Amicus Curiae Brief — Oklahoma Tax Commission v. Sac & Fox Nation
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No. 92-259
In The
Supreme Court of the United States
October Term, 1992
+
OKLAHOMA TAX COMMISSION,
Petitioner,
V.
SAC AND FOX NATION,
Respondent.
+
On Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
e
BRIEF OF THE NAVAJO NATION AND
THE PUEBLO OF LAGUNA AS AMICI CURIAE
IN SUPPORT OF THE RESPONDENT
r
Hers YAZZIE, Paut E. Frvre*
Attorney General Wayne H. BLADH
MARCELINO R. Gomez Lisa M. ENFIELD
STANLEY M. POLLACcK Of Counsel
Navajo Nation Department NorpxHaus, Hattom, TayLor,
of Justice TARADASH & FrvE
Post Office Drawer 2010 Suite 1050
Window Rock, Navajo 500 Marquette Avenue NW
Nation (AZ) 86515 Albuquerque, NM 87102
(602) 871-6343 (505) 243-4275
Attorneys for the Attorneys for Amici Curiae
Navajo Nation
* Counsel of Record
COCKLE LAW BRIEF PRINTING CO., (800) 225 6964
OR CALL COLLECT (402) 42-283
TABLE OF CONTENTS
Page
CED GEE FRAP E PPO O UE ooo vi ccccvcccccvccceseces iii
INTEREST OF THE AMICI CURIAE................ 1
SE EE CIPS 6 osc ce ccevcccecsececcusene 4
SUMMARY OF ARGUMENT...................0005. 7
£55 5 gn eee 6d6 4046404060045 400006008 10
I. “INDIAN COUNTRY” PROVIDES THE TERRI-
TORIAL BENCHMARK FOR ALLOCATING
FEDERAL, TRIBAL AND STATE GOVERN-
PE CEE ce ccbsccscdccesesoveces 10
Il. CONGRESS HAS NOT AUTHORIZED OKLA-
HOMA TO TAX SAC AND FOX MEMBERS
EMPLOYED IN SAC AND FOX INDIAN
EE, ShGA5 ba Cds 00h 4as Bdénceetvevesseees 14
A. McClanahan Applies Throughout “Indian
DE, SS GnSRUNSSUS 065406 sk v0ncsone cess 14
B. The 1891 Sac and Fox Allotment Agreement
Does Not Grant Oklahoma the Power to Tax
the Income of Tribal Members Employed in
TED RENIN ss cccsccccesccenccnevcceces 16
C. The Same Considerations Which Confirmed
the Holding in McClanahan Apply to This
SE Sule Geb ee be s00¥bN505 540600005400 dee. 18
i cctvctepsceged eevee cece. 18
Bo Gee Beware ALT nc. cccccccccees 20
Pe Fs GD ED vccccccccesseccesees 20
4. IMPLICATION OF NARROWER STAT-
UTES AUTHORIZING STATE TAXA-
Pee Se Es vc vccccvccscssevcs 21
| 8 Sr rrr rrr TT Tre 21
TABLE OF CONTENTS - Continued
Page
D. Oklahoma’s Terminationist Arguments
Implicate Issues Within the Exclusive
Authority of Congress............0eeeeees 24
III. OKLAHOMA’S ATTEMPT TO CIRCUMVENT
MOE SHOULD BE REJECTED................ 27
A. Oklahoma’s Vehicle Excise Tax May Not Be
Imposed on Vehicle Transfers Occurring
Within Indian Country ............++5005. 27
B. Oklahoma’s Vehicle and License Registra-
tion Fee Is an Unlawful Tax on Property
Within Indian Country..............05006: 28
CONCLUSION .. wc cccccccsccccssccssssseseeneeeeeee 30
“a
TABLE OF AUTHORITIES
Page
Cases
Ahboah v. Housing Auth. of Kiowa Tribe, 660 P.2d
ee cede cccceccececcccccccsc: 16, 20
Alaska v. Native Village of Venetie, 856 F.2d 1384
CEP E ean cesecescccccescecescces 13
Alonzo v. United States, 249 F.2d 189 (10th Cir.
1957), cert. denied, 355 U.S. 940 (1958)............. 2
Atlantic and Pacific R.R. v. Mingus, 165 U.S. 413
CCE E ECan eescccccccecccccccsccces: 18
Brendale v. Confederated Yakima Indian Nation,
EEE 18
Bryan v. Itasca County, 426 U.S. 373 (1976)... 4, 15, 16, 26
C.M.G. v. State, 594 P.2d 798 (Okla. Crim. App.),
cert. denied, 444 U.S. 992 (1979).................. 20
California v. Cabazon Band of Mission Indians,
I cc cccccccccccccccce: 9, 13, 18, 19
Central Machinery v. Arizona Tax Comm'n,
See pede ccc cecccsccccccccsces 27
Choteau v. Burnet, 283 U.S. 690 (1931)........... 21, 24
County of Yakima v. Yakima Indian Nation,
ee ce ncccececcceccess: 15, 16, 19
Cravatt v. State, 825 P.2d 277 (Okla. Crim. App.
UCR eG eecsccccccccesesesscccccss 20
DeCoteau v. District County Court, 420 U.S. 425
ne gt ccc ccccccccce 10, 13, 15, 16
Donnelly v. United States, 228 U.S. 243 (1913)....... 11
iv
TABLE OF AUTHORITIES - Continued
Page
Eastern Band of Cherokee Indians v. Lynch,
632 F.2d 373 (4th Cir. 1980).......... 2.662 e eee 13
Educational Films Corp. v. Ward, 282 U.S. 379
SIP oc vvcceccccesncaccncenccecensscescsensececten 28
Elk v. Wilkins, 112 U.S. 94 (1884)................ 23, 24
Housing Auth. of the Seminole Nation v. Harjo,
790 P.2d 1098 (Okla. 1990)...........0. cece eee eens 20
Indian Country U.S.A., Inc. v. Oklahoma Tax
Comm’‘n, 829 F.2d 967 (10th Cir. 1987), cert.
denied, 487 U.S. 1218 (1988)..............0055. 13, 20
Irving v. Watt, 11 Indian L. Rep. (Am. Indian Law.
Training Program) 3009 (D. D. 1983), rev'd on
other grounds, 758 F.2d 1260 (8th Cir. 1985),
Se, Ge Gee Ce GN cb dececccsscckusiecssnces 4
Kansas Indians, 72 U.S. (5 Wall.) 737 (1867).......... )
Kennerly v. District Court, 400 U.S. 423 (1971)...... 13
Kerr-McGee Corp. v. Navajo Tribe of Indians,
Ge Weak: Se Ge kde cdccescunadéesecessnénacents 7
Leahy v. State Treasurer of Oklahoma, 297 U.S. 420
6 0:6000006540080840s0dddsceenedhsdbdeebeneehen 24
McClanahan v. Arizona Tax Comm'n, 411 U.S. 164
CUDUED ccccccccccccccccceccessecccccosesesevess passim
Mescalero Apache Tribe v. Jones, 411 U.S. 145
Pea cescésvcecscisescestiskecadenekenatennes 19, 27
Moe v. Confederated Salish and Kootenai Tribes, '
§ | 2 ener er rrr rer passim
Montana v. Blackfeet Tribe of Indians, 471 U.S. 759
Ss acesccneseeseducnseusssseucaneens 8, 16, 19, 23
v
TABLE OF AUTHORITIES - Continued
Page
Morton v. Mancari, 417 U.S. 535 (1974).............. 24
Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439
(D.C. Cir. 1988), cert. denied, 488 U.S. 1010
SEG OS hOsdehasuesnddnesussdscwcawensduceneans 7, 25
National Farmers Union Ins. Cos. v. Crow Tribe,
Se Ge CE bnctcncdaduecnsaccdbdodsciouse: 17
Navajo Nation v. New Mexico, 975 F.2d 741 (10th
See SUE nds dckucsncdcdendsoudunenesdderdssiscsecas 2
Oklahoma Tax Comm’‘n v. Citizen Band
Potawatomi Indian Tribe, 111 S. Ct. 905
DCA NCRUSKEedKCeneeeodudsdeNkeliancabbegeee, passim
—s & Midway Coal Mining Co. v. Saunders,
IV 86-1442 M (D.N.M. Aug. 22, 1988),
rev'd on other grounds, 909 F.2d 1387 (10th
Cir.), cert. denied, 111 S. Ct. 581 (1990)............ 2
Ramah Navajo School Bd. v. Bureau of Revenue,
ee es ee Ss dosacienteduccddueecucetenes 2,3
Richardson v. Malone, 762 F. Supp. 1463 (N.D..
