tax with respect to the sale by license distributors of fuel to tribally own retail stations on three indian reservations in our state there are three distributors involved all of which again are licensed to distribute gas tax commission let me let me ask you a question or two i was kind interested in that statutory phrase license traders i know it mostly comes up in connection with their briefs that it mostly comes up in connection with creators on indian license for except on an indian reservation on military bases i'm not aware that you need a license and i think you just if you want to open a store it's p f s and they open it up for bids that but i'm not sure reservation as we point out in the brief at the time of the statute snap and in one hundred thirty six of the only case law and i think there were fourteen or fifteen such cases the only case law which used both terms in the same case involved indian reservations so certainly its most common use is in connection with with indian reservations is there any use in the us code of the term license else i was thinking  i wonder if even if you prevail generally as to the distributors whether india and tribal purchasers would be entitled to individual tax exemptions by showing id and filing a form or giving a form to the distributor showing that the purchases for the units your honor the idaho tax  paid back to the retailer people i mean everything looks like a pass through just in terms of how the statute operates so what am i and you know what am i missing that's what bothers me about about the case  in favor of the tax it seems like the way the tax operates that's that the weight of the tax the burden of it is on the retail level which is on the on the native american right there's a long history in this country that states can't on the distributor with respect to receipt of fuel but it also modified in section two section sixty three dash twenty four to one which now it in in the statute prior to its two thousand and two amendments with respect to exactly what the taxable of them was so for example in that case the  retailer doesn't pay for it and that is correct under under also require the distributor to give the money back to the retailers if they paid the tax but then they get something that passed off now i think we have to distinguish carefully in terms of your question between who bears the legal incidence of the tax which is in large measure in fact and we me see if i can come out from a slightly different way it seems to me that what you're saying is that we can't look at what this statute has done here but somehow that's irrelevant that once the idaho legislature declares that the legal incidence of this tax falls on the distributor we must accept that without regard to how the tax is actually collected and i'm bothered  by i think the same thing that's bothering my brother why can't we look to how the tax is administered in finding that regardless of what the legislature sad that's not what's going on at the practical a sack of how the tax is that minister does it your honor i would suggest that in this situation when you speak of the practical effect what you're talking about is the economic incidence of the tax and let us just look at a euphemism for who pays that is it it is a term of art for who end bearing economic burden of the tax i can't figure out how you can stray from a statute who bears the economic burden my thought is that it would always be an empirical question because it's always subject to market forces of supply and demand for example real estate taxes the landlord tries to shift them to the tenant in the ranch but if there are a whole lot of vacancies then rents get forced down to where the can't landlords have to eat the taxes and they can't shift into the town it seems like any taxes like that it was depends on who has the power in the economic relationship and that varies from time to time so i wonder if we just need to look at the the law to see who the law imposes the tax on in terms of penalties for not paying it measurement of the amount of tax well your the commission the amount of the tax if we ask you about another part of the wording it looks to me and i'm not sure i'm working right is the way they measure this tax is by the fuel the distributor receives rather than the fuel that distributes sells is that the way the statute is structured that's correct or are the does that mean if if the distributor receives one hundred thousand gallons in may and the distributor so it's fifty thousand gallons to the filling stations on the indian reservation the distributor owes that tax on one hundred thousand gallons not on fifty thousand this reader has the tax and one hundred thousand gallons but the distributor may claim a deduction for the fifty thousand the fifty thousand gallons that are not sold a even the the answer is they would be that the answer is no because they would only because fifty thousand gallons was sold if we assume that the the that amount was i mean the distributor owns the tax on the whole amount that gets credit for what the distributor does so that's correct so the tax is nominally on what the distributor receives but in substance on what he sells that's correct well in the issue was whether or not up to a particular particular state tax was born for example by federal contractor as opposed to the united states itself as the doctrine has evolved and  between which of these economic actors that may be involved in a particular transaction in the state legislature has determined should bear the legal incident recognizing that the burden the economic burden of this tax as a matter of commercial practice will be passed on because if we were to look at the are you dealing with cases where the state tax the