaint that defendant, State Tax Commission of the
State of Utah, be and the same is hereby permanently
enjoined from docketing further warrants against the Ute
Indian Tribe pursuant to the provisions of Sections
59-15-11 and 59-16-15, U.C.A., 1953, as amended.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count III of plaintiff’s Com-
plaint that the warrant docketed against the plaintiff on
May 22, 1974, in the total amount of $920.10 is null and
void, having no force or effect whatsoever.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count IV of plaintiff’s
Complaint that plaintiff’s taxing ordinance is legally en-
acted, is valid and is in full force and effect from January
1, 1974.
A-14
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED with reference to Count IV of plaintiff’s
Complaint that the assessment, levy and collection of
sales or use taxes by defendant on sales subject to plain-
tiff’s ordinance are illegal and in violation of the Con-
stitution of the United States.
DATED this 25th day of February, 1976.
WILLIS W. RITTER
Chief Judge
United States District Court
A-15
II. OPINION OF THE U.S. COURT OF APPEALS
FOR THE TENTH CIRCUIT
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
No. 76-1602
THE UTE INDIAN TRIBE,
Appellee,
v.
STATE TAX COMMISSION OF THE STATE
OF UTAH,
Appellant.
Appeal From The United States District Court
For The District of Utah
(D.C. # C-74-183)
Tom D. Tobin, Special Assistant Attorney General (Ver-
non B. Romney, Attorney General, G. Blaine Davis, H.
Wright Volker, Michael L. Deamer, Assistant Attorneys
General, with him on the Brief), for Appellant.
F. Burton Howard, Salt Lake City, Utah (Scott C. Pugs-
ley, of Boyden, Kennedy, Romney & Howard, Salt Lake
City, Utah, with him on the Brief), for Appellee.
Before SETH, Chief Judge, DOYLE, Circuit Judge, and
STANLEY, Senior District Judge.*
SETH, Chief Judge.
*Of the District of Kansas, Sitting by Designation.
A-16
This is an action brought by the Ute Indian Tribe
against the State Tax Commission of the State of Utah
for injunctive relief and for a declaratory judgment that
the State of Utah sales taxes could not be levied or col-
lected on sales of personal property made by a tribal
enterprise within the boundaries of the Uintah and Ouray
Reservation. The complaint also seeks the return of funds
theretofore collected by the Tribe on such sales, and re-
mitted to the State of Utah.
The trial court enjoined the State from seeking to
collect sales taxes on sales made by the Tribe on the
reservation, and directed the return to the Tribe of the
collections theretofore made on such sales. The trial court
determined that the reservation boundaries were as orig-
inally established. The State has taken this appeal.
It is apparent that this appeal is controlled basically
by Moe v. Confederated Salish & Kootenai Tribes, 425
U.S. 463; Mescalero Apache Tribe v. Jones, 411 U.S. 145,
and McClanahan v. Arizona State Tax Comm’n, 411 U.S.
164.
In Moe the Court considered the relationship between
28 U.S.C. § 1341, which generally prohibits injunctions
preventing the levy or collection of state taxes if there
is a plain and speedy state remedy, and 28 U.S.C. § 1362
which gives the district courts jurisdiction over ‘‘all’’
civil actions brought by Indian Tribes in controversies
arising under the Constitution, laws, or treaties of the
United States. The Court in Moe decided that 28 U.S.C.
§ 1362 was intended to grant jurisdiction to the district
courts in civil actions in all instances where the United
States could have or had the requisite interest to com-
mence such suit. The Court relied on Heckman v. Umted
States, 224 U.S. 413, and United States v. Rickert, 188
U.S. 432. The Court in Moe then said:
a
A-17
‘*. . . Since the United States is not barred
by § 1341 from seeking to enjoin the enforcement
of a state tax law, Department of Employment v.
United States, supra, we hold that the Tribe is
not barred from doing so here.’’
The Court in Moe thus indicated that the above in-
terpretation of section 1346 was the proper method to
apply section 1341 rather than using the federal instru-
mentality doctrine. The basis is described as a preemption
of State taxing authority by federal legislation. This also
apparently meets the Eleventh Amendment arguments.