Ss Gb hncanencédcsnctuoosnssdeusaueaecuenses 20
Rosebud Sioux Tribe v. South Dakota, 900 F.2d
1164 (8th Cir. 1990), cert. denied, 111 S. Ct. 2009
DNGKGEM Cadet ast enenkikéusuceunsuneawennes eeuee 13
Ross v. Neff, 905 F.2d 1349 (10th Cir. 1990) ......... 20
Santa Rosa Band of Indians v. Kings County, 532
F.2d 655 (9th Cir. 1975), cert. denied, 429 U.S.
ST ensensecdedentncdeduesdascomeussendchn 26
State v. Klindt, 782 P.2d 401 (Okla. Crim. App.
Sees 6 Sdn6ddcadanhuucdebeubiddessasnecanseueneaue 20
vi
TABLE OF AUTHORITIES - Continued
Page
Tenneco Oil Co. v. Sac and Fox Tribe, 725 F.2d 572
SD GE CE cercccesvceccencescetusesvouacuces 25
Tiger v. Western Investment Co., 221 U.S. 286
Dr dennecesasenebenceseesecoscevessesss 12, 17, 20
United States v. Chavez, 290 U.S. 357 (1933) ...... 3, 14
United States v. Holliday, 70 U.S. (3 Wall.) 407
DE sceisnadvdeddereeaennuneectanenhaveseennssss 24
United States v. John, 437 U.S. 634 (1978)..... 9, 11, 26
United States v. Martine, 442 F.2d 1022 (10th Cir.
REE er Se Tae sts ee eee 3
United States v. McGowan, 302 U.S. 535 (1938)...... 12
United States v. Pelican, 232 U.S. 442 (1914)...... 11, 30
United States v. Ramsey, 271 U.S. 467 (1926)..... 11, 14
United States v. Rickert, 188 U.S. 432 (1903)...... 24, 28
United States v. Sandoval, 231 U.S. 28 (1913)........ 11
United States v. Washington, 641 F.2d 1368 (9th
Cir. 1981), cert. denied, 454 U.S. 1143 (1982)...... 27
Warren Trading Post Co. v. Arizona Tax Comm‘n,
BD Ss Ge I cc cecctcccvcecsccsccccuccdesces 27
Washington v. Confederated Tribes of the Colville
Reservation, 447 U.S. 134 (1980) ..... 8, 10, 27, 28, 29
Washington v. United States Envtl. Protection
Agency, 752 F.2d 1465 (9th Cir. 1985) ............. 21
White Mountain Apache Tribe v. Bracker, 448 U.S.
f PPPPPTTTITITITIT TTT TTT TTT TTT ee 9, 17
Williams v. Lee, 358 U.S. 217 (1959).............. 12, 13
vii
TABLE OF AUTHORITIES - Continued
Williams v. United States, 327 U.S. 711 (1946)....... 14
Worcester v. Georgia, 31 U.S. (6 Pet.) 515 (1832)..... 14
TREATIES AND STATUTES
Treaty with the Wyandot, etc., 1789, II Charles J.
Kappler, Indian Affairs: Laws and Treaties 18
GI cc cccerccesccncencesccccccsdenencseccossosees 4
Treaty with the Sauk and Foxes, 1804, II Charles J.
Kappler, Indian Affairs: Laws and Treaties 74
Dc siusetaensiasdshueheanbeeaanaaeweuneteeences 5
Treaty with the Sauk, 1815, II Charles J. Kappler,
Indian Affairs: Laws and Treaties 120 (1904)....... 5
Treaty with the Foxes, 1815, II Charles J. Kappler,
Indian Affairs: Laws and Treaties 121 (1904)....... 5
Treaty with the Sauk, 1816, II Charles J. Kappler,
Indian Affairs: Laws and Treaties 126 (1904)....... 5
Treaty with the Sauk and Foxes, 1867, Ii Charles J.
Kappler, Indian Affairs: Laws and Treaties 951
DNC undccauceddensdiahtayccultousnctudesiessce 6
accuse ceusawe 21, 23
I oo vvcunksncsecenses 1, 3, 12, 14, 15, 26
18 U.S.C.A. § 1151 (West 1984)............cccceeeeee 12
ree ee 12
aa eas 2
RI I coon oa he 7
SE een a hee 12
ke SRR Se nD a ane Re hone 12, 15
viii
TABLE OF AUTHORITIES — Continued
Page
TD UDG. 0 BBs siccccvivscccvesccsccsssccescsevcvsen 4
BD TA © We cv civic icvcesccsscsnccssenscccccessi 12
Act of July 22, 1790, ch. 33, 1 Stat. 137 (1845)....... 10
Act of May 19, 1796, ch. 30, 1 Stat. 469 (1845) ...... 10
Act of June 30, 1834, ch. 161, 4 Stat. 729 (1846) ..... 11
Act of February 13, 1891 ch. 165, 26 Stat. 749....... 16
Act of June 16, 1906, ch. 3335, 34 Stat. 267.......... 20
Act of August 15, 1953, ch. 505, 67 Stat. 588........ 12
Act of June 13, 1962, P.L. 87-482, 76 Stat. 96......... 3
OTHER AUTHORITIES
44 Fed. Reg. 7235 (1979)....... 200 c cece e cence enees 7
84 Cong. Rec. 10,094 (1939)......... 6c cece eee eens 21
84 Cong. Rec. 10,685 (1939)... 0.0... . cece cece eee eens 22
84 Cong. Rec. 10,907 (1939) ........ 2. cece eee cece ees 22
H.R. Rep. No. 2408, 74th Cong., 2d Sess. (1936)...... 7
S. Rep. No. 436, 74th Cong., Ist Sess. (1935) ........ 22
S. Rep. No. 1625, 76th Cong., 3d Sess. (1940)........ 23
Hearings Before a Subcommittee of the Senate
Committee on Finance on H.R. 6687, 76th
Cong... 36 Saas. (19GB)... cccccccccccccccccccvees 22
Powers of Indian Tribes, 55 I.D. 14 (1934)............ 7
ix
TABLE OF AUTHORITIES - Continued
Page
Judicial and Departmental Construction of the
Words “Indian Reservation”, II Op. Solic. Inte-
Se Re Ce SE 6h etc rccresseecoossececciees 13,
Felix S. Cohen, Handbook of Federal Indian Law
(1942) (University of New Mexico Press reprint
EE 6. nb0:0056050000050000060055060450 005000408005" 11
Felix S. Cohen’s Handbook of Federal Indian Law
(R. Strickland ed. 1982)................ 13, 17, 19, 24
Paul E. Frye, Lender Recourse in Indian Country:
A Navajo Case Study, 21 N.M. L. Rev. 275
SUSE Voseresercvadencscoesenceabessssepevessssies 4
William T. Hagan, The Sac and Fox Indians (1958) .. .5, 6
Joseph L. Singer, Sovereignty and Property, 86
Fe Ce ie NE OE ececcoscndceennnssacsicsées 19
United States Dep’t of Commerce, Federal and
State Indian Reservations and Trust Areas
(1974) (USGPO stock #0311-00076) ........... 27,
No. 92-259
¢
In The
Supreme Court of the United States
October Term, 1992
.
OKLAHOMA TAX COMMISSION,
Petitioner,
SAC AND FOX NATION,
Respondent.
¢
On Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
r
BRIEF OF THE NAVAJO NATION AND
THE PUEBLO OF LAGUNA AS AMICI CURIAE
IN SUPPORT OF THE RESPONDENT
¢
INTEREST OF THE AMICI CURIAE
This case concerns Oklahoma’s attempt to tax the
income and motor vehicles of Sac and Fox tribal members
who earn their income and garage their vehicles in Sac
and Fox Indian country. In effect, Oklahoma urges that
the Court distinguish prior cases invalidating analogous
taxes solely because most of the Sac and Fox tribal terri-
tory is Indian country by virtue of 18 U.S.C. § 1151(b) and
(c), rather than 18 U.S.C. § 1151(a), which identifies
Indian reservations as one category of Indian country.
