FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BARONA BAND OF MISSION INDIANS, 

also known as BARONA GROUP OF

CAPITAN GRANDE BAND OF MISSION

INDIANS; BARONA TRIBAL GAMING

AUTHORITY,

Plaintiffs-Appellees, No. 06-55918

v. D.C. No.  CV-05-00257-DMS BETTY T. YEE; BILL LEONARD;

CLAUDE PARRISH; JOHN CHIANG; OPINION

STEVE WESTLY, each in his or her

official capacity as a member of

the California State Board of

Equalization,

Defendants-Appellants. 

Appeal from the United States District Court

for the Southern District of California

Dana M. Sabraw, District Judge, Presiding

Argued and Submitted

February 7, 2008—Pasadena, California

Filed June 18, 2008

Before: Harry Pregerson, Glenn L. Archer, Jr.,* and

Kim McLane Wardlaw, Circuit Judges.

Opinion by Judge Wardlaw

*The Honorable Glenn L. Archer, Jr., Senior United States Circuit

Judge for the Federal Circuit, sitting by designation. 

7057
COUNSEL

Bill Lockyer, W. Dean Freeman, Domini Pham, Leslie Branam Smith, San Diego, California, for the appellants. 

Art Bunce, Kathryn Clenney, Law Offices of Art Bunce,

Escondido, California, for the appellees. 

OPINION

WARDLAW, Circuit Judge: 

We must decide whether a non-Indian contractor who purchases construction materials from non-Indian vendors, which

are later delivered to a construction site on Indian land, is

exempt from state sales taxes. The California State Board of

Equalization (the “Board”) appeals the grant of summary

judgment in favor of the Barona Band of Mission Indians (the

“Tribe”) in which the district court determined that the balancing test set forth in White Mountain Apache Tribe v.

Bracker, 448 U.S. 136 (1980), preempted a state sales tax lev7060 BARONA BAND OF MISSION INDIANS v. YEE
ied against a non-Indian subcontractor performing electrical

work on the Tribe’s multi-million dollar casino expansion.

Because the Tribe, as part of its highly lucrative gambling

enterprise, merely marketed a sales tax exemption to nonIndians as part of a calculated business strategy, we conclude

that its strategic effort to receive construction services from

non-Indians at a competitive discount by circumventing the

state sales tax does not outweigh California’s interest in raising general funds for its treasury. The district court had jurisdiction under 28 U.S.C. § 1362, and we have jurisdiction

pursuant to 28 U.S.C. § 1291.1 We reverse and remand to the

district court for further proceedings consistent with this opinion.

I. BACKGROUND

After nearly two centuries of displacement of the Barona

Band of Mission Indians by European and then American

encroachment, the United States enacted legislation to provide

a tract of land in rural San Diego County to serve as a reservation for the Tribe. Until the early 1990s, however, the Tribe

suffered from deep structural economic difficulties. Following

the nationwide trend of Native Americans seeking to infuse

economic life into depressed reservations, the Tribe opened

up a casino in 1996: the Barona Valley Ranch Resort &

Casino — “Where The Real Players Play, and Win.” 

By 2001, enough of these real players had played and lost

for the Tribe to plan a $75 million expansion to the casino

floor and hotel, replete with a new wedding chapel, parking

1Although the Board has not pursued on appeal its contention that we

lack jurisdiction under the Tax Injunction Act, 28 U.S.C. § 1341, we must

consider the issue sua sponte. Having done so, we agree with the district

court that our courts have jurisdiction to entertain this action. Both the district court and we have jurisdiction because this is an appeal from an

action by the Tribe under 28 U.S.C. § 1362 to challenge a state imposed

tax. See Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463,

474-75 (1976). 

BARONA BAND OF MISSION INDIANS v. YEE 7061
structure and other resort amenities. The Tribe entered into a

lump sum contract with a general contractor, Hensel Phelps

Construction Co. (the “prime contract”) to construct the

expansion. Under California law, a lump sum contract “means

a contract under which the contractor for a stated lump sum

agrees to furnish and install materials or fixtures, or both.”

