No. 85-489 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

JOHN K. OLSON and CATHRYN W. 

OLSON, 

Plaintiffs and Appellants, 

DEPARTMENT OF REVENUE, an agency 

of the State of Montana, JOHN LAFAVER, 

Director; MARGARET MONICAL, Clerk and 

Recorder for County of Park, a political 

subdivision of the State of Montana; and 

the STATE OF MONTANA, by MICHAEL T. GREELY 

Attorney General for the State of Montana, 

Defendants and Respondents. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Henry Loble, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Roger Tippy argued, Helena, Montana 

For Respondents: 

Hon. Mike Greely, Attorney General, Helena, Montana 

Judy Browning argued, Asst. Atty. General, Helena 

R. Bruce McGinnis argued, Dept. of Revenue, Helena, 

Monta.na 

Jack Yardley, Deputy County Attorney, Livingston, 

Montana 

Filed: 

Submitted: July 8, 1986 

Decided: October 24, 1986 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

On October 2, 1981, John and Cathryn Olson filed a 

complaint for declaratory jud-gment in the First Judicial 

District, in and for the County of Lewis and Clark. They 

alleged primarily that 5 15-30-103, MCA, is unconstitutional 

as applied to them because the State of Montana has denied 

them equal protection of the laws. On January 6, 1984, the 

Olsons filed a motion for summary judgment. After extensive 

briefing and a hearing on the matter, the District Court 

entered its judgment granting plaintiffs' motion for partial 

summary judgment on the issue of voting rights and denying 

their motion on the issue of income taxation. The Olsons 

have appealed from both orders in the judgment. We affirm. 

The Organic A.ct of the Territory of Monta.na, as enacted 

in 1864, defined part of the southern boundary as running due 

west on the 45th degree of latitude to a point formed by its 

intersection with the 34th degree of longitude west from 

Washington. 13 Stat. 85. By act of Congress, Yellowstone 

National Park (Yellowstone) was established in 1872. The 

northern boundary of Yellowstone was defined as the latitude 

of the junction of the Yellowstone and Gardiner Rivers, which 

is about three miles north of the 45th parallel. 16 U.S.C. 

5 21. Consequently, there is a strip of land in the northern 

part of Yellowstone, approximately three miles in width, that 

is within the State of Montana. These boundaries have remained unchanged to the present day. 

Appellants live in that portion of Yellowstone which is 

north of the 45th parallel--specifically, between Gardiner, 

Montana, and the community of Mammoth Hot Springs. Although 

they reside within the boundaries of Montana, they do not 
reside within the boundaries of any county. Because of their 

"county-less" status, appellants' right to vote was limited. 

Section 13-1-111(1) (c), MCA, requires that, in order to 

vote in elections, a person must be a resident of the State 

of Montana and of the county in which he offers to vote for 

at least thirty days. Pursuant to this statute, the Clerk 

and Recorder of Park County, Montana, created a special 

register of electors for persons residing in that strip of 

Yellowstone between the 45th parallel and the northern boundary of the Park. This special register was for a ballot 

limited to elections for federal offices; therefore, appellants, and others similarly situated, could not vote in any 

state or local elections. However, persons living in this 

area were given an opportunity to become annexed to Park 

County by elections held November 7, 1978. Although the 

voters of Park County approved the proposed annexation, the 

residents of that part of Yel.lowstone which is in Montana 

unanimously rejected it. Thus, no annexation occurred. 

Appellants are employed by TWA Services, Inc., a 

concessionnaire of the National Park Service at Mammoth Hot 

Springs, which is within the boundaries of the State of 

Wyoming. All of appellants1 job duties are performed outside 

of Montana. 

Beginning in 1975, the Department of Revenue (DOR) 

required appellants' employer to withhold from appellants' 

wages a certain amount of money for the state income tax, 

pursuant to §§ 15-30-103 and 15-30-202, MCA. Appellants 

filed timely returns claiming no income taxes were due the 

State because they resided on a federal area, and they applied for a refund of all taxes previousl-y withheld. DOR 

granted a refund to appellants for the taxable years ending 
December 31, 1974, and December 31, 1975. However, DOR 

subsequently reversed itself and demanded payment of the sums 

refunded. When appellants refused, DOR issued warrants for 

distraint for the return of the refunds. DOR has kept the 

amounts withheld from appellants' wages since the beginning 

of 1977 and has claimed that additional taxes are due. It 

began proceedings in September 1981 to garnish appellants' 

wages. 