The Navajo Nation and Pueblo of Laguna govern and
provide extensive governmental services for large areas
1
2
which carry no formal “reservation” designation. Much
of the 2.8 million acre Navajo “checkerboard” area in
New Mexico is outside formal reservation boundaries,
but consists of an overwhelmingly Navajo land base and
population, who depend on tribai and federal, rather
than state, services.! The Pueblo of Laguna lands exceed
450,000 acres of restricted fee land, Executive Order reser-
vation land, land acquired in trust under the Indian Reor-
ganization Act, 25 U.S.C. § 465, and trust allotments
within the tribal territory.?
Amici curiae Navajo Nation and the Pueblo of Laguna
have vital interests in preserving immunities from state
taxes in all of Indian country. Some of the lands of the
Pueblo of Laguna are not formally designated as an
Indian “reservation,” but, rather, have the status of a
1 The Navajo Nation government payroll exceeds
$100,000,000. The states provide few services in Navajo Indian
country. See Ramah Navajo School Bd. v. Bureau of Revenue, 458
U.S. 832, 834 n.1 (1982) (referring to the “tribal children aban-
doned by the State” in the off-reservation Ramah Navajo com-
munity); Navajo Nation v. New Mexico, 975 F.2d 741, 745 (10th Cir.
1992) (New Mexico’s unlawful diversion of funds intended for
Navajos under Title XX of the Social Security Act was motivated
by “discriminatory intent”); Pittsburg & Midway Coal Mining Co.
v. Saunders, No. CIV 86-1442 M (D.N.M. Aug. 22, 1988), repro-
duced at 909 F.2d 1387, Appendix C at 1437 (10th Cir. 1990)
(“The contribution of the State of New Mexico is small .... The
[Navajo] Tribe proved up many more indications, too numerous
to detail here, of the dominance of the Navajo Nation over life”
in a disputed reservation area in the Eastern Navajo Agency.),
rev'd on other grounds, 909 F.2d 1387 (10th Cir.), cert. denied, 111 S.
Ct. 581 (1990).
2 United States Dep’t of Commerce, Federal and State Indian
Reservations and Trust Areas 359 (1974) (USGPO stock
#0311-00076). See Alonzo v. United States, 249 F.2d 189 (10th Cir.
1957), cert. denied, 355 U.S. 940 (1958).
3
dependent Indian community under 18 U.S.C. § 1151(b).°
Laguna tribal members occupied Pueblo lands before
1700, and members of the Pueblo work at tribal head-
quarters on land granted in fee by Spain. The Pueblo
government not only provides traditional governmental
services, but has also established on its lands Laguna
Industries, Inc. and Laguna Construction Company, the
two largest employers of its tribal members.
Similarly, the Ramah Navajo community is not for-
mally designated as an Indian reservation, but is a depen-
dent Indian community.* Under the federal policy
favoring Indian self-determination and following this
Court’s invalidation of certain state gross receipts taxes in
Ramah Navajo School Bd. v. Bureau of Revenue, 458 U.S. 832
(1982), the Navajo Nation has made great advances in
providing educational opportunities and governmental
services to the Ramah Navajo community.
Many Navajo tribal members are employed by the
Navajo Nation on other tribal trust lands with no formal
reservation designation, and these tribal members are
engaged not only in providing essential governmental
services but also in, for example, farming on trust lands
provided by Congress for the 110,630-acre Navajo Indian
Irrigation Project. See Act of June 13, 1962, P.L. 87-482, 76
Stat. 96. These and other Navajo tribal trust lands
“qualif[y] as a reservation for tribal immunity purposes.”
See Oklahoma Tax Comm'n v. Citizen Band Potawatomi
Indian Tribe, 111 S. Ct. 905, 910 (1991).
3 See United States v. Chavez, 290 U.S. 357 (1933).
4 See United States v. Martine, 442 F.2d 1022, 1023 (10th Cir.
1971).
4
In addition, the Navajo Nation and the Pueblo of
Laguna both exercise jurisdiction over trust allotments
within their tribal territories. These allotments form a
significant part of the tribal land base, and the tribes have
acquired undivided fractional trust interests in hundreds
of these allotments pursuant to the amended “escheat”
provision of the Indian Land Consolidation Act, which
promotes the return to tribal trust status of all allotments
under tribal jurisdiction.®
Because of federal and state neglect, the Navajo
Nation and Pueblo of Laguna face staggering housing
and infrastructure deficits.© Thus, many tribal employees
must live in off-reservation border towns and commute to
tribal offices. Burdening further these tribal employees
with state taxes on income derived solely from their tribal
employment would seriously undermine the ability of the
tribes to attract and retain the highly qualified tribal
members needed for effective governmental operations
and would dilute the already thin tribal tax base. See
Bryan v. Itasca County, 426 U.S. 373, 388 n.14 (1976).
STATEMENT OF FACTS
In 1789, the United States “receive[d] into their
friendship and protection, the nations of the . . . Sacs”
Treaty with the Wyandot, etc., 1789, 11 Charles J. Kappler,
5 25 U.S.C. § 2206. One court has observed that it is “only a
matter of time” before the tribes will own all of the allotments.
See Irving v. Watt, 11 Indian L. Rep. (Am. Indian Law. Training
Program) 3009, 3010 n.2 (D.S.D. 1983), rev'd on other grounds, 758
F.2d 1260 (8th Cir. 1985), aff'd, 481 U.S. 704 (1987).
6 See Paul E. Frye, Lender Recourse in Indian Country: A
Navajo Case Study, 21 N.M. L. Rev. 275, 278-80 (1991).
5
Indian Affairs: Laws and Treaties (hereinafter “II Kappler”)
18, 21 (1904). Again, in 1804, the “United States receive[d]
the united Sac and Fox tribes into their friendship and
protection, and the said tribes agree[d] to consider them-
selves under the protection of the United States and no
other power whatsoever.” Treaty with the Sauk and Foxes,
1804, Il Kappler at 74.
The 1804 Treaty, whereby a delegation of the Sac and
Fox purported to cede Illinois and parts of two other
states in exchange for gifts and $1000 in annuities, set the
stage for future discord. William T. Hagan, The Sac and
Fox Indians 21-25 (1958). Led by Sac warrior Black Hawk,
the Sac and Fox joined the British in the War of 1812,
defeating Zachary Taylor’s command at Rock River in
1814. Id. at 67-72. After the war, the United States again
sought peace with the Sac and Fox, and entered into
treaties with the various bands. Treaty with the Sauk, 1815,
Il Kappler at 120; Treaty with the Foxes, 1815, Il Kappler at
121; Treaty with the Sauk, 1816, Il Kappler at 126. In
conformity with the Treaty of Ghent, these treaties placed
the tribes on the same footing as they stood before the
war, and confirmed the 1804 Treaty. See Treaty with the
Sauk, 1816, Il Kappler at 126 (Preamble).
The United States entered into other treaties with the
Sac and Fox in 1822, 1824, 1825 and 1830. II Kappler at
202, 207, 250 and 305. After Black Hawk’s “British Band”
of forty warriors routed a militia of three to four hundred
men and after depredations by allied tribes were
reported, President Jackson assigned Generals Winfield
Scott and Henry Atkinson to subdue Black Hawk and his
followers, which they did in 1832. The Sac and Fox Indians
at 159-69. A party of Winnebagos captured Black Hawk,
who was turned over to Colonel Zachary Taylor, who in
turn placed Black Hawk under the guard of Lieutenant
6
Jefferson Davis. Id. at 195. Another treaty followed,
ceding additional land. II Kappler at 349.
From 1832 to 1861, the United States entered into ten
more treaties with the Sac and Fox, who moved from
state to state and reservation to new reservation. Id. at
468, 473, 474, 476, 495, 497, 546, 631, 796 and 811. The
final treaty with the Sac and Fox was ratified in 1868.
Treaty with the Sauk and Foxes, 1867, Il Kappler at 951. In
it, the United States agreed to establish a new reservation
for the Sac and Fox “in the Indian country south of
Kansas,” and to pay for subsistence “for the first year
after their arrival at their new home in the Indian coun-
try.” Id. at 952, 954.
The new Sac and Fox homeland remained intact for
23 years. In 1891, the Dawes Severalty Act was applied
there, supported by only a “small minority” of tribal
members. The Sac and Fox Indians at 255. Some tribal
members selected contiguous allotments so that the allot-
mcnts could continue to be used as common land. Id. at
257. However, most of the allotments were almost imme-
diately leased to unscrupulous whites because of a lack of
Indian capital and fractionated heirships. Id. at 257-58.