The Court also there discussed the state service argu-
ments, and the General Allotment Act arguments ad-
vanced by the State of Montana. The Court in Moe held
that it is proper to give special treatment and special
preference to the Indians because they are Indians. Thus
they were so set apart on racial grounds as in Morton v.
Mancari, 417 U.S. 535, quoted by the Court. The court
also discussed the checkerboard problem arising from non-
Indian land ownership within the reservation boundaries,
and again held that the fact the plaintiffs were of a par-
ticular ‘‘racial’’ group and tribal organization permitted
them to assert rights not available to non-Indians in the
same area, They can also assert rights over non-Indians
in the same area under Morton v. Mancari, 417 U.S. 535,
cited in Moe.
The Court in Moe concluded that the State of Mon-
tana could not assess a vendor’s license fee against an
Indian for selling cigarettes on ‘‘reservation land,’’ and
could not apply the cigarette sales tax on ‘‘reservation
sales’’ by Indians to Indians. The Court expressly did
not extend the prohibition to sales by Indians on Indian
land to non-Indians. The Montana tax was on the con-
sumer and precollected. The Court also held that the
A-18
Indian retailer could be required to collect the tax for
the State on sales to non-Indians.
The Utah sales tax under Utah Code Ann. § 59-15-1
places a tax on the purchaser of tangible personal prop-
erty. The seller collects the tax on behalf of the State
from the buyer at the time of the sale, and remits to the
State. Where a ‘‘sale’’ is made is defined by Utah law
and for the most part is where the goods are delivered.
Insofar as this action seeks to have the State of
Utah return sales taxes collected by the Tribe under a
generalized or lump-sum claim, it must fail as these funds
now in the hands of the State were paid by the buyers of
the goods and not by the sellers. If anyone can seek re-
covery or refund, it is these buyers.
The portion of the complaint which seeks to enjoin
the imposition of a sales tax is another matter. Under the
decisions of the Supreme Court, referred to above, sales
on trust lands by the Tribe to Indians are not subject to
the state sales tax. The State here so acknowledges. The
provisions of the Utah Enabling Act do not lead to a dif-
ferent conclusion.
As to sales by the Ute commercial enterprise here con-
cerned on trust lands to non-Indians, the Utah sales tax
is applicable. This is also in accordance with Moe v. Con-
federated Salish & Kootenai Tribes, 425 U.S. 463.
We also hold that sales not on trust lands by the
Tribe to Indians only are not within the state taxing power.
We are unable from the record to find any evidence
or basis for the determination by the trial court as to
the boundaries of the reservation or what might consti-
tute trust lands. The issue was not litigated apparently
eee sees -
A-19
due to a misunderstanding as to a provision in the pre-
trial order. Also this was a matter which required the
proof of facts and of the application of law. It was not
subject to a stipulation binding on the court in any man-
ner. The finding by the trial court as to the reservation
boundaries or as to trust lands was clearly erroneous.
Again, under the circumstances, this may not be an issue.
The case must be REVERSED AND REMANDED
for further proceedings consistent with this opinion.
A-20
Ill. ORDER DENYING PETITION FOR
REHEARING
MAY TERM — June 2, 1978
Before Honorable Oliver Seth, Honorable William J.
Holloway, Jr., Honorable Robert H. McWilliams, Honor-
able James E. Barrett, Honorable William E. Doyle, Hon-
orable Monroe G. McKay, Honorable James K. Logan,
Circuit Judges, and Honorable Arthur J. Stanley, Jr.,
Senior District Judge
No. 76-1602
THE UTE INDIAN TRIBE,
Plaintiff-Appellee,
vs.
STATE TAX COMMISSION OF THE STATE
OF UTAH, Defendant-Appellant,
UNITED STATES OF AMERICA,
Amicus Curiae,
This matter comes on for consideration of appellee’s
petition for rehearing and suggestion for rehearing en
bane filed in the captioned cause.
Upon consideration whereof, the petition for rehear-
ing is denied by Circuit Judges Seth and Doyle and Senior
District Judge Stanley to whom the case was argued and
submitted.
The petition for rehearing having been denied by
the panel to whom the case was argued and submitted and
no member of the panel nor judge in regular active service
on the Court having requested that the Court be polled
on rehearing en bane, Rule 35, Federal Rules of Appellate
Procedure, the suggestion for rehearing en banc is denied.