On October 2, 1981, appellants filed a complaint for 

declaratory judgment. In their complaint, appellants alleged 

that § 15-30-103, MCA, is unconstitutional as applied to them 

because the State is denying them equal protection of the 

laws. They based this assertion on the fact that they were 

not allowed to vote in state and local elections. Additionally, they claimed that § 13-1-111(1) (c), MCA, is unconstitutional as applied to them. Appellants requested the District 

Court to issue a restraining order prohibiting DOR from 

garnishing their wages and to order a stay of execution of 

any DOR judgments against them for back taxes. In the alternative, appellants asked the court to find that they are not 

subject to state income taxes or to find that they may vote 

in national, state and local elections. 

On January 6, 1984, appellants moved for summary judgment. The court denied their motion as it related to the 

issue of the income tax but reserved judgment on the issue of 

voting rights until further briefing. Appellants subsequently moved the court to enter a partial summary judgment that 

1-1-lll(1) c is unconstitutional as applied to them. In 

its response, the State agreed that appellants could not 

constitutionally be denied the right to vote in state and 

local elections. The District Court entered a final judgment 
on August 23, 1985, granting appellants' motion for partial 

summary judgment on the issue of voting rights and denying 

their motion on the issue of income taxation. 

Appellants raise three issues for review: 

1. Whether the declaratory judgment of the District 

Court is responsive to the pleadings and issues raised regarding the constitutionality of the county residency requirement for voter registration and other benefits provided 

by county residency? 

2. Whether the State of Montana has generally denied 

appellants equal protection of the laws? 

3. Whether the legislature must take some formal 

action to accept retrocession of taxing jurisdiction by the 

federal government before an income tax can be lawfully 

assessed on appellants? 

Appellants first contend that the District Court's 

judgment is not responsive to their motion for summary judgment because it did not specifically declare that 

13-1-111 (1 c) was unconstitutional. In its Opinion, 

Memorandum and Order the court stated: 

[Pllaintiffs' Motion for Partial Summary 

Judgment is granted on this issue. The 

Court finds, declares and concludes that 

plaintiffs and plaintiff-intervenor, who 

are residents of that portion of 

Yellowstone National Park which is 

located within the exterior boundaries 

of the State of Montana, but not within 

any county of the state, must be permitted to vote in state and county elections . . . The franchise of state 

residents who have a substantial interest in the state's electoral decisions 

but do not live in a county should not 

be conditioned upon residency within a 

county for a period of thirty says [sic] 

as is required by Section 
13-1-11 (1) c , MCA. The Park County 

Clerk and Recorder should, upon request, 

permit those plaintiffs . . . to register and vote in state and local 

elections. 

Although the court did not specifically state that 

5 1-1-lll(1) c is unconstitutional, the judgment had the 

same effect. Appellants' motion was granted, and there is no 

uncertainty that they can now register a.nd vote in state and 

local elections. 

We find no error in the court's judgment. In Evans v. 

Cornman (1970), 398 U.S. 419, 90 S.Ct. 1752, 26 L.Ed.2d 370, 

the United States Supreme Court held that a state cannot 

constitutionally prohibit residents of a federal enclave 

located within that state from voting in state and local 

elections unless the state can demonstrate that those residents are not substantially interested in electoral decisions 

made within that state. In this case, the State has made no 

attempt to demonstrate the requisite lack of interest of 

appellants in electoral decisions; in fact, the State has 

agreed that appellants cannot constitutionally be prohibited 

from voting in state and local elections. Therefore, so that 

there is no doubt concerning appellants' right to fully 

participate in the electoral process, we hold that 

§ 13-1-1111) c is unconstitutional insofar as it acts to 

deny those who live in the Montana portion of Yellowstone 

from voting in state and local elections. Since the District 

Court's judgment achieved this same result, we find no reason 

to require the court to amend it. 