Worse yet, Oklahoma unlawfully imposed a heavy tax
burden on personal property and productive activity on
the allotments. Id. at 258. Oklahoma’s tax scheme pre-
vented the Sac and Fox “ ‘from making improvements,
has caused many to scatter and leave the Reservations,
prevented others that were away from returning, demor-
alized and discouraged them from trying to advance in
civilization.’ ” Id. (quoting an 1893 memorandum to the
Commissioner of Indian Affairs).
Prior to 1936, the Bureau of Indian Affairs allowed
tribal self-determination for the Sac and Fox “as long as it
7
was confined to innocuous matters.” Id. at 259. In 1936,
however, Congress abandoned the assimilationist philos-
ophy for Indians in Oklahoma, and passed the Oklahoma
Indian Welfare Act (“OIWA”), 25 U.S.C. §§ 501-509. The
OIWA was intended to “permit the Indians of Oklahoma
to exercise substantially the same rights and privileges as
those granted to Indians outside of Oklahoma by the
[Indian Reorganization Act of 1934].” H.R. Rep. No. 2408,
74th Cong., 2d Sess. 3 (1936). See Muscogee (Creek) Nation v.
Hodel, 851 F.2d 1439, 1443-46 (D.C. Cir. 1988), cert. denied,
488 U.S. 1010 (1989); Powers of Indian Tribes, 55 1.D. 14
(1934).
Pursuant to the OIWA, the Sac and Fox reorganized
their tribal government under a new constitution.” The
Sac and Fox government is recognized by the United
States. 44 Fed. Reg. 7235, 7236 (1979). Federal policies
now support tribal self-determination and a government-
to-government relationship between the tribes and the
United States. Kerr-McGee Corp. v. Navajo Tribe of Indians,
471 U.S. 195, 200-01 (1985).
Oklahoma seeks here to inaugurate a new, lower
class of tribal governmental status for the Sac and Fox,
solely because the Sac and Fox assertedly have no for-
mally designated reservation boundaries.® State taxation
of tribal members and their personal property in the
Tribe’s Indian country would do just that.
? Federal and State Indian Reservations and Trust Areas, supra
n.2, at 473.
8 The United States holds 805 acres in trust for the tribe and
over 17,000 acres of Sac and Fox allotments in trust status.
Federal and State Indian Reservations and Trust Areas, supra n.2, at
472.
8
SUMMARY OF ARGUMENT
This case involves the applicability of state taxes to
tribal Indians who work and own property in Indian
country. The need to end the “case-by-case litigation
which has plagued this area of the law” has been recog-
nized. Washington v. Confederated Tribes of the Colville Res-
ervation, 447 U.S. 134, 177 (1980) (Rehnquist, J.,
concurring and dissenting). The Court of Appeals cor-
rectly and succinctly applied the standards established by
this Court; Oklahoma ignores them and would replace an
examination of Congressional intent with a burdensome
and unworkable series of individualized inquiries.
The Court has established a clear test for cases such
as this one: state taxation of Indians in Indian country is
unlawful unless Congress has expressly conferred that
authority in unmistakably clear terms. Montana v. Black-
feet Tribe of Indians, 471 U.S. 759, 764-65 (1985). Oklahoma
can point to no such Congressional authorization to tax
the Sac and Fox. Rather, Oklahoma attempts to extend
state taxation over Sac and Fox trust lands on the
grounds that the Tribe’s 1868 treaty reservation was dis-
established and that the Sac and Fox Indians are suffi-
ciently assimilated to shoulder the added burden.
Petitioner’s Brief at 12-14.
Oklahoma and the amici curiae supporting Oklahoma
would have the courts conduct a “particularized inquiry
into the state, federal and tribal interests” in each case
where states seek to tax Indians in their tribal territory.
Petitioner’s Brief at 7; Brief of Amicus Curiae United
States at 8; Brief of Amici Curiae Arizona, et al., at 4. The
United States would require the federal courts to deter-
mine which of the Indian people “live and work as part
of a reservation community.” Brief of Amicus Curiae
United States at 20. Oklahoma and its amici would also
9
require the courts to determine the degree of assimilation
of each putative Indian taxpayer. Petitioner’s Brief at 13;
Brief of Amicus Curiae United States at 19; Brief of Amici
Curiae Arizona, et al., at 11 n.6. Under Oklahoma’s
approach, what should be a focused examination of Con-
gressional intent would degenerate into annual battles of
expert anthropologists and sociologists arguing over
which of the 2500 or so Sac and Fox are assimilated
enough to be penalized by Oklahoma’s taxes.
No such burdensome and demeaning hearings need
be conducted. As long as the government of the Sac and
Fox people “is preserved intact, and recognized by the
political department of the government as existing, then
they are a ‘people distinct from others’ . . . separated from
[state] jurisdiction.” McClanahan v. Arizona Tax Comm'n,
411 U.S. 164, 169 (1973), quoting The Kansas Indians, 72
U.S. (5 Wall.) 737, 755 (1867). Because Congress preserved
all sovereign powers of the Oklahoma tribes in the Okla-
homa Indian Welfare Act and because the Sac and Fox
government is federally recognized, the assimilation
issue is irrelevant. McClanahan, 411 U.S. at 172-73 & n.12;
Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463,
476 (1976); United States v. John, 437 U.S. 634, 652-53
(1978). The “particularized inquiry into the state, federal
and tribal interests” is appropriate only in cases involv-
ing state taxation of non-Indians. White Mountain Apache
Tribe v. Bracker, 448 U.S. 136, 144-45 (1980); McClanahan,
411 U.S. at 179; California v. Cabazon Band of Mission
Indians, 480 U.S. 202, 207 n.5 and 215 n.17 (1987).
McClanahan controls the income tax issue. Although
Mrs. McClanahan earned her income within formal reser-
vation boundaries, the reasoning of McClanahan encom-
passes all of Indian country and is in part predicated on
Indian country legislation. McClanahan, 411 U.S. at 169 &
10
n.4, 177-79. The Court confirmed this in DeCoteau v. Dis-
trict County Court, 420 U.S. 425, 427 n.2 (1975). Mrs.
McClanahan worked for a private employer within
Navajo Indian country. If, as this Court held, state taxes
on her income infringed on the right of the Navajo people
to make their own laws and be ruled by them,
McClanahan, 411 U.S. at 179, then Oklahoma’s taxes on
the income of Sac and Fox Indians who work for the Sac
and Fox Tribe in Sac and Fox Indian country must neces-
sarily violate tribal sovereignty. Absent an act of Con-
gress expressly allowing such taxes, they are unlawful.
The Court of Appeals properly discerned that Okla-
homa seeks to evade the holding of Moe v. Confederated
Salish and Kootenai Tribes, 425 U.S. 463 (1976), by simply
changing the characterization and means of collection of
its motor vehicle taxes. This Court has previously rejected
a similar attempt in Colville, 447 U.S. at 162-64, and
should do so again.
No act of Congress authorizes Oklahoma’s taxes of
the Sac and Fox people or of Indian property in Sac and
Fox Indian country. Thus, the state taxes are unlawful
and the decision below should be affirmed.
ARGUMENT
I. “INDIAN COUNTRY” PROVIDES THE TERRI-
TORIAL BENCHMARK FOR ALLOCATING FED-
ERAL, TRIBAL AND STATE GOVERNMENTAL
AUTHORITY.
Congress first used the term “Indian country” in the
original Trade and Intercourse Act of July 22, 1790, ch. 33,
1 Stat. 137 (1845). The term was not defined until the Act
of May 19, 1796, ch. 30, 1 Stat. 469 (1845). In the 1796 act
11
and in those following it, “the term ‘Indian country’ is
used as descriptive of the country within the boundary
lines of the Indian tribes.” Felix S. Cohen, Handbook of
Federal Indian Law 6 (1942) (University of New Mexico
Press reprint n.d.).
“Indian country” was defined again in the Act of
June 30, 1834, ch. 161, 4 Stat. 729 (1846). This act included
both civil provisions (trader licensing and passport
requirements) and criminal provisions, and applied the
same definition of “Indian country” to both. The Revised
Statutes failed to include the 1834 “Indian country” defi-
nition and it was therefore repealed. Because of the statu-
tory void, however, the Court continued to refer to the
1834 definition. See United States v. John, 437 U.S. 634, 649
n.18 (1978).