contractor in some way and the question was if it was in essence a tax on the united states senate then the contractor didn't have to pay that's correct  no state legislative term a determination about who was to bear the legal incidents perhaps because when these cases first developed the distinction between legal and economic incentives itself had not developed and then through it recognizes because the legislature deals in something approaching the real commercial world that as a matter of commercial practice fuel taxes in particular are passed through as an economic  but with the particular nature of fuel taxes they are in fact passed through economic incidence can be terribly complicated in another context and there's a recent let me revert to my days as a white collar lawyer and follow the money let's go back to the hundred thousand fifty thousand hypothetical you're saying the legislature has declared that the distributor  the tax when he received two hundred thousand gallons of gasoline he then sells fifty thousand gallons of gasoline to an indian retailer who in turn sells all fifty thousand gallons to people  gas from him on the rez or ation tell me how the money flows back to the idaho commission in order to meet the tax obligation that the distributor has the legal incidence of very well the of the fuel what all the fuel that was received that's correct in terms of the cash flow it is it's difficult to know because it depends on the timing of the sale but the distributor will be required to take so ultimately  adoption is that out of the distributor collects from that hundred thousand is up to whatever contractual relationship he negotiates with the retailer and how the retailer collects the money to give to the distributor is up to whatever the retailer decides to sell the gasoline for on the reservation that it well in theory that's correct yes so at some point the money flows back to the distributor from it looks to me like if it's not worth less account it's a gas station the generally has been paying its bills and they have been written off on the on the distributors income tax return then if distributor receives one hundred thousand gallons and he sells fifty thousand gallons to filling stations on the verge of rishon he does not get a deduction for the fifty thousand that he didn't sell the those those that feel was returned why i was the only fuel distributor that i know personally has a little tank farm so i i don't know if he ever returns fuel or if you just want to  it was the basis for your statement that he gets a deduction for the fifty thousand that he doesn't sell some other portion of the statute or was it just the factual assumption that he must return to the refinery whatever  passthrough it really does get a bunch of gasoline and sell like the furniture store has inventory and i and i wonder if if we assume that hypothetically that the distributor has a tank farm and he has inventory then in my hypo where the distributor receives a hundred thousand gallons of gas and he sells fifty thousand gallons of gasoline that month off of filling stations on the reservation does he pay taxes on one hundred thousand that he received or the fifty thousand  i think would be more preparation for me to the shores of st so you really don't know the answer to that right now that's correct is there any place to look other than twenty four seven the the answer is yes that is the the regulations and that's what i'm  glancing at but  it looks like twenty four of seven and you're examining the pages numbered seven at the bottom and looking at the right one right this is this is i'm sorry the agenda that is part of our athletes brief followed right after the the argument got it thanks sixty three that's twenty four zero seven provides that there isn't the doctrine for motor fuel that is return here it is twenty four one is the definition that's really what i was focusing on and i appreciate your help on this my thinking was i'm trying to figure out who's taxed and i was using my hype over the distributor receives one hundred thousand gallons and he still is fifty thousand gallons at to the filling stations on the indian reservation and the other fifty he accumulates in his tank farm the distributors tank farm and i was thinking it looks like he pays taxes on one hundred thousand gallons so really is a tax on the distributor not on the filling station on the indian reservation but you may be and that the tax was imposed on the receipt of motor fuel at the time that goodman oil was decided just as it is today so this wasn't a change and the motor fuel tax actions but i do want to point out that in terms of receipt and counsel for the state acknowledge this receipt in practical terms rather means the sale of fuel why and they put the fuel into his tank farm well if they do that under the idaho statute it's not taxable and the idaho statute the fines receipt and the that's why in the courting goodman held that the legal incidence was on the retailer and the provisions that the court in goodman relied on were not affected at all by the two thousand and two amendments and if i fuel to the retailer the invoice for the sale my show that the tax was charged to the retailer and it provides three means by which this can be shown the language of this regulation reflects what the statute requires and the court in goodman and the district court here particularly focused on if i could refer you to the a dent on page forty seven the state and provides a tax credit to the distributor for doing stuff the same conclusion your honor is reflected in section twenty four thirty five of  collecting the task it's the retailer that's paying it it's the retailers funds that are held in trust for payment to the state and the statute