HOWARD K. PHILLIPS
Clerk
APPENDIX B
CONSTITUTIONAL PROVISIONS AND STATUTES
Art. I, § 8 — CONSTITUTION OF THE UNITED
STATES
The Congress shall have Power...
To regulate commerce with foreign nations, and
among the several States, and with the Indian tribes.
Art. II— CONSTITUTION OF UTAH
Second:—The people inhabiting this State do affirm
and declare that they forever disclaim all right and title
to the unappropriated public lands lying within the bound-
aries hereof, and to all lands lying within said limits
owned or held by any Indian or Indian tribes, and that
until the title thereto shall have been extinguished by the
United States, the same shall be and remain subject to
the disposition of the United States, and said Indian lands
shall remain under the absolute jurisdiction and control
of the Congress of the United States. The lands belong-
ing to citizens of the United States, residing without this
State shall never be taxed at a higher rate than the lands
belonging to residents of this State; but nothing in this
ordinance shall preclude this state from taxing, as other
lands are taxed, any lands owned or held by any Indian
who has severed his tribal relations, and has obtained
from the United States or from any person, by patent or
other grant, a title thereto, save and except such lands
as have been or may be granted to any Indian or Indians
under any act of Congress, containing a provision exempt-
ing the lands thus granted from taxation, which last men-
tioned lands shall be exempt from taxation so long, and
to such extent, as is or may be provided in the act of Con-
gress granting the same. (As amended November 5, 1946,
effective January 1, 1947.)
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UTAH ENABLING ACT (28 Stat. 107)
Second :—That the people inhabiting said proposed
State do agree that they forever disclaim all right and
title to the unappropriated public lands lying within the
boundaries thereof; and to all lands lying within said
limits owned or held by any Indian or Indian tribes; and
that until the title thereto shall have been extinguished
by the United States, the same shall be and remain sub-
ject to the disposition of the United States, and said Indian
lands shall remain under the absolute jurisdiction and
control of the Congress of the United States; that the
lands belonging to citizens of the United States residing
without the said State shall never be taxed at a higher
rate than the lands belonging to residents thereof; that
no taxes shall be imposed by the State on lands or prop-
erty therein belonging to or which may hereafter be pur-
chased by the United States or reserved for its use; but
nothing herein, or in the ordinance herein provided for,
shall preclude the said State from taxing, as other lands
are taxed, any lands owned or held by any Indian who
has severed his tribal relations and has obtained from
the United States or from any person a title thereto by
patent or other grant, save and except such lands as have
been or may be granted to any Indian or Indians under
any Act of Congress containing a provision exempting
the lands thus granted from taxation; but said ordinance
shall provide that all such lands shall be exempt from taxa-
tion by said State so long and to such extent as such Act
of Congress may prescribe.
UNITED STATES CODE 25 § 476
Organization of Indian tribes ; constitution and by-laws ;
special election
Any Indian tribe, or tribes, residing on the same
reservation, shall have the right to organize for its com-
mon welfare, and may adopt an appropriate constitution
and bylaws, which shall become effective when ratified
by a majority vote of the adult members of the tribe, or
of the adult Indians residing on such reservation, as the
——
es Cnet tee Ose ow
A-23
case may be, at a special election authorized and called
by the Secretary of the Interior under such rules and reg-
ulations as he may prescribe. Such constitution and by-
laws, when ratified as aforesaid and approved by the
Secretary of the Interior, shall be revocable by an elec-
tion open to the same voters and conducted in the same
manner as hereinabove provided. Amendments to the
constitution and bylaws may be ratified and approved by
the Secretary in the same manner as the original consti-
tution and bylaws.
In addition to all powers vested in any Indian tribe
or tribal council by existing law, the constitution adopted
by said tribe shall also vest in such tribe or its tribal coun-
cil the following rights and powers: To employ legal
counsel, the choice of counsel and fixing of fees to be
subject to the approval of the Secretary of the Interior;
to prevent the sale, disposition, lease, or encumbrance
of tribal lands, interest in lands, or other tribal assets
without the consent of the tribe; and to negotiate with
the Federal, State, and local Governments, The Secretary
of the Interior shall advise such tribe or its tribal coun-
cil of all appropriation estimates or Federal projects for
the benefit of the tribe prior to the submission of such
estimates to the Bureau of the Budget and the Congress.