Appellants also contend that the court's judgment was 

silent as to certain collateral issues which were raised 

below; for example, whether appellants and their neighbors 

are residents for hunting or fishing license purposes. For 
the reasons set forth below, this contention need not be 

addressed. 

I1 

Appellants claim that the State has generally denied 

them equal protection of the laws because of their 

"county-less" status. They assert that because they do not 

reside in a county, they cannot run for county office, they 

cannot obtain a hunting or fishing license, and they do not 

have a county domicile for civil litigation venue purposes. 

Appellants contend that these statutes which require county 

residence before certain benefits can attach are unconstitutional as applied to them. 

At the threshold of every case, especially those where 

a statutory or constitutional violation is claimed to have 

occurred, is the requirement that the plaintiff allege "such 

a personal stake in the outcome of the controversy as to 

assure that concrete adverseness which sharpens the presentation of issues . . . " Baker v. Carr (1962), 369 U.S. 186, 

204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663, 678. This principle 

is generally referred to as standing to sue, and there are 

two distinct bases upon which standing rests. The first is 

the constitutional provision which extends original jurisdiction of the District Court to "cases at law and in equity." 

Art. VII, Sec. 4, 1972 Mont. Const. This provision has been 

interpreted as embodying the same limitations as are imposed 

by federal courts under the Article 3 "case or controversy" 

provision of the United States Constitution. See, Stewart v. 

Bd. of Cty. Com'rs of Big Horn Cty. (1977), 175 Mont. 197, 

573 P.2d 184. The second base of the doctrine is one of 

judicial self-restraint imposed for reasons of policy. 
At a minimum, the constitutional aspect of standing 

requires a plaintiff to show that he has personally been 

injured or threatened with immediate injury by the alleged 

constitutional or statutory violation. Before we can find a 

statute to be unconstitutional, "the party who assails it 

must show, not only that the statute is invalid, but that he 

has sustained, or is in immediate danger of sustaining some 

direct injury as a result of its enforcement, and not merely 

that he suffers in some indefinite way in common with people 

generally." Chovanak v. Matthews (1948), 120 Mont. 520, 526, 

188 P.2d 582, 585. 

It may be true that appellants would not have been 

permitted to obtain a hunting or fishing license if they had 

sought one. However, we do not know this because appellants 

have not alleged that they asked for such a license and were 

denied. Nor have they alleged that they sought to run for a 

county office and were prohibited from doing so; they have 

not even alleged that they want to do either of these things. 

It is not enough that appellants allege an injury which 

others may have suffered by the operation of some statute. 

They must allege an injury personal to themselves as distinguished from one suffered by the community in general. As 

stated by the United States Supreme Court in Warth v. Seldin 

(1975), 422 U.S. 490, 502, 95 S.Ct. 2197, 2207, 45 L.Ed.2d 

343, 357: 

Petitioners must allege and show that 

they personally have been injured, not 

that injury has been suffered by other, 

unidentified members of the class to 

which they belong and which they purport 

to represent. Unless these petitioners 

can thus demonstrate the requisite case 

or controversy between themselves personally and respondents, "none may seek 

relief on behalf of himself or any other 

member of the class." 
Appellants have not alleged a personal injury that is a 

prerequisite to an adjudication on the merits. Appellants 

may have shown that certain statutes could cause an injury to 

some unidentified persons living in the Montana portion of 

Yellowstone. However, the injury-in-fact test "requires more 

than an injury to a cognizable interest. It requires that 

the party seeking review be himself among the injured." 

Sierra Club v. Morton (1972), 405 U.S. 727, 734-735, 92 S.Ct. 

1361, 1366, 31 L.Ed.2d 636, 643. See also State v. Parker 

(1973), 161 Mont. 394, 506 P.2d 850. 

Appellants have not alleged a personal injury suffered 

by the operation of the statutes in question sufficient to 

meet the requirements of standing. Therefore, with the 

exception of their claim on the voting issue where a personal 

injury was shown, the alleged denial of equal protection will 

not be considered. 