After 1334, in response to changing conditions, this
Court expanded the scope of Indian country as defined in
the 1796 act. Id. The Court focused on whether land was
““validly set apart for the use of the Indians as such,
under the superintendence of the Government.’ ” Okla-
homa Tax Comm’‘n v. Citizen Band Potawatomi Indian Tribe,
111 S. Ct. 905, 910 (1991), quoting United States v. John, 437
U.S. 634, 648-49 (1978). The Court determined that execu-
tive order reservations, off-reservation allotments,
restricted fee allotments in Oklahoma, and other land set
apart by the United States for the Indian people constitu-
ted Indian country. Donnelly v. United States, 228 U.S. 243
(1913) (executive order reservation); United States v. Sand-
oval, 231 U.S. 28 (1913) (Pueblo lands in New Mexico held
in communal fee); United States v. Pelican, 232 U.S. 442
(1914) (allotment in disestablished reservation); United
12
States v. Ramsey, 271 U.S. 467 (1926) (restricted fee allot-
ment in Oklahoma); United States v. McGowan, 302 U.S.
535 (1938) (land set aside for Reno Indian Colony).
Congress has plenary authority in Indian affairs, e.g.,
Tiger v. Western Investment Co., 221 U.S. 286, 311 (1911),
and in 1948 Congress codified the Court’s Indian country
decisions. 18 U.S.C. § 1151. See Reviser’s note following
18 U.S.C.A. § 1151 (West 1984). Soon thereafter, Congress
demonstrated its understanding that “Indian country”
defines the area where state criminal and civil laws gen-
erally do not apply. Section 2 of the Act of August 15,
1953, ch. 505, 67 Stat. 588, known as P.L. 280, provided
that five states —- not including Oklahoma - would have
jurisdiction over violations of the states’ criminal law in
the “areas of Indian country” listed. See 18 U.S.C.
§ 1162(a). Section 4 of P.L. 280 provided that the same five
states would have “jurisdiction over civil causes of
action .. . in the areas of Indian country listed.” 28 U.S.C.
§ 1360(a).
In 1968, Congress amended P.L. 280 to require tribal
consent before states could assume jurisdiction in Indian
country. Again, Congress used the term “Indian country”
in describing the territory over which state criminal and
civil jurisdiction could be extended with tribal consent. 25
U.S.C. §§ 1321(a), 1322(a). Accordingly, this Court con-
cluded that Congress intended “Indian country” to define
generally the limits of state authority in civil matters
involving Indian interests. See Williams v. Lee, 358 U.S.
13
217, 220-23 & n.6 (1959); Kennerly v. District Court, 400
U.S. 423, 424-25 & n.1 and 427-29 (1971); McClanahan, 411
U.S. at 177-78.
This Court unequivocally affirmed this conclusion in
1975. Citing Williams, Kennerly, and McClanahan, the
Court in DeCoteau v. District County Court, stated:
While [18 U.S.C.] § 1151 is concerned, on its
face, only with criminal jurisdiction, the Court
has recognized that it generally applies as well
to questions of civil jurisdiction.
420 U.S. 425, 427 n.2. The Court recently confirmed the
vitality of this conclusion. California v. Cabazon Band of
Mission Indians, 480 U.S. 202, 207 n.5 (1987). The tribal
territory is, and has been for more than 200 years, “Indian
country.” Felix S. Cohen’s Handbook of Federal Indian Law 27
(R. Strickland ed. 1982).9 The reservation “bright line”
posited by Arizona, Brief of Amici Curiae Arizona, et al.,
at 11, is an illusion. Oklahoma Tax Comm'n v. Citizen Band
of Potawatomi Indian Tribe, 111 S. Ct. 905, 910 (1991). The
proposition that Indians are protected from state taxation
only on formally designated reservations ignores the
many other ways by which the United States has set aside
lands for the use and benefit of Indian people.
% Accord Rosebud Sioux Tribe v. South Dakota, 900 F.2d 1164,
1165 n.1 (8th Cir. 1990), cert. denied, 111 S. Ct. 2009 (1991); Alaska
v. Native Village of Venetie, 856 F.2d 1384, 1390 (9th Cir. 1988);
Indian Country U.S.A., Inc. v. Oklahoma Tax Comm'n, 829 F.2d 967,
973 (10th Cir. 1987), cert. denied, 487 U.S. 1218 (1988); Eastern
Band of Cherokee Indians v. Lynch, 632 F.2d 373, 379 n.31 (4th Cir.
1980). See Judicial and Departmental Construction of the Words
“Indian Reservation”, 11 Op. Solic. Interior Dep’t 1378 (1945)
(neither the courts nor the Department of the Interior have ever
attempted to define the term “Indian reservation”; both have
been more concerned with the definition of “Indian country”).
14
Il. CONGRESS HAS NOT AUTHORIZED OKLA-
HOMA TO TAX SAC AND FOX TRIBAL MEM-
BERS EMPLOYED IN SAC AND FOX INDIAN
COUNTRY.
A. McClanahan Applies throughout “Indian Coun-
try.”
The wage earner in McClanahan worked within reser-
vation boundaries. The analysis of McClanahan shows
that the reservation context was significant not in and of
itself, but because reservation lands are “Indian country.”
After discussing Worcester v. Georgia, 31 U.S. (6 Pet.)
515 (1832), which held that states may not extend their
criminal laws to the tribal territory, the Court in
McClanahan stated:
Although Worcester on its facts dealt with a
State’s efforts to extend its criminal jurisdiction
to reservation lands,‘ the rationale of the case
plainly extended to state taxation within the
reservation as well.
411 U.S. at 169. In elaborating on the meaning of the term
“reservation lands,” footnote four cited to three cases: Wil-
liams v. United States, 327 U.S. 711 (1946); United States v.
Chavez, 290 U.S. 357 (1933); and United States v. Ramsey, 271
U.S. 467 (1926). Id. These three pre-1948 cases represent the
three types of “Indian country” codified in 18 U.S.C. § 1151:
reservations (Williams), dependent Indian communities
(Chavez) and trust or restricted allotments (Ramsey).
The Court’s discussion of P.L. 280 also reflects the
controlling effect of Indian country status. The
McClanahan Court noted that P.L. 280 “expressly provides
that the State must act ‘with the consent of the tribe
15
occupying the particular Indian country,’ 25 U.S.C.
§ 1322(a)’”” in order to assume civil and criminal jurisdic-
tion over Indians. 411 U.S. at 177 (emphasis added).
Footnote 17 then explains that P.L. 280 delegated to cer-
tain states “civil and criminal jurisdiction over Indian
reservations.” (Emphasis added.) The Court thus appears
to use the terms “Indian country” and “reservation”
interchangeably in McClanahan.
If there were any questions about the basis for the
Court’s holding in McClanahan, the Court soon provided
ample clarification. In DeCoteau v. District County Court, 420
U.S. 425 (1975), the Court faced questions of a state court’s
subject matter jurisdiction in consolidated civil and criminal
cases involving Indians. DeCoteau’s analysis was predicated
on the proposition that “[wJhile [18 U.S.C.] § 1151 is con-
cerned, on its face, only with criminal jurisdiction, the Court
has recognized that it generally applies as well to questions
of civil jurisdiction. McClanahan v. Arizona State Tax Comm'n.”
DeCoteau, 420 U.S. at 427 n.2. In the same footnote,
McClanahan is also cited as authority for the observation that
“[e]ven within ‘Indian country,’ a State may have jurisdiction
over some persons or types of conduct, but this jurisdiction
is quite limited.” Id.
Thus, the McClanahan analysis governs in cases
where Indians are employed in Indian country. Oklahoma
concedes here that the Sac and Fox lands are Indian
country and under Sac and Fox jurisdiction. Petitioner’s
Brief at 14. The inquiry must focus, therefore, on whether
Congress has expressly provided that Oklahoma’s tax
laws shall apply to the Sac and Fox. McClanahan, 411 U.S.
at 170-71; Bryan v. Itasca County, 426 U.S. 373, 376 (1976);
County of Yakima v. Yakima Indian Nation, 112 S. Ct. 683,
688 (1992). Congress must make its intent to allow such
16
state taxes “ ‘unmistakably clear.’ ” County of Yakima, 112
S. Ct. at 688, quoting Montana v. Blackfeet Tribe, 471 U.S.
759, 764-65 (1985) (referring to state taxation of Indians
“within their own territory”).