June 18, 1934, c. 576, § 16, 48 Stat. 987.
25 § 1322 — Assumption by State of civil jurisdiction —
Consent of United States; force and effect of civil laws
(a) The consent of the United States is hereby given
to any State not having jurisdiction over civil causes of
action between Indians or to which Indians are parties
which arise in the areas of Indian country situated within
such state to assume, with the consent of the tribe oc-
cupying the particular Indian country or part thereof
which would be affected by such assumption, such measure
of jurisdiction over any or all such civil causes of action
arising within such Indian country or any part thereof
as may be determined by such State 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
A-24
general application to private persons or private property
shall have the same force and effect within such Indian
country or part thereof as they have elsewhere within
that State.
Alienation, encumbrance, taxation, use, and probate
of property
(b) Nothing in this section shall authorize the alien-
ation, encumbrance, or taxation of any real or personal
property, including water rights, belonging 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;
or shall confer jurisdiction upon the State to adjudicate,
in probate proceedings or otherwise, the ownership or
right to possession of such property or any interest
therein.
Force and effect of tribal ordinances or customs
(ce) Any tribal ordinance or custom heretofore or here-
after adopted by an Indian tribe, band, or community in
the exercise of any authority which it may possess shall,
if not inconsistent with any applicable civil law of the
State, be given full force and effect in the determination
of civil causes of action pursuant to this section.
Pub.L. 90—284, Title Iv, § 402, Apr. 11, 1968, 82 Stat. 79.
UTAH CODE ANNOTATED, 1953, AS AMENDED
58-15-2. Definitions — Scope — Exemptions — Retail
sales — Wholesale sales.
(b) The term ‘‘sale’’ or ‘‘sales’’ includes installment
and credit sales, every closed transaction constituting a
sale, and also includes the sale of electrical energy, gas,
services or entertainment taxable under the terms of this
A-25
act. A transaction whereby the possession of property is
transferred but the seller retains the title as security for
the payment of the price shall be deemed a sale. An even
exchange of tangible personal properties shall not be
deemed a sale for purposes of this act, but in any transac-
tion wherein tangible personal property is taken as part of
the sales price of other tangible personal property, the bal-
ance valued in money or other consideration shall be
deemed a sale.
* * *
(h) The word ‘‘tax’’ means either the tax payable
by the purchaser of a commodity or service subject to
tax, or the aggregate amount of taxes due from the vendor
of such commodities or services during the period for
which he is required to report his collections, as the con-
text may require.
59-15-4, Excise tax — Rate. — From and after the
effective date of this act there is levied and there shall
be collected and paid:
(a) A tax upon every retail sale of tangible personal
property made within the state of Utah equivalent to
four per cent of the purchase price paid or charged, except
that where a person takes, as a trade-in for part payment
of the merchandise sold, tangible personal property other
than money, that tax shall be computed and paid only
upon the net difference between the selling price of the
merchandise sold and the amount of the trade-in allow-
ance. The sale of coal, fuel oil and other fuels shall not
be subject to tax except as hereinafter provided.