CAL. ADMIN. CODE tit. 18, § 1521(a)(8). Under the prime contract’s terms, Hensel Phelps entered into a series of subcontracts with contractors in the various trades to complete

discrete tasks. To that end, Hensel Phelps subcontracted with

Helix Electric, Inc. to perform the expansion’s electrical

work. 

As part of the prime contract terms, the Tribe touted a

method it had devised to circumvent state sales tax, which

would otherwise fall on the contractor, by scheduling deliveries to occur on tribal lands. Section 3.6.2 of the prime contract

reads: “[Barona Band] is a federally recognized Indian Tribe

and is therefore qualified for an exemption from California

state sales and use tax on the purchase of tangible personal

property if certain criteria are met. This Project is being structured, in accordance with Attachment O, to take advantage of

the tax-exempt status of the [Tribe].” Attachment “O” to the

prime contract carefully details the steps necessary for Hensel

Phelps and its subcontractors to enjoy sales tax-free construction work. Under Attachment “O,” Hensel Phelps and any

subcontractor are designated as the Tribe’s “purchasing agent

for the procurement of Construction Supplies.” The contractual language next provides a blueprint for the parties to follow in order to avoid state sales taxes. In bold lettering,

Attachment “O” requires that any purchase made by Hensel

Phelps and its subcontractors should only become officially

consummated, with title transferring, on the Tribe’s property.2

2Parties may not alter the substance of a transaction by inserting legal

formalisms into contractual language. See Northrop Corp. v. Bd. of Equalization, 110 Cal. App. 3d 132, 142-43 (Cal. Ct. App. 1980) (holding that

contract’s claim that title would not pass could not defeat economic reality

7062 BARONA BAND OF MISSION INDIANS v. YEE
All “shipping orders and delivery receipts,” according to the

contract, must include the following language: 

THIS SALE IS NOT COMPLETE, AND TITLE

DOES NOT PASS, UNTIL DELIVERY IS

ACCEPTED BY THE BUYER ON THE

BARONA INDIAN RESERVATION.

In a further effort to shield subcontractors from California

state sales tax, the prime contract directs that the “Contractor

shall not make advance payments to suppliers for materials or

equipment which have not been delivered or stored at this

site.” Provided that Hensel Phelps and its subcontractors

properly follow these steps, the Tribe promises to indemnify

and defend them against any assessment of tax liability. 

Under these terms, Helix Electric performed nearly four

million dollars worth of sales-tax-free electrical work on the

casino expansion. A Board-conducted audit concluded that

Helix Electric owed slightly over $200,000 in sales and use

tax emanating from purchases of construction materials—with

title purporting to transfer on Tribe territory—from nonIndian vendors for use on the casino expansion. The Board

issued a formal Notice of Determination to Helix demanding

that it pay sales taxes in that amount. Helix Electric then

sought indemnification from Hensel Phelps, which in turn

sought reimbursement from the Tribe. The Tribe sued individual members of the Board in their official capacity in the

United States District Court for the Southern District of California, seeking declaratory relief. The Tribe sought a judicial

determination that the California state sales tax was invalid

that required appellant to remit sales tax to the state). On the record before

us, it is unclear whether the economic realities of the subcontractors’ work

conformed to the advantageous assertions of title transfers contained in the

contract. Nevertheless, we need not determine this factual matter to

resolve the appeal before us. 

BARONA BAND OF MISSION INDIANS v. YEE 7063
(1) per se as a direct tax on the Tribe; (2) under the Bracker

balancing test as a tax leveled against non-Indians on Indian

territory; or (3) as preempted by the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701, et seq. (“IGRA”). The parties

filed cross-motions for summary judgment and submitted a

Joint Statement of Undisputed Material Facts. 

While the district court disagreed that the tax was a per se

improper tax levied against the Tribe, it did agree that the tax

failed the Bracker balancing test and granted the Tribe’s

motion for summary judgment. The Board timely appeals.