I11 

in 1889, when Montana became a state, it acquired 

sovereignty over all persons and property within its jurisdiction, except for those things within the exclusive jurisdiction of the federal government. One of the most basic 

aspects of a state's sovereignty is its inherent power to 

levy a tax on its citizens, for without this power, the state 

as an entity would cease functioning. This power is limited 

only by the supremacy of the federal government and the 

federal constitution. "All subjects over which the sovereign 

power of a State extends, are objects of taxation; but those 

over which it does not extend, are, upon the soundest principles, exempt from taxation." MICulloch v. State of Maryland 

(1819), 4 Wheat 316, 429, 4 L.Ed. 579, 607. Therefore, where 
the federal government exercises exclusive jurisdiction, the 

state has no power to tax persons and property under that 

jurisdiction. 

In 1917 the legislature ceded exclusive jurisdiction 

over the Montana portion of Yellowstone National Park to the 

United States, reserving only the right to serve civil or 

criminal process. The State did not reserve the power to 

levy a tax upon any persons or property in that part of the 

Park. Thus, under Art. I, Sec. 8, C1. 17 of the united 

States Constitution, the State subsequently had no power to 

tax any persons residing in that area of the Park. However, 

in 1940, Congress passed what is commonly called the Buck 

Act. That Act provides: 

No person shall be relieved from liability for any income tax levied by any 

State, or by any duly constituted taxing 

authority therein, having jurisdiction 

to levy such a tax, by reason of his 

residing within a Federal area or receiving income from transactions occurring or services performed in such area; 

and such State or taxing authority shall 

have full jurisdiction and power to levy 

and collect such tax in any Federal area 

within such State to the same extent and 

with the same effect as though such area 

was not a Federal area. 

4 U.S.C. § 106 (a). 

The purpose of the Act was to remove the inequity that 

existed between individuals who resided on federal lands and 

paid no taxes and those who did not reside on federal lands. 

Prior to this Act, those persons living on federal areas were 

exempt from state income taxes but were able to enjoy the 

benefits offered by state citizenship. The Buck Act removed 

this inequity. 

The District Court found that the State acquired the 

right to tax those persons living in the Montana portion of 
Yellowstone by virtue of the Buck Act. Appellants contend 

that this is error. They assert that before the State can 

levy such a tax, the legislature must take some formal action 

to reclaim jurisdiction over that area; namely, amend the 

boundaries of Park County or amend S 2-1-207, MCA, which 

cedes exclusive jurisdiction over the area to the United 

States. 

Initially, we find important the fact that the Buck Act 

itself does not require any formal action prior to the 

state's acquisition of taxing jurisdiction. Specifically, 

the Act states that the "State or taxing authority shall have 

full jurisdiction - and power - to levy - and collect such tax -- 

. . . --- to the same extent ---- and with the same effect - as though 

----- such area was not a Federal area." [~mphasis added.] From a 

plain reading of the statute, Montana acquired jurisdiction 

to tax appellants by virtue of the Buck Act itself without 

the need for anything further to be done on the part of the 

legislature. 

Appellants have not cited, and we have been unable to 

find, any cases requiring formal action by the state legislature before the state could levy a tax on residents of a 

federal area. Kiker v. City of Philadelphia (Pa. 1943), 31 

A.2d 289, was the first major case to consider the effect of 

the Ruck Act on a state's taxing jurisdiction over residents 

of a federal area. An ordinance of the City of Philadelphia 

imposed an income tax on work performed in that city. Kiker 

was a resident of the State of New Jersey and was employed at 

the League Island Navy Yard, which was originally a part of 

Philadelphia. League Island was purchased by the United 

States in 1827 from Philadelphia who ceded exclusive jurisdiction over the area to the federal government. The 
Pennsylvania Supreme Court held that Kiker's income was 

subject to the city's income tax by virtue of the Buck Act 

even though he was a nonresident and was employed by the 

federal government. The court stated: 

Although plaintiff's salary was at that 

time immune from this levy ri.e., prior 

to the Buck Act], when the immunity wa.s 

removed by Public Act No. 819 [the Buck 

Act], which receded to Philadelphia 

jurisdiction to impose taxes on League 

Island, - the ordinance became applicable 

there without further action & either 

- the State legislature - or city council. 