_ 99-15-5, Collection of tax — Remission — Returns —
Direct payment by purchaser of motor vehicle — Tokens —
Deposit of security and sale thereof — Remission of ex-
cess amount collected — Penalties and interest for viola-
tions — Fine or imprisonment. — Every person receiving
any payment or consideration upon a sale of property or
service subject to the tax under the provisions of this act,
or to whom such payment or consideration is payable
(hereinafter called the vendor) shall be responsible for
the collection of the amount of the tax imposed on said
A-26
sale; provided, however, that where any sale of tangible
personal property is made by a wholesaler to a retailer,
upon the representation by the said retailer that the said
personal property is purchased by the said retailer for
resale, and the said personal property thereafter is not
resold, the wholesaler shall not be responsible for the
collection or payment of the tax imposed on the said
sale, but the said retailer shall be solely liable for the
said tax. The vendor shall collect the tax from the vendee,
but in no ease shall he collect as tax an amount (without
regard to fractional parts of one cent) in excess of the
tax computed at the rates prescribed by this act, provided,
however, that on all motor vehicle sales made by other
than a regular licensed dealer the tax shall be paid by
the purchaser directly to the state tax commission upon
every sale of a motor vehicle subject to registration and
licensing under the laws of this state, and shall be col-
lected by the state tax commission at the time of such
registration and licensing. The tax imposed by this act
shall be due and payable to the state tax commission quar-
terly on or before the thirtieth day of the month next suc-
ceeding each calendar quarterly period, the first of such
quarterly periods being the period commencing with the
first day of January, 1953. Every vendor shall on or
before the thirtieth day of the month next succeeding each
calendar quarterly period, file with the commission a re-
turn for the preceding quarterly period. The return shall
be accompanied by a remittance of the amount of tax
herein required to be collected by the vendor for the
period covered by the return. The tax as computed in
the return shall in all cases be based upon the total sales
made during the period including both cash and charge
sales. Credit shall be allowed to the vendor for taxes paid
on sales represented by that portion of an account deter-
mined to be worthless and actually charged off for in-
come tax purposes or on the portion of the purchase
price remaining unpaid at the time of a repossession made
under the terms of a conditional sales contract. Such
returns shall contain such information and be made in
such manner as the tax commission may by regulation
Oe ee oe
A-27
prescribe. The state tax commission may extend the time
for making returns and paying the taxes collected under
such rules and regulations as it may prescribe, but no
such extension shall be for more than ninety days. The
state tax commission, if it deems it necessary in order to
ensure the payment of the tax imposed by this act, may
require returns and payment of the tax to be made for
other than quarterly periods.
If the acecanting methods regularly employed by the
vendor in the transaction of his business are such that
reports of sales made during a calendar month will im-
pose unnecessary hardships, the state tax commission may
accept reports at such intervals as will in its opinion
better suit the convenience of the taxpayer and will not
jeopardize the collection of the tax.
For the purpose of more efficiently securing the pay-
ment, collection and accounting for the taxes provided
for under this act, the tax commission in its discretion, by
proper rules and regulations, shall provide for the is-
suance of tokens or other appropriate devices to facilitate
collections; provided, no tax or token shall be collected
on lunches or dinners served by schools, churches, or char-
itable institutions.
The tax commission, whenever it deems it necessary
to ensure compliance with the provisions of this act, may
require any person, subject to the tax imposed hereunder
to deposit with it such security as the state tax commis-
sion shall determine. The same may be sold by the state
tax commission at public sale if it becomes necessary so
to do in order to recover any tax, interest or penalty due.
Notice of such sale may be served upon the person who
deposited such securities personally or by mail; if by mail,
notice sent to the last known address as the same appears
in the records of the state tax commission shall be suffi-
cient for the purposes of this requirement. Upon such
sale the surplus if any, above the amounts due under this
act, shall be returned to the person who deposited the
security.
A-28
If any vendor shall, during any reporting period col-
lect as a tax an amount in excess of two per cent of his
total taxable sales, he shall remit to the commission the
full amount of the tax herein imposed and also such ex-
cess; and if any vendor under the pretence or represen-
tation of collecting the tax imposed by this act shall col-
lect during any reporting period an amount in excess of
two per cent of his total taxable sales, the retention of
such excess or any part thereof, or the intentional failure
to remit punctually to the tax commission on the full
amount required to be remitted by the provisions of this
act, is declared to be unlawful and shall be punishable
by a fine of not exceeding $1,000 or by imprisonment for
not to exceed six months or both such fine and imprison-
ment.
Any person failing to pay any tax to the state or any
amount of tax herein required to be paid to the state
within the time required by this act, or file any return as
required by this act, shall pay, in addition to the tax, pen-
alties and interest as provided in section 59-15-8 hereof.
59-15-8. Overpayment and deficiencies. — As soon
as practicable after the return is filed, the tax commis-
sion shall examine it; if it then appears that the correct
amount of tax to be remitted is greater or less than that
shown on the return to be due, the tax shall be recomputed.