II. DISCUSSION

A. Per Se Invalidity 

Historically, the United States Supreme Court treated reservations as places where, in Chief Justice Marshall’s words,

the “laws of [a State] can have no force.” Worcester v. Georgia, 6 Pet. 515, 561 (1832). This viewpoint, however, has

softened over time, and the modern Court has “acknowledged

certain limitations on tribal sovereignty.” New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 331 (1983); see also

COHEN’S HANDBOOK OF FEDERAL INDIAN LAW §§ 6.01-6.03

(2005) (outlining shift from traditional view of Indian sovereignty). Thus, Indian tribes and their possessions are akin to

legal hybrids, “unique aggregations possessing attributes of

sovereignty over both their members and their territory . . .

retain[ing] any aspect of their historical sovereignty not

‘inconsistent with the overriding interests of the National

Government.’ ” Mescalero, 462 U.S. at 332 (citing Washington v. Confederated Tribes, 47 U.S. 134, 153 (1980)). 

[1] The historically entrenched idea of tribal autonomy,

however, remains central to our reasoning when confronted

with the application of state laws on tribal territory.

“[T]raditional notions of Indian self-government are so deeply

engrained in our jurisprudence that they have provided an

7064 BARONA BAND OF MISSION INDIANS v. YEE
important ‘backdrop’ against which vague or ambiguous federal enactments must always be measured.” Bracker, 448 U.S.

at 143 (internal citation omitted). A doctrine comparable, yet

not identical, to federal preemption developed to protect tribes

from State encroachment. Id. (“Tribal reservations are not

States, and the differences in the form and nature of their sovereignty make it treacherous to import to one notions of preemption that are properly applied to the other.”). Unlike traditional preemption, two conceptual barriers have been erected

to block State law from regulating Indian behavior: federal

enactments and Indian sovereignty. See Ramah Navajo School

Bd., Inc. v. Bureau of Revenue of New Mexico, 458 U.S. 832,

837 (1982). Thus, “State jurisdiction is preempted by the

operation of federal law if it interferes or is incompatible with

federal and tribal interests reflected in federal law, unless the

State interests at stake are sufficient to justify the assertion of

State authority.” Mescalero, 462 U.S. at 334. 

[2] This legal framework has often required us to undertake

careful balancing of various interests. See Bracker, 448 U.S.

at 142 (“[T]here is no rigid rule by which to resolve the question whether a particular state law may be applied to an Indian

reservation or to tribal members.”). Not so with state taxation

of Indian tribes. “In the special area of state taxation of Indian

tribes and tribal members, we have adopted a per se rule.”

California v. Cabazon Band of Mission Indians, 480 U.S.

202, 216 n.17 (1987). On the narrow question of whether a

state can tax Indian activity on an Indian reservation, the law

is clear. “[W]e adhere to settled law: when Congress does not

instruct otherwise, a State’s excise tax is unenforceable if its

legal incidence falls on a Tribe or its members for sales made

within Indian country.” Oklahoma Tax Comm’n v. Chickasaw

Nation, 515 U.S. 450, 453 (1995). 

The dispositive question for per se analysis is who the state

is taxing and where. “[U]nder our Indian tax immunity cases,

the ‘who’ and the ‘where’ of the challenged tax have significant consequences. We have determined that ‘[t]he initial and

BARONA BAND OF MISSION INDIANS v. YEE 7065
frequently dispositive question in Indian tax cases . . . is who

bears the legal incidence of [the] tax.’ ” Wagnon v. Prairie

Band Potawatomi Nation, 546 U.S. 95, 101 (2005) (citing

Okla. Tax Comm’n v. Chickasaw Nation, 515 U.S. 450

(1995)). The Court has instructed that lower courts seeking to

determine the legal incidence of the taxation should look to

the “fair interpretation of the taxing statute as written and

applied.” California Bd. of Equalization v. Chemehuevi Tribe,

474 U.S. 9, 11 (1985). 

[3] The party bearing the legal incidence of a state tax may

well differ from the party bearing the economic burden of that

tax. For instance, under Attachment “O” to the prime contract,

the Tribe will be the economically burdened party due to its

promise to indemnify Hensel Phelps and Helix Electric for

any state sales tax they are required to pay if the Board prevails. That the Tribe will pay the tax, however, does not

resolve the question of who bears the tax’s legal incidence.