When the disability of the State to tax 

federal incomes was removed, there was 

no need for a reenactment of the legislation to reach incomes formerly exempt; 

the powers originally granted, broad 

enough to include all income regardless 

of the source, were sufficient for the 

purpose. [Emphasis added.] 

Kiker, 31 A.2d at 297. 

The Indiana Supreme Court had before it the same argument a.s is advanced by appellants in this case; i.e., the 

Buck Act is permissive only, and since the legislature had 

failed to take further positive steps to reclaim taxing 

jurisdiction over the federal area, the tax could not be 

levied. That court held: 

In our opinion any immunity which appellee herein may have enjoyed from the 

payment of Indiana Gross Income tax, on 

income received from construction contracts performed for the United States 

by and through its duly authorized 

agents, on lands either ceded to or 

purchased by the United States, . . . was revoked by the enactment of § 106 of 

the "Buck Act" and it was not necessary 

for the Indiana Legislature to take any 

positive action either to amend or 

repeal the Cession Act of 1883, as 

amended. 

The enactment and enforcement of the 

Gross Income tax law was sufficient to 

show an acceptance by the State of 
Indiana of the offer of Congress to 

permit the levying of such taxes as 

provided in the "Buck Act," if such were 

necessary. 

State v. Pearson Construction Company (Ind. 1957), 141 ~.~.2d 

448, 453. 

We, too, find appellants' argument unpersuasive. The 

power to tax is an inherent feature of state sovereignty. 

Montana had jurisdiction originally to tax persons living in 

the Montana portion of Yellowstone prior to its cession to 

the United States. After the cession, the only impediment to 

levying such a tax was the exercise of exclusive jurisdiction 

over the area by the federal government. Therefore, the 

application of an income tax to appellants and others similarly situated does not depend upon an act of the Montana 

legislature, but rather upon the will of Congress. By passing the Buck Act, Congress expressed its intention to remove 

the jurisdictional impediment to taxing residents and employees of federal areas that existed prior to the Act. Montana 

regained taxing jurisdiction over residents of federal areas 

by virtue of the Buck Act itself, and there was no need for 

any further action to be taken by the legislature. The State 

is free to levy a. tax upon appellants' income "to the same 

extent and with the same effect" as if the Montana portion of 

Yellowstone were not a federal area. 

However, appellants point to $$ 2-1-215 and 2-1-216, 

MCA, for their assertion that retrocession of jurisdiction is 

not effective until acceptance by the governor. Since the 

governor has not accepted retrocession of taxing jurisdiction 

over the area in question yet, the State has no jurisdiction 

to tax appellants. Section 2-1-216, MCA, provides: 

(2) After acceptance and approval by 

the governor, retrocession of jurisdic- 
tion becomes effective upon filing of 

the original acceptance with the secretary of state of Montana. 

Read literally, this statute does seem to require acceptance 

by the governor prior to any retrocession of jurisdiction by 

the federal government. The legislative history of this 

statute indicates that the legislature probably did not 

intend to require acceptance by the governor prior to every 

retrocession. We need not decide this issue, however, because there is a fatal flaw in appellants' argument. 

Sections 2-1-21.5 and 2-1-216 were enacted in 1979, and 

there was no similar statute prior to that time. The Buck 

Act was passed in 1940. Consequently, the State acquired 

taxing jurisdiction over the Montana portion of Yellowstone 

in 1940 through the Buck Act. Although it is said that 

acceptance by the State is technically necessary to render a 

retrocession of jurisdiction effective, it is universally 

held that acceptance is presumed, especially where state 

taxation of the federal area is involved. S.R.A., Inc. v. 

Minnesota (1946), 327 U.S. 558, 66 S.Ct. 749, 90 L.Ed. 851; 

Burns v. State, Bureau of Revenue, Income Tax Div. (N.M. 