B. The 1891 Sac and Fox Allotment Agreement
Does Not Grant Oklahoma the Power to Tax the
Income of Tribal Members Employed in Indian
Country.
Oklahoma relies on the Sac and Fox Allotment Agree-
ment, Act of February 13, 1891, ch. 165, 26 Stat. 749, as the
sole source of congressional authority for its taxing
power over the Sac and Fox, and asserts that Oklahoma’s
income tax is “not pre-empted . . . because the Sac and
Fox Allotment Agreement does not preclude the exten-
sion of state law.” Petitioner’s Brief at 12. However, the
mere absence of a Congressional statement precluding
taxes hardly constitutes an unmistakably clear expression
by Congress that state taxes shall apply. Montana v. Black-
feet Tribe of Indians, 471 U.S. at 766-67; Bryan v. Itasca
County, 426 U.S. at 389. Cf. County of Yakima, 112 S. Ct. at
693-94 (statute authorizing “taxation of . . . land” does
not authorize taxation of the proceeds from sale of former
Indian trust land).
Oklahoma’s view of the effect of the application of
the Dawes Severalty Act to the Sac and Fox in 1891
conflicts directly with decisions of this Court and with
historical fact. See, e.g., DeCoteau, 420 U.S. at 446 (trust
allotments in disestablished reservation were meant to
“provide an adequate fulcrum for tribal affairs” and are
under “exclusive tribal and federal jurisdiction”); Moe v.
Confederated Salish and Kootenai Tribes, 425 U.S. 463, 478-79
(1976). Accord Ahboah v. Housing Auth. of Kiowa Tribe, 660
17
P.2d 625, 627-29 (Okla. 1983). The Oklahoma Organic Act
“expressly preserved tribal authority and federal Indian
jurisdiction” throughout all of Oklahoma. Felix S. Cohen's
Handbook of Federal Indian Law 773 (R. Strickland ed.
1982). “In passing the enabling act for the admission of
the state of Oklahoma, . . . Congress was careful to
preserve the authority over the Indians, their lands and
property, which it had prior to the passage of the act.”
Tiger v. Western Investment Co., 221 U.S. 286, 309 (1911).
“Since statehood [in 1907], the status of Indian tribes in
Oklahoma has been similar to that of tribes in other
states.” Felix S. Cohen's Handbook of Federal Indian Law 774
(R. Strickland ed. 1982).
Although the land base of the tribes in Okla-
homa has been reduced by the allotment pro-
cess, their inherent powers of self-government
over those areas that remain Indian country are
undiminished. Neither the General Allotment
Act nor most of the special allotment and ces-
sion agreements and statutes of individual
tribes limit powers of self-government.
Id. at 779-80.1°
As a substitute for an act of Congress authorizing
Oklahoma’s taxes on the Sac and Fox, Oklahoma urges
the Court to engage in a “particularized inquiry into the
nature of state, federal, and tribal interests at stake.”!!
However, this inquiry is appropriate only when states
seek to tax non-Indians doing business in Indian country.
White Mountain Apache Tribe v. Bracker, 448 U.S. 136,
10 This Court has recognized the 1982 Cohen treatise as a
“leading treatise” in Indian law. National Farmers Union Ins. Cos.
v. Crow Tribe, 471 U.S. 845, 855 n.17 (1985).
11 See Petitioner’s Brief at 7; Brief of Amici Curiae Arizona et
al., at 4; Brief of Amicus Curiae United States at 8.
18
144-45 (1980); McClanahan, 411 U.S. at 179; California v.
Cabazon Band of Mission Indians, 480 U.S. 202, 207 n.5 and
215 n.17 (1987) (In cases involving state taxation of tribal
members “[iJt is unnecessary to rebalance these interests
in every case.”).
C. The Same Considerations Which Confirmed the
Holding in McClanahan Apply to This Case.
1. THE TREATY
The Sac and Fox, like the Navajo, entered into treaties
with the United States. In the 1868 Treaty with the Sac
and Fox, the United States agreed to provide a “new
home” for the Tribes, on a tract of land of about 750
square miles. Delegations of the Tribes assisted in the
selection of the new Sac and Fox homeland. The reserva-
tion was set apart for them by the United States in the
Indian Territory, i.e., the area “set apart for the sole use
and occupation of various Indian tribes.” Atlantic and
Pacific R.R. v. Mingus, 165 U.S. 413, 435 (1897). See Peti-
tioner’s Brief at 8.
The 1868 treaty does not explicitly state that the Sac
and Fox were to be exempt from state taxes, but neither
did the Navajo treaty. McClanahan, 411 U.S. at 174. Given
the circumstances surrounding the execution of the Sac
and Fox Treaty, it should similarly be construed as pre-
cluding state taxation of Sac and Fox tribal members in
their own territory.
Plainly, the opening of the Sac and Fox reservation in
1891 has implications with respect to assertions of possi-
ble Sac and Fox sovereignty over non-members residing
in the reservation area. See Brendale v. Confederated Yakima
19
Indian Nation, 492 U.S. 408 (1989); Joseph L. Singer, Sover-
eignty and Property, 86 NW. U. L. Rev. 1 (1991). However,
this case concerns only the right of the Sac and Fox
people, who work on land held in trust for them by the
United States, to “make their own laws and be ruled by
them.” McClanahan, 411 U.S. at 172. Because the income
of the Sac and Fox tribal members is “derived wholly
from reservation sources,” their activities are “totaily
within the sphere which the relevant treaty and statutes
leave for the Federal Government and for the Indians
themselves.” McClanahan, 411 U.S. at 179-80. See County of
Yakima v. Yakima Indian Nation, 112 S. Ct. 683, 689 n.2
(1992). 12
12 Amici Curiae Arizona, et al., err in two respects when
they assert that an Indian must both work and live within a
reservation to qualify for the McClanahan exemption. First,
amici curiae miscite their principal authority, which deals with
application of state tax laws in Indian country, not just in “reser-
vations.” See Felix S. Cohen's Handbook of Federal Indian Law 406
(R. Strickland ed. 1982). Cf. Brief of Amici Curiae Arizona, et al.,
at 8 & n. 3. Second, amici curiae then apply the “usual rules” to
questions of taxation of Indians. Id. at 8-11. The “usual rules” do
not apply to such cases, however. See Montana v. Blackfeet Tribe of
Indians, 471 U.S. 759, 766 & n.4 (1985).
In cases involving the taxation of income earned by Indians,
only the location of the place of work matters. See California v.
Cabazon Band of Mission Indians, 480 U.S. 202, 215 n.17 (1987),
and Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148 (1973) (both
referring to the Indians’ exemption from state taxes on “income
from activities carried on within the boundaries of the reserva-
tion”). Cabazon shows that this exemption applies to income
earned in all of Indian country. 480 U.S. at 207 n.5.
20
2. THE ENABLING ACT
The Court in McClanahan also considered the provi-
sion of the Arizona Enabling Act which disclaimed “abso-
lute jurisdiction and control” over Indian lands.
McClanahan, 411 U.S. at 137. Oklahoma made equivalent
disclaimers. Tiger v. Western Investment Co., 221 U.S. 286,
309 (1911); Act of June 16, 1906, ch. 3335, 34 Stat. 267-68,
270, 272, 273.
3. PUBLIC LAW 280
The Court in McClanahan found that Arizona’s failure
to amend its constitution pursuant to P.L. 280 to allow its
courts to adjudicate civil and criminal matters arising in
Indian country “would seem to dispose of this case.”
McClanahan, 411 U.S. at 179. Likewise, Oklahoma chose
not to accept the burdens implicit in the acceptance of
such jurisdiction. Ross v. Neff, 905 F.2d 1349, 1352 (10th
Cir. 1990). Thus, like Arizona, Oklahoma has no authority
over Indians in Indian country in civil cases,!> criminal
cases,'* or regulatory matters.'®
13 E.g., Ahboah v. Housing Auth. of Kiowa Tribe, 660 P.2d 625
(Okla. 1983) (state courts not authorized to adjudicate forcible
entry and detainer action on trust allotment in disestablished
reservation); Housing Auth. of the Seminole Nation v. Harjo, 790
P.2d 1098 (Okla. 1990); Richardson v. Malone, 762 F. Supp. 1463
(N.D. Okla. 1991).