says i'm not to be considered part of the money that the distributor has  trust yes it's the money though that the distributor receives from the retailer and the statue director that a portion of that most of the distributor never gets title to the states share i've been puzzling over you were saying that says that twenty four zero three one two speak to the incidence of the tax by saying that the distributor doesn't receive the fuel purposes of being taxed on receipt until the distributor sells it to the filling station on the reservation if i understood you correctly that but i'm reading those sections and i don't read them that way it looks to me like subsection two says that there's no receipt when it shipped from one refinery or pipeline terminal to another refinery or pipeline terminal now those are not distributors thank farms a refinery is where they refine the fuel not where the distributor has it and the tank  distributors terminal they don't distribute there at the gas stations and then want to add a as fuel to produce re manufacture and so forth are stored at a high point terminal is received when it's loaded onto tank trucks at and i'm thinking that means as soon as the pipeline thermal loath it into a tank truck for delivery to danny distributor any distributor owes tax on even though he hasn't sold well you know we may not sell it till next year the tax incidence may fall in a different year often very important people let me say that what i was trying to respond to where your questions i am to see your honor let me turn to the legal incidents rules because these that legal incidence is not determined by who pays the tax first and let me describe illegal as are its rules and how they're intended to function neagle instance is a task that was  it sales federal agencies i would suppose it would spill over gross receipts tax but if it's the sales tax and the ordinance at the taxes on the buyer but the seller must collect it then probably the federal agencies are entitled to an exemption yes and the rule of law from the united states versus state tax commission is that as a matter of law if that the taf statute provide and that's the rule can that be filled though if the wholesaler the distributor has to pay the tax in may even if he doesn't sell the fuel first the question is is there a pass through provision in the tax that requires the retailer the purchaser to pay the tax and that rules that are express state tax commission is the same rule that the supreme court applies in the indian context in chickasaw and the same rule applied in roll that is if the retailer has to pass the tax  the consumer then even though the retailer is making an advance payment of the tax as was the case in mall the legal incidence of the tax is on the party that the tax is passed through to now that the and the supreme court has said that can't be done it was these rules that were applied by the district court and as a district court noted the goodman ruling set out the provisions that idaho found dispositive of legal and since the idaho supreme court and the legislation chose not to change any of them the decision the superficial changes intent relied on by the state is we intend to change the legal incidents but that statement was preceded by the legislature statement that we're doing nest so that we can collect taxes and idaho's indian reservation well the district adversary that let's assume that this is a tax imposed on fuel full of on indian reservations for purposes of the question and i'm wondering why there isn't i can't remember if you use the word abrogation in this context and in the in the statute because any possible ambiguity in the phrase or other reservations is license trader except for these persons with licenses to trade with indians is there any license trader that exists in federal law other than in the intruders well this was addressed by by the corning goodman and goodman pointed to the reeves decision which identifies retailers generally required to have a license person selling malt beverages required to have a license those are state licenses those aren't federal well there's no federal filling station license of course ran around and quite the the statute does is it provides i'm getting at is when congress uses the word license traitor oh i see you're saying when congress used the word license traitor might i'm in a under the federal statute the term is indian traitor it's not it's not licensed trainer and in the federal indian trader statutes they make specific reference rather take indian reservations now the generality of those terms shouldn't obscure the fact that when avar congress intended a statute to apply to indian tribes it says indian tribes reservations except for a few or for its own exclusive use heating current right administers the statute by the officer in charge of such reservation saying each month how much fuel was sold other than an indian of the full blood who feel attempt to reside in indian country or on any indian reservation as a creator or to introduce goods or to create their him without such license shall forget all merchandise reservation and our point is that when congress to enact the hidden cartwright act it was aware that indian tribes were separate sovereigns distinct from the united states federal law established the general in applicability of state law and there on the unity from soup the purpose of the statute of course includes that which congress did not seek to change just as it does that which congress sought to change and here the states argument is made notwithstanding that the statute says nothing about indian tribes much less their own separate community which is based on the exclusive authority of the federal government over indian reservations under