1968), 439 P.2d 702; Kiker, supra. We find nothing by the 

legislature indicating that retrocession of taxing jurisdiction was not accepted. Thus, Montana acquired taxing jurisdiction over the Park strip long before §§ 2-1-215 and 

2-1-216 were passed. In the absence of an express intent to 

the contrary by the legislature, statutes are presumed to 

operate prospectively only. Penrod v. Hoskinson, M.D. 

(1976), 170 Mont. 277, 552 P.2d 325. There is nothing in 

those statutes indicating an intent by the legislature to 

deprive the State of taxing jurisdiction in the absence of 

formal acceptance. We will not apply them retroactively to 
deprive the State of jurisdiction it had acquired almost 

forty years earlier. 

Appellants further contend that the State must cure its 

denial of equal protection of the laws, vis-a-vis the residents of the Park strip, before it can constitutionally levy 

an income tax on those residents. Specifically, they assert 

that before the income tax can be levied, the State must 

confer upon them all of the benefits of state citizenship now 

enjoyed by those who reside within a county. This is a novel 

argument indeed. To begin with, we have already determined 

that appellants do not have standing to raise their claims of 

denial of equal protection. However, even if we assume that 

appellants do not now enjoy all the benefits which derive 

from county residence, their argument still fails. 

It is beyond question that the State has the right to 

tax the incomes of nonresidents earned within this state. 

That principle was established over fifty years ago by the 

United States Supreme Court in Shaffer v. Carter (1920), 252 

U.S. 37, 40 S.Ct. 221, 64 L.Ed. 445. Yet, it is obvious that 

nonresidents do not share in all of the benefits conferred by 

residency within this state. Thus, by simple force of logic, 

appellants' simplistic argument that the State cannot levy a 

tax upon their incomes until it also bestows upon them every 

benefit enjoyed by those who reside within a county cannot be 

accepted. 

This same argument, although under slightly different 

facts, was raised in American Commuters Association v. Levitt 

(2nd Cir. 1969), 405 F.2d 1148. There, plaintiffs were 

nonresidents of New York and were subjected to New York 

income tax for work performed in that state. They sought a 

declaratory judgment holding unconstitutional various New 
York statutes which afford benefits to New York residents 

because those statutes discriminate against nonresidents. 

Plaintiffs argued that they could not take advantage of the 

benefits offered by residency in New York but were subjected 

to identical tax burden. The court rejected this argument, 

noting that New York residents are subjected to sales and 

property taxes in addition to the income tax, so there was 

not identical taxation between residents and nonresidents. 

In addition, plaintiffs did receive some benefits by reason 

of their working in New York, such as police and fire 

protection. 

In a case such as this one, where a tax is alleged to 

be unconstitutional because the claimants, whether they are 

residents or nonresidents, do not enjoy the same benefits as 

others who reside within this State, the controlling test in 

determining the constitutionality of the tax is "whether the 

state has given anything for which it can ask return." 

Wisconsin v. J. C. Penney Co. (1940), 311 U.S. 435, 444, 61 

S.Ct. 246, 250, 85 L.Ed. 267, 270-271. As residents of 

Montana, appellants enjoy substantial benefits. They are able 

to freely use the State's roads, enjoy the State's parks, 

have access to the State's courts, and have the right to run 

for state office. Since 1984 they have had the right to vote 

in state and local elections. Although the National Park 

Service now provides appellants with road maintenance and law 

enforcement within the Park, the State is obligated to supply 

those services to appellants. Should the Park Service ever 

decide to cease performing those services, road maintenance 

and police and fire protection would be provided by the 

State. Furthermore, appellants do not have an identical tax 

burden with county residents since they are not subject to 
any taxes imposed by reason of county residency. Therefore, 

we hold that the tax levied on appellants' income is constitutional and does not deprive them of equal protection of the 

laws. The denial of certain benefits, as alleged by appellants, is not a sufficient reason to prevent the State from 

levying an income tax upon them. Were it otherwise, every 

time an equal protection claim were sustained before this 

Court or before a federal court, the State would be obligated 

to return all income taxes withheld during the period the 

particular benefit was being denied. 

Affirmed. 

Chief Justice 

We concur: