SQUIRE V. CAPOEMAN, 351 U. S. 1 (1956)

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U.S. Supreme Court

Squire v. Capoeman, 351 U.S. 1 (1956)

Squire v. Capoeman

No. 134

Argued January 19, 1956

Decided April 23, 1956

351 U.S. 1


Income from the sale by the Government of standing timber on allotted forest land on the Quinaielt Indian Reservation held in trust by the Government for a noncompetent Quinaielt Indian may not be subjected to a capital gains tax consistently with applicable treaty and statutory provisions and the Government's role as trustee and guardian for such Indian. Pp. 351 U. S. 2-10.

(a) Though Indians are citizens, and are subject to income taxes, it cannot be said that, in the circumstances of this case, the taxability of this Indian is unaffected by the treaty with the Quinaielt Indians, the General Allotment Act, or the trust patent under which this land is held in trust for the Indian. Pp. 351 U. S. 6.

(b) The provision of § 5 of the General Allotment Act of 1887 that lands on Indian reservations allotted to individual Indians and held in trust for them by the Government shall ultimately be conveyed to them in fee simple discharged of the trust and "free of all charge or incumbrance whatsoever" might well be construed as exempting such lands from taxation. Pp. 351 U. S. 6-7.

(c) The provision of § 6 of the General Allotment Act, as amended, that, when a patent in fee simple has been issued to an Indian allottee, "all restrictions as to . . . taxation of said land shall be removed" implies that, until such time as the patent is issued, the allotment shall be free from all taxes. Pp. 351 U. S. 7-9.

Page 351 U. S. 2

(d) Superintendent of Five Civilized Tribes v. Commissioner, 295 U. S. 418, distinguished. P. 351 U. S. 9.

(e) Since the purpose of the General Allotment Act is to enable Indian allottees to attain a state of competency and independence, and since that purpose would be defeated by imposition of the tax here proposed, it is unreasonable to infer that, in enacting the income tax law, Congress intended to destroy the tax exemption afforded by the General Allotment Act. P. 351 U. S. 10.

220 F.2d 349 affirmed.

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