If the amount paid exceeds that which is due, the
excess, together with interest thereon at the rate of one-
half of one per cent per month from the date of overpay-
ment, and if it is determined that the original overpay-
ment was not intentionally made for purposes of invest-
ment, it shall be credited or refunded to the person paying
it upon written application therefor. If the commission
determines that any amount, penalty or interest has been
paid more than once or has been erroneously or illegally
collected or computed, the commission shall certify to the
state auditor the amount collected in excess of what was
legally due, from whom it was collected or by whom paid
to the commission, and the amount of interest computed
A-29
thereon, and if approved by the state auditor, it shall be
credited on any amounts then due from that person to
the state of Utah under this act or under any other taxing
act, the administration of which is vested in the commis-
sion and the balance shall be refunded to that person or
his successors, administrators, executors or assigns, but
no such credit or refund shall be allowed unless a claim
is filed with the state tax commission within three years
from the date of overpayment.
In the event any amount has been illegally deter-
mined to be due from any person, the commission shall
authorize the cancellation of the amounts upon its records.
If the amount paid is less than the amount dve, to
the difference shall be added interest thereon at the rate
of one-half of one per cent per month from the time the
return was due.
If any part of the deficiency is due to negligence or
intentional disregard of authorized rules and regulations
with knowledge thereof, but without intent to defraud,
there shall be added ten per cent of the total amount of
the deficiency and interest at the rate of one percent
per month on the amount of the deficiency from the
time the return was due. If any part of the deficiency is
due to fraud with the intent to evade, there shall be added
one hundred per cent of the total amount of the deficiency
and interest at the rate of one per cent per month on the
deficiency from the date the return was due.
The deficiencies in tax, together with penalties and
interest imposed by this section, shall be due and payable
by the taxpayer within ten days after notice and demand
by the tax commission; except that when the commission
determines that a greater amount was due than was shown
on the return, and the tax is not deemed to be in jeopardy,
the additional tax, penalty and interest shall be due pay-
able within thirty days after the commission mailed its
report of deficiency determination.
Except in the case where a deficiency is due to fraud
with intent to evade tax or a failure to file a return, the
A-30
amount of taxes imposed by this chapter shall be assessed
within three years after the return was filed and if not
so assessed no proceeding for the collection of the taxes
shall be begun after the expiration of the period.
In the case of a false or fraudulent return or payment
with intent to evade tax or of failure to file a return, the
tax may be assessed or a proceeding for the collection
of the tax may be begun without assessment at any time.
Upon making a record of its reasons, the commission
shall have the power, in its discretion, to waive, reduce or
compromise any of the penalties or interest provided in
this chapter.
59-15-11. Collection of tax by warrant. -—- A tax due
and unpaid under this act shall constitute a debt due the
state from the vendor and may be collected, together with
interest, penalty and costs, by appropriate judicial pro-
ceeding, which remedy shall be in addition to all other
existing remedies.
If the tax imposed by this act or any portion thereof
is not paid when the same becomes due and if the vendor
liable for the payment of the amount has not regularly
followed the procedure outlined in sections 59-15-12,
59-15-13, 59-15-14, 59-15-15, and 59-15-16 hereof, the tax
commission may issue a warrant in duplicate, under its of-
ficial seal, directed to the sheriff of any county of the
state commanding him to levy upon and sell the real and
personal property of a delinquent taxpayer found within
his county for the payment of the amount due thereof,
with the added penalties. interest, and costs and to return
such warrant to the tax commission and pay to it the
money collected by virtue thereof by a time to be therein
specified, not more than sixty days from the date of the
warrant. Immediately upon receipt of said warrant in
duplicate the sheriff shall file the duplicate with the clerk
of the district court in his county and thereupon the clerk
shall enter in the judgment docket, in the column for
judgment debtors, the name of the delinquent taxpayer
mentioned in the warrant and, in appropriate columns,
eo
A-31
the amount of tax, penalties, interest and costs for which
the warrant is issued and the date when such duplicate is
filed, and thereupon the amount of such warrant so dock-
eted shall have the force and effect of an execution against
all personal property of the delinquent taxpayer and
shall also become a lien upon the real property of the de-
linquent taxpayer in the same manner as a judgment duly
rendered by any district court and docketed in the office
of the clerk thereof. The sheriff shall thereupon proceed
upon the same in all respects, with like effect, and in the
same manner as is prescribed by law in respect to execu-
tions issued against property upon judgments of a court
of record and shall be entitled to the same fees for his
services in executing the warrant, to be collected in the
same manner.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.