4 E.g., Cravatt v. State, 825 P.2d 277 (Okla. Crim. App.
1992); State v. Klindt, 782 P.2d 401 (Okla. Crim. App. 1989);
C.M.G. v. State, 594 P.2d 798 (Okla. Crim. App.), cert. denied, 444
U.S. 992 (1979).
15 Indian Country U.S.A., Inc. v. Oklahoma, 829 F.2d 967 (10th
Cir. 1987), cert. denied, 487 U.S. 1218 (1988). See letter (with
attached legal analysis) from Robert E. Layton, Jr., Regional
21
4. IMPLICATION OF NARROWER STAT-
UTES AUTHORIZING STATE TAXATION
OF INDIANS
Oklahoma’s position is further weakened by the
presence of “narrower statutes authorizing States to
assert tax jurisdiction over reservations, .. . explicable
only if Congress assumed that the States lacked the
power to impose the taxes without special authorization.”
McClanahan, 411 U.S. at 177. Some of these narrower
statutes address the taxability of Oklahoma Indians. See,
e.g., Choteau v. Burnet, 283 U.S. 691, 694-95 (1931).
5. THE BUCK ACT
The Buck Act authorized the application of state
taxes within “federal areas,” but continued the exemption
for “any Indian not otherwise taxed.” 4 U.S.C. § 109. This
exemption protects the Sac and Fox tribal members earn-
ing their income in the Sac and Fox Indian country, just as
it protected the wage earner in McClanahan, who worked
on a reservation. See McClanahan, 411 U.S. at 177-78.
Indians were not mentioned in the original Buck Act
bill, H.R. 6687. 84 Cong. Rec. 10,094 (1939). The Depart-
ment of the Interior then sought to exclude
Administrator for the United States Environmental Protection
Agency, to Mark S. Coleman, Deputy Commissioner for Okla-
homa’s Environmental Health Services (Sept. 8, 1991), inform-
ing Oklahoma of its lack of authority to regulate environmental
activties in “Indian country” in Oklahoma; Washington v. United
States Envtl. Protection Agency, 752 F.2d 1465, 1467 n.1 (9th Cir.
1985).
22
“Indian reservations” from the coverage of the bill,'’© and
Senator LaFollette proposed an amendment to exempt
from the bill “any transaction occurring in whole or in
part within an Indian reservation.” 84 Cong. Rec. 10,907
(1939).
In hearings on H.R. 6687 in 1940, New Mexico objec-
ted to Senator LaFollette’s proposed amendment. Hear-
ings Before a Subcommittee of the Senate Committee on
Finance on H.R. 6687 (hereinafter “ Hearings”), 76th Cong.,
3d Sess. 2 (1940). New Mexico Representative Dempsey,
on behalf of the New Mexico Governor, acknowledged
that Indians were already “exempt from taxation” and
emphasized that New Mexico had “no objection what-
soever to prohibiting the sales tax applying to Indians.”
Id. at 19. He explained that New Mexico feared that
exempting the reservations themselves would create tax
havens for non-Indians who would move their stores to
Indian lands. Id. He equated “reservations” and “Indian
lands” with lands purchased by the federal government
for the Indians and other non-taxable land in McKinley
County, where, as Representative Dempsey noted, “there
are scarcely any lands . . . except for the city of Gallup,
that are not Indian lands.” Id. Much of the Indian land to
which Dempsey referred is off-reservation trust allot-
ments. S. Rep. No. 436, 74th Cong., Ist Sess. 3 (1935).
The Interior Department reiterated its position that
transactions on Indian reservations be exempted from the
bill. Hearings at 38-40. Senator George suggested that the
Interior officials confer with the State authorities to arrive
at acceptable language. Id. at 40.
© Letter from Acting Secretary of the Interior to Hon. Pat
Harrison (Aug. 1, 1939), reprinted in 84 Cong. Rec. 10,685 (1939).
23
The Committee ultimately reported out the bill with
language consistent with New Mexico’s position, that
“any tax on or from any Indian not otherwise taxed”
would continue to be preempted. S. Rep. No. 1625, 76th
Cong., 3d Sess. 4 (1940).!17 The Committee amendment
was enacted into law verbatim and is codified at 4 U.S.C.
§ 109.
Two things are significant in this legislative history.
First, Representative Dempsey’s explanation of the situa-
tion in McKinley County shows that the exemption from
state taxes was understood to apply to off-reservation
Indian country. Second, Congress rejected the view that
the tax exemption should be confined by formal reserva-
tion boundaries and confirmed the long established fed-
eral policy of excepting Indians from state taxation.
This is the only pertinent legislative history on 4 U.S.C.
§ 109. Its clear thrust is to affirm that Indians on Indian
land are exempt from state taxes. A construction of the
Buck Act excepting Indians from state taxes on wages
earned within all of Indian country is consistent with the
language of the statute, all of the pertinent legislative
history, and the traditional canons of construction of stat-
utes intended to benefit Indians. See Montana v. Blackfeet
Tribe of Indians, 47. U.S. 759, 766 (1985).
17 “Indians not taxed” means “those who [hold] tribal rela-
tions.” Elk v. Wilkins, 112 U.S. 94, 112 (1884) (Harlan, J., dissent-
ing). Cf. id. at 108 (majority opinion distinguishing for
citizenship purposes “Indians not taxed” from those who “have
totally extinguished their national fire,” have “lost the power of
self-government,” and who were “never recognized by the
treaties or legislative or executive Acts of the United States as
distinct political communities”).
24
D. Oklahoma’s Terminationist Arguments Impli-
cate Issues Within the Exclusive Authority of
Congress.
“For most current purposes, judicial deference to
findings of tribal existence is still mandated by the exten-
sive nature of congressional power” in Indian affairs.
Felix S. Cohen's Handbook of Federal Indian Law 3 (R. Strick-
land ed. 1982); United States v. Rickert, 188 U.S. 432, 445
(1903) (“It is for the legislative branch of the government
to say when these Indians will cease to be dependent
.... That is a political question, which the courts may not
determine.”); United States v. Holliday, 70 U.S. (3 Wall.)
407, 419 (1866). This Court has consistently held that
Indian status is not a racial category, but a political one.
Morton v. Mancari, 417 U.S. 535, 553-54 (1974). Oklahoma
fails to respect this constitutional principle when it
argues that “assimilated” Indians are not entitled to the
protections of federal law even though they are members
of a federally recognized tribe.
When Congress has determined that the level of
acculturation of an Indian is relevant to his political
status, it has established commissions in the Executive
Branch to make these determinations. Indeed, the cases
on which Oklahoma relies deal with Indians who
received “Certificates of Competency” pursuant to such
Congressional authority. E.g., Choteau v. Burnet, 283 U.S.
690 (1931); Leahy v. State Treasurer of Oklahoma, 297 U.S.
420 (1936).'® See Elk v. Wilkins, 112 U.S. 94, 103-06 (1884).
Because of Congress’ traditional role in this essentially
18 Oklahoma Tax Comm'n v. United States, 319 U.S. 598 (1943),
allowed state taxation only of cash, securities, and personal
property solely for estate tax purposes.
25
political function, the Court should approach most cau-
tiously a request to rule on the political status of Indians.
If this Court were to accept Oklahoma’s argument,
courts will be required to define what it is to be an Indian
in a wholly new manner. Oklahoma argues that Indians
there are generally assimilated enough to warrant
removal of traditional tax exemptions.'? McClanahan fore-
closes such a contention. The Sac and Fox are plainly not
“Indians who have left or never inhabited reservations set
aside for their exclusive use or who do not possess the
usual accoutrements of tribal self-government.”
McClanahan, 411 U.S. at 167 (emphasis added). Like the
Shawnees in The Kansas Indians, the Sac and Fox govern-
ment, by virtue of the Oklahoma Indian Welfare Act, is
“preserved intact, and recognized by the political depart-
ment of the government.” Id. at 169. See Tenneco Oil Co. v.
Sac and Fox Tribe, 725 F.2d 572, 577 (10th Cir. 1984) (“[T]he
Sac and Fox Tribe is possessed of substantial sovereign
authority and rights of self-government.”) (McKay, J.,
concurring); Muscogee (Creek) Nation v. Hodel, 851 F.2d
1439 (D.C. Cir. 1988), cert. denied, 488 U.S. 1010 (1989).
