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U.S. Supreme Court

Washington v. Confederated Tribes, 447 U.S. 134 (1980)

Washington v. Confederated Tribes of the

Colville Indian Reservation

No. 78-630

Argued October 9, 1979

Decided June 10, 1980*

447 U.S. 134


These cases concern challenges of several Indian Tribes to efforts by the State of Washington to apply various state taxes and other laws to transactions and activities occurring on Indian reservations. Washington imposes a cigarette excise tax on the "sale, use, consumption, handling, possession or distribution" of cigarettes within the State. It also imposes a general retail sales tax on sales of personal property, including cigarettes. The State sought to compel Indian retailers to collect both taxes with respect to sales of cigarettes to non-Indians, and the latter tax with respect to sales of other goods as well. In addition, the State sought to apply its motor vehicle excise tax and mobile home, camper, and trailer taxes -- which are imposed for the privilege of using the covered vehicles in the State -- to vehicles owned by the Tribes or their members and used both on and off the reservation. Finally, the State took steps to assume civil and criminal jurisdiction over the affected reservations. The Indian Tribes involved in this litigation have each adopted ordinances imposing their own taxes upon on-reservation sales of cigarettes. In actions brought in Federal District Court, they sought declaratory and injunctive relief against enforcement of the state sales and cigarette taxes, and in particular against the State's seizure of untaxed cigarettes destined for delivery to the reservations, contending that those taxes could not lawfully be applied to tribal cigarette sales. In addition, the Tribes challenged the State's efforts to apply its vehicle excise taxes to Indian-owned vehicles, and asserted that the State's assumption of jurisdiction was invalid. The complaints alleged, inter alia, that the challenged taxes were contrary to the Indian Commerce Clause. Because injunctive relief against enforcement of state statutes was sought, a three-judge District Court was convened pursuant to the then applicable requirement of 28 U.S.C. § 2281 (1970 ed.) that an injunction restraining the enforcement of any state statute shall not be granted

Page 447 U. S. 135

by any district court upon the ground of the statute's unconstitutionality unless the application therefor is heard and determined by a three-judge court. After a consolidated proceeding, the District Court held that (1) it had jurisdiction as a three-judge court; (2) the cigarette tax could not be applied to on-reservation transactions because it was preempted by the tribal taxing ordinance and constituted an impermissible interference with tribal self-government; (3) the retail sales tax could not be applied to tribal cigarette sales; (4) the State could not impose certain recordkeeping requirements on the Tribes in connection with various tax-exempt sales; (5) the vehicle excise taxes could not be imposed on vehicles owned by the Tribes and their members; and (6) the State's assumption of civil and criminal jurisdiction over certain of the Tribes was unconstitutional. The court enjoined enforcement of the statutes it had invalidated, and the State moved unsuccessfully for a new trial.


1. The Tribes' Commerce Clause claims are not "insubstantial," and are not rendered inescapably frivolous by the decisions in Mescalero Apache Tribe v. Jones, 411 U. S. 145, and McClanahan v. Arizona State Tax Comm'n, 411 U. S. 164, so as to defeat application of § 2281. In addition, the Tribes' attack on the official seizure of cigarettes bound for the reservations also triggers the three-judge requirement of § 2281. Accordingly, this Court has jurisdiction over the appeals under 28 U.S.C. § 1253, which authorizes a direct appeal to this Court from an order granting an injunction in a suit "required by any Act of Congress to be heard and determined by a district court of three judges." Pp. 447 U. S. 145-149.

2. The State's motion for a new trial on issues other than the motor vehicle tax and assumption of jurisdiction issues rendered nonfinal the disposition of all issues between the parties, and thus the State's appeal from the District Court's resolution of those two issues was timely under 28 U.S.C. § 2101(b), where it was filed within 60 days of the denial of the motion for a partial new trial but more than 60 days after the District Court's decision on those two issues. Accordingly, the appeal from such decision is properly before this Court. Pp. 447 U. S. 149-150.

3. The imposition of Washington's cigarette and sales taxes on on-reservation purchases by nonmembers of the Tribes is valid. Pp. 447 U. S. 150-162.

(a) The Tribes have the power to impose their cigarette taxes on nontribal purchases, since the power to tax transactions occurring on trust lands and significantly involving a tribe or its members is a fundamental attribute of sovereignty which the tribes retain unless divested

Page 447 U. S. 136

of it by federal law or necessary implication of their dependent status. Here, there is no federal statute showing any congressional departure from the view that tribes have such power, and tribal powers are not implicitly divested by virtue of the tribes' dependent status. Pp. 447 U. S. 152-154.