The Court has rejected an argument equating the two: “[O]ur

focus on a tax’s legal incidence accommodates the reality that

tax administration requires predictability. . . . If we were to

make ‘economic reality’ our guide, we might be obliged to

consider, for example, how completely retailers can pass

along tax increases without sacrificing sales volume—a complicated matter dependent on the characteristics of the market

for the relevant product.” Oklahoma Tax Comm’n, 515 U.S.

at 459-60. 

[4] Therefore, we must examine the underlying California

statutes to determine whether the legal incidence falls upon

the Tribe, which would render the tax per se invalid, or Helix

Electric, a non-Indian party beyond the categorical exemption

from state taxation. As the district court correctly noted,

“[u]nder California statutes and regulations, a construction

contractor [Helix Electric] is the ‘consumer’ of materials furnished later to a client pursuant to a construction contract.”

“Either sales tax or use tax applies with respect to the sale of

the materials to or the use of the materials by the construction

7066 BARONA BAND OF MISSION INDIANS v. YEE
contractor.” CAL. ADMIN. CODE tit. 18, § 1521(b)(2)(A)(1).

Under CAL. ADMIN. CODE tit. 18, § 1521(a)(8), the “lumpsum” contract entered into by the parties falls within the taxing ambit of § 1521(b)(2)(A)(1). Thus, we agree with the district court that the legal incidence of the California sales tax,

under the pertinent regulations, falls upon Helix Electric, a

non-Indian party. 

[5] The Tribe attempts an end-run around the “legal incidence” test by structuring its contract to designate subcontractors as “purchasing agents” for the tax-exempt Tribe. Along

with the district court, we decline to extend the per se test,

rooted in due respect for Indian autonomy, to provide tax

shelters for non-Indian businesses. The parties may not alter

the economic reality of a transaction—a subcontractor performing electrical work for a general contractor—to reap a

windfall at the public’s expense. “The incidence of taxation

depends upon the substance of a transaction. . . . To permit the

true nature of a transaction to be disguised by mere formalisms, which exist solely to alter tax liabilities, would seriously

impair the effective administration of . . . tax policies.” See

Comm’r v. Court Holding Co., 324 U.S. 331, 334 (1945). The

legal incidence of the sales tax falls on Helix Electric, a nonIndian entity which purchased the construction materials, and

the structuring of the expansion as set forth in Attachment O

fails to per se exempt non-Indians from a valid state tax.

B. Bracker Balancing Test

[6] Without the convenience of a per se bright line test, we

turn to the Bracker balancing test, developed for those “difficult questions . . . where, as here, a State asserts authority

over the conduct of non-Indians engaging in activity on the

reservation.” Bracker, 448 U.S. at 144. The test calls for careful attention to the factual setting, requiring “a particularized

inquiry into the nature of the state, federal, and tribal interests

at stake, an inquiry designed to determine whether, in the specific context, the exercise of state authority would violate fedBARONA BAND OF MISSION INDIANS v. YEE 7067
eral law.” Id. at 145. The factual sensitivity of the test means

that “ ‘no rigid rule’ governs such an exercise of state authority.” Red Mountain Machinery Co. v. Grace Inv. Co., 29 F.3d

1408, 1410 (9th Cir. 1994). As an aid, however, “[t]he

Supreme Court has identified a number of factors to be considered when determining whether a state tax borne by nonIndians is preempted, including: ‘the degree of federal regulation involved, the respective governmental interests of the

tribes and states (both regulatory and revenue raising), and the

provision of tribal or state services to the party the state seeks

to tax.” Salt River Pima-Maricopa Indian Community v. Arizona, 50 F.3d 734, 736 (9th Cir. 1995) (citation omitted). 