Nor have the Sac and Fox “left the reservation and
become assimilated into the general community,” a situa-
tion where the Indian sovereignty doctrine has been less
19 Petitioner’s Brief at 13. We do not believe that tribal
sovereignty is dependent on an uneducated, impoverished
membership. However, even accepting Oklahoma’s anachronis-
tic notions of assimiliation, we note that as of 1974 the average
grade level achieved by the Sac and Fox was 6th grade, while
the Navajo — which Oklahoma characterizes as “unassimilated”
— had an average eighth grade education. Federal and State Indian
Reservations and Trust Areas, supra n.2, at 85 and 473. The educa-
tional level of the Sac and Fox stands in sharp contrast to
Oklahoma’s assertion that the Sac and Fox have “little to distin-
guish them from all other citizens.” Petitioner's Brief at 13.
26
“rigidly applied.” McClanahan, 411 U.S. at 171. This case
concerns income earned by tribal members working in
the Sac and Fox tribal territory, within the area reserved
for them by the 1868 Treaty. Any voluntary conferral by
Oklahoma of rights, privileges and services to individual
Sac and Fox members is irrelevant under McClanahan. Id.
at 172-73 & n.12. Accord Moe v. Confederated Salish and
‘Kootenai Tribes, 425 U.S. 463, 476 (1976).
Oklahoma and its amici would disregard McClanahan
and subject the courts to endless hearings on whether the
Indians function as a “reservation community,”?° and on
whether any putative Indian taxpayer is sufficiently edu-
cated and assimilated that she might be stripped of her
status as a “true” Indian.?' This position is wholly incom-
patible with United States v. John, 437 U.S. 634, 652-53
(1978). Oklahoma not only would impose an intolerable
burden on the courts, it would also defeat the federal
policies supporting triba! self-determination. Even in
ambiguous instances, the “courts ‘are not obliged . . . to
strain to implement [an assimilationist] policy Congress
has now rejected, particularly where to do so will inter-
fere with the present congressional approach to what is,
after all, an ongoing relationship.” Bryan v. Itasca
County, 426 U.S. 373, 388 n.14 (1976), quoting Santa Rosa
20 See Brief of Amicus Curiae United States at 7, 8, 18, 19, 20,
23 & n.20, 24. The United States repeatedly employs, but never
defines, the phrases “reservation community” and “coherent
reservation community” and the phrases have no basis in prior
decisions of this Court. For one to determine that an Indian is a
part of a “reservation community,” the following facts are suffi-
cient: (1) the United States recognizes the government of the
Tribe and (2) the Indian is an enrolled member of that Tribe. The
geographical component of a “reservation community” is
“Indian country” as defined in 18 U.S.C. § 1151.
21 See Petitioner's Brief at 13-15; Brief of Amici Curiae Ari-
zona et al., at 11 n.6; Brief of Amicus Curiae United States at 20.
27
Band of Indians v. Kings County, 532 F.2d 655, 663 (9th Cir.
1975), cert. denied, 429 U.S. 1038 (1977).?2
Ifl. OKLAHOMA’S ATTEMPT TO CIRCUMVENT
MOE SHOULD BE REJECTED.
A. Oklahoma’s Vehicle Excise Tax May Not Be
Imposed on Vehicle Transfers Occurring Within
Indian Country.
A determinative factor in assessing the validity of Okla-
homa’s Vehicle Excise Tax on Indian vehicles is the situs of
the transaction being taxed. See Washington v. Confederated
Tribes of the Colville Reservation, 447 U.S. 134, 163 (1980). If the
transaction takes place within the tribal territory the state is
without taxing jurisdiction absent congressional authoriza-
tion. Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148 (1973),
citing McClanahan. As discussed above, this Court’s analysis
in McClanahan applies throughout Indian country.
Petitioner’s Vehicle Excise Tax ignores the situs of the
transaction. This Court has recognized that Congress has
addressed the business of Indian commerce on reserva-
tions so comprehensively “that no room exists for state
laws imposing additional burdens upon traders.” Central
Machinery v. Arizona Tax Comm'n, 448 U.S. 160, 164 (1980),
citing Warren Trading Post Co. v. Arizona Tax Comm'n, 380
U.S. 685 (1965). Oklahoma’s Vehicle Excise Tax is one
22 See United States v. Washington, 641 F.2d 1368, 1373 (9th
Cir. 1981) (“Federal policy has sometimes favored tribal auton-
omy and sometimes sought to destroy it... . A degree of
assimilation is inevitable under these circumstances and does
not entail the abandonment of distinct Indian communities.”),
cert. denied, 454 U.S. 1143 (1982).
28
such state law for which no room exists when the transfer
of legal ownership occurs in Indian country.
B. Oklahoma’s Vehicle and License Registration
Fee Is an Unlawful Tax on Property Within
Indian Country.
The annual registration fee imposed under the Okla-
homa Vehicle License and Registration Act is a tax on the
value of property held within Indian country and cannot
be reconciled with established case law.?%
Oklahoma is attempting to impose what it refers to as
a “fee” of 1'/4% of the vehicle’s factory delivered price for
the first year. Petitioner’s Brief at 18. This fee is reduced
to ninety percent of the previous year’s fee in the follow-
ing years. Under the guise of a registration fee, Oklahoma
effectively imposes a property tax based on value. While
Oklahoma chooses to call its property tax a license and
registration fee, the nature of the tax must be determined
by its operation rather than particular descriptive lan-
guage which may have been applied to it. Educational
Films Corp. v. Ward, 282 U.S. 379, 387 (1931).
This Court has refused to allow states to impose taxes
on motor vehicles owned by tribal members living on
trust lands, regardless of the designation of the tax. In
Washington v. Confederated Tribes of the Colville Reservation,
447 U.S. 134 (1980), Washington attempted to impose
taxes which were denorninated as excise taxes for the
privilege of using a vehicle in the state. Each tax was
23 For an early case, see, United States v. Rickert, 188 U.S. 432
(1903) (invalidating state taxes on, inter alia, horses stabled on
trust allotments).
29
assessed annually at a certain percentage of fair market
value and imposed on the owners of motor vehicles,
including vehicles owned by the Tribe and its members
for uses both on and off the reservation. Colville, 447 U.S.
at 162. The Court previously invalidated Montana’s per-
sonal property tax as applied to motor vehicles owned by
tribal members residing on their reservation, relying on
McClanahan’s holding that such taxation is “ ‘not permis-
sible absent congressional consent.’” Moe v. Salish &
Kootenai Tribes, 425 U.S. 463, 475-76 (1976). Washington’s
attempt to avoid Moe by characterizing its tax as an excise
tax rather than as a property tax was rejected by this
Court. Washington v. Confederated Tribes of the Colville Res-
ervation, 447 U.S. 134, 163.
In this instance, Oklahoma’s Vehicle and License Reg-
istration Fee is a property tax imposed on vehicles owned
by Sac and Fox tribal members and garaged in Sac and
Fox Indian country. In the absence of Congressional con-
sent, Oklahoma may not impose a property tax and call it
a fee and accomplish what Colville and Moe have prohib-
ited. Colville, 447 U.S. at 163; Moe, 425 U.S. at 480-81.
e
30
CONCLUSION
If lands are validly set apart for the use of the Indians
as such, they qualify as a reservation for tribal immunity
purposes. Oklahoma Tax Comm’‘n v. Citizen Band
Potawatomi Indian Tribe, 111 S. Ct. 905, 910 (1991). The Sac
and Fox allotments have been validly set aside, as has the
tribal trust land. See United States v. Pelican, 232 U.S. 442
(1914); Citizen Band Potawatomi, supra. The lands at issue
here constitute the Sac and Fox Indian country.
State taxation of the income and property of Indians
in their Indian country is unlawful absent an act of Con-
gress expressly authorizing such taxation. No such stat-
ute exists here. The decision of the Court of Appeals
should therefore be affirmed.
Respectfully submitted,
Navajo NaTION NorpHaus, HALTOM, TAYLOR,
DEPARTMENT OF JUSTICE TARADASH & Frve
Hers YAZZIE Paut E. Frye
Attorney General Wayne H. BLaDH
MARCELINO R. Gomez Lisa M. ENFIELD
STANLEY M. PoLLack Of Counsel
Post Office Drawer 2010 500 Marquette Avenue NW
Window Rock, Navajo Suite 1050
Nation (AZ) 86515 Albuquerque, NM 87102
(602) 871-6343 (505) 243-4275
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