(b) But the Tribes' involvement in the operation and taxation of cigarette marketing on the reservation does not oust the State from any power to exact its sales and cigarette taxes from nonmembers purchasing cigarettes at tribal smokeshops. Principles of federal Indian law, whether stated in terms of preemption, tribal self-government, or otherwise, do not authorize Indian tribes to market an exemption from state taxation to persons who would normally do their business elsewhere. Federal statutes, such as the Indian Reorganization Act of 1934, the Indian Financing Act of 1974, and the Indian Self-Determination and Education Assistance Act of 1975, while evidencing a congressional concern with fostering tribal self-government and economic development, do not go so far as to grant tribal enterprises selling goods to nonmembers an artificial competitive advantage over all other businesses in a State. Washington does not infringe the right of reservation Indians to make their own laws and be ruled by them merely because the result of imposing taxes will be to deprive the Tribes of revenues which they currently are receiving. Pp. 447 U. S. 154-157.

(c) The Indian Commerce Clause does not, of its own force, automatically bar all state taxation of matters significantly touching the political and economic interests of the Tribes. That Clause may have a more limited role to play in preventing undue discrimination against, or burdens on, Indian commerce, but Washington's taxes are applied in a nondiscriminatory manner to all transactions within the State, and do not burden commerce that would exist on the reservations without respect to the tax exemption. Although the result of these taxes will be to lessen or eliminate tribal commerce with nonmembers, that market existed in the first place only because of a claimed exemption for these very taxes. Such taxes do not burden commerce that would exist on the reservations without respect to the tax exemption. P. 447 U. S. 157.

(d) The Tribes failed to show that business at the smokeshops would be significantly reduced by a state tax without a credit as compared to a state tax with a credit. Pp. 447 U. S. 157-158.

(e) There is no direct conflict between the state taxes and the Tribes' cigarette ordinances so as to warrant invalidation of the state taxes on grounds of preemption or violation of the principle of tribal self-government. Pp. 447 U. S. 158-159.

(f) The State may validly require, as a minimal burden, the tribal smokeshops to affix tax stamps purchased from the State to individual

Page 447 U. S. 137

packages of cigarettes prior to the time of sale to nonmembers of the Tribe. Cf. Moe v. Salish & Kootenai Tribes, 425 U. S. 463. P. 447 U. S. 159.

(g) The State's recordkeeping requirements are valid in toto. The Tribes failed to demonstrate that such requirements for exempt sales are not reasonably necessary as a means of preventing fraudulent transactions. Pp. 447 U. S. 159-160.

(h) The State's interest in taxing nontribal purchasers outweighs any tribal interest that may exist in preventing the State from imposing its taxes. Pp. 447 U. S. 160-161.

(i) The State's interest in enforcing its taxes is sufficient to justify its seizure of unstamped cigarettes as contraband if the Tribes do not cooperate in collecting the taxes. Pp. 447 U. S. 161-162.

4. The motor vehicle and mobile home, camper, and trailer taxes cannot properly be imposed upon vehicles owned by the Tribes or their members and used both on and off the reservations. Moe, supra. Pp. 447 U. S. 162-164.

5. The District Court erred in holding that the State's assumption of civil and criminal jurisdiction over the Makah and Lummi Reservations was unlawful. Washington v. Yakima Indian Nation, 439 U. S. 463, controlling. P. 447 U. S. 164.

446 F. Supp. 1339, affirmed in part and reversed in part.

WHITE, J., delivered the opinion of the Court, in which BURGER, C. J., and BLACKMUN, POWELL, and STEVENS JJ., joined; in Parts I, II, III, IV�B(1), IV�D, V, and VI of which BRENNAN and MARSHALL, JJ., joined; in Parts I, II, III, IV (except IV-B(2)), and VI of which STEWART, J., joined; and in Parts I, II, III, IV-C, IV-E, and VI of which REHNQUIST, J., joined. BRENNAN, J., filed an opinion concurring in part and dissenting in part, in which MARSHALL, J., joined, post, p. 447 U. S. 164. STEWART, J., filed an opinion concurring in part and dissenting in part, post, p. 447 U. S. 174. REHNQUIST, J., filed an opinion concurring in part, concurring in the result in part, and dissenting in part, post, p. 447 U. S. 176.

Page 447 U. S. 138

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