the constitution now the state makes the argument that indian reservations are included in the term united states military or other reservations well that simply read united states military out of the statute and the rule of construction quite well because the rule of construction is we are general words followed specific ones in  statute the general words are to be construed to include only things similar in nature congress had never similar in nature i mean what reservation is reserved from entry until recently well in alaska until the mid seventy's when the river lower forty eight was a little earlier any federal lands were subject to entry for homesteads homes site mining sites various ways by which private persons could acquire title from the federal government just by going there staking it out and doing some work there at what reservation means his land reserved f under the homestead act homestead act of mining was eight hundred sixty three and the various additions to it over the years military reservation is a reservation just because you can't stake out a mining claim there even if there's gold the creek indian reservation means white people can't go in there and take out a mining claim just because there's gold in the creek same thing with homes that you can't go in and stake out a homestead and get title through it just by building a house and working it for a number of years one for military or indian they are the same thing you can't get title wealth to get a level of generality one could say indian reservations could be included in the term but the unmistakably clear standard doesn't permit that kind of argument to succeed and and that's standard recognizes of course that if congress wanted to do it but then that can be fi quite easily but the indians talk but what else could reservation mean except reserved for men three i mean a lot of the reason there are indian reservations is during the gold rush  and and then the subsequent land rushes white people kept taking the indians land and so the federal government wanted to reserve the lands from entry the only way the white people could take it was under the homestead act and  and congress before the hidden card right acted and that was an act that had recognized the indian reservations were legally distinct from federal enclaves that is all other federal which does the same thing passed a statute that made the federal enclave last applicable to indian reservations there is proof that a little bit different though is the straightest in the sense that at the time of statutes were passed there was an open question as to whether speak criminal code words for people in indian country and congress finally resolved the problem by the major crimes  even more demanding the unmistakably clear standard but my point is that at the time the hidden part rights act was enacted congress had never treated federal enclaves as including indian or indian reservations statute which makes no reference to indian tribes whose immunity is separate and distinct from that of the united states which makes no reference to indian reservations that brings us back to the question i asked at the outset of your adversary's argument it seems to me as i've indicated to you a reservation is a reservation in flanders or from entry military wilderness indian whatever reservation means reserve from entry what's distinct about indian reservations isn't that their reservations but that they're indian because an indian tribe is a sovereign and a sovereign is very different from other persons or firms so what i was wondering was whether the gist of the indians argument cannot but rather sales where the customer is an indian tribe or perhaps individual indians would have to be exempt from tax well it's a distinction in who avoids the tax and i'm thinking that the tribe has the strongest claim to avoid the tax people well here of course none of the tribes have their own taxes which is what prompted litigation but let me highlight what you want of says that the indian tribes are separate sovereigns with their own sovereign private credit card that they're paying with and sign a form saying it's for purchase by the tribe and not pay the tax well hidden cartwright i would say doesn't purport to make indian tribes subject to state tax hundreds of miles from the tribes on land like with cherokees but once it's set aside your honor it's called an indian reservation and it is distinct from military reservations national parks national forest distinct from every other kind of federal area now the point that i'm making was the basis of the holding in the supreme court in warren trading posts via their the court considered whether the bok act which allows state sales tax in federal areas the court considered whether that meant indian reservations and th federal areas and any laying hands held are required by the united states the supreme court easily concluded that that that didn't include indian reservations and it reaffirmed that holding in central machinery in the more recent wrapper case the other case that i would point to the court that demonstrates how high the standard yours is brian versus the task of pounding the ear public lightweight he said the taxation won't apply the indian trust property the supreme court said no you can't imply the power to tax from negative implication well the same is true clear standard recognizes that of congress wanted to do it it can fix it but if indiana munity from state taxation is held to be abrogated that's not a f even after goodman the idaho legislature didn't change any of the provisions that its own court relied on instead they enacted emergency legislation as section fourteen says the statement of so they can actually do tax collection from the immune so