As a backdrop to the Bracker test, we note a parallel line

of authority that aids in our analysis. The Court has previously expressed disfavor toward tribal manipulation of tax

policy to gain “an artificial competitive advantage over all

other businesses in a State.” Washington v. Confederated

Tribes of Colville Indian Reservation, 447 U.S. 134, 155

(1980) (hereinafter, “Colville”). In Colville, Indian tobacco

dealers, selling non-tribal products to non-Indians, sought

tribal exemption from Washington State’s tobacco excise tax

in order to sell less expensive products to budget-minded customers willing to travel to the reservation for the savings. Id.

at 145. The Court declined to extend the preemption doctrine

to cloak the tribe’s business practice. “What the smokeshops

offer these customers, and what is not available elsewhere, is

solely an exemption from state taxation. . . . We do not

believe that principles of federal Indian law, whether stated in

terms of pre-emption, tribal self-government, or otherwise,

authorize Indian tribes thus to market an exemption from state

taxation to persons who would normally do their business

elsewhere.” Id. at 155. We have understood Colville to support the principle that “[w]hen state taxes are imposed on the

sale of non-Indian products to non-Indians, as . . . in the socalled ‘smoke shop’ cases, the preemption balance tips toward

state interests.” Salt River Pima-Maricopa Indian Cmty., 50

F.3d at 737. 

7068 BARONA BAND OF MISSION INDIANS v. YEE
[7] Tribal interests are implicated by the imposition of the

California tax on the construction work performed by Helix

Electric on Tribal territory. The Tribe enjoys a right to autonomy within its territory, as noted in Bracker itself: “[T]here

is a significant geographical component to tribal sovereignty,

a component which remains highly relevant to the preemption inquiry; though the reservation boundary is not absolute, it remains an important factor to weigh in determining

whether state authority has exceeded the permissible limits.”

Bracker, 448 U.S. at 151. However, the right of territorial

autonomy is significantly compromised by the Tribe’s invitation to the non-Indian subcontractor to theoretically consummate purchases on its tribal land for the sole purpose of

receiving preferential tax treatment. That these sophisticated

parties contracted to create a taxable event on Indian territory

which otherwise would occur on non-Indian territory factually

distinguishes the present case from the multitude of cases

where courts have analyzed state taxation on non-Indians performing work on Indian land. See, e.g., Bracker, 448 U.S. at

137-38 (preempting Arizona’s motor carrier license and use

fuel taxes on non-Indian timber company entering Indian territory to fell trees planted on Indian territory); Crow Tribe of

Indians v. Montana, 819 F.2d 895, 897 (9th Cir. 1987) (preempting Montana coal taxes against non-Indians mining coal

located under reservation). 

[8] It also appears that permitting the tax on Helix Electric

may affect the overall profitability of the Tribe’s casino operation. If the California sales tax is validated, the Tribe must,

according to the contract, indemnify Helix Electric for over

$200,000. This amount will be compounded by amounts paid

to the other subcontractors, as well as Hensel Phelps. This

alone, however, does not bar the imposition of a tax on nonIndians. See Salt River Pima-Maricopa Indian Cmty., 50 F.3d

at 737 (“[T]he Ninth Circuit and the Supreme Court have

repeatedly held that ‘reduction of tribal revenues does not

invalidate a state tax.’ ”); Crow Tribe of Indians v. Montana,

650 F.2d 1104, 1116 (9th Cir. 1981) (“It is clear that a state

BARONA BAND OF MISSION INDIANS v. YEE 7069
tax is not invalid merely because it erodes a tribe’s revenues,

even when the tax substantially impairs the tribal government’s ability to sustain itself and its programs.”). It is true

that tribes have an interest in their economic self-sufficiency.

See California v. Cabazon Band of Mission Indians, 480 U.S.

202, 218 n.20 (1987) (“It is important to the concept of selfgovernment that tribes reduce their dependence on Federal

funds by providing a greater percentage of the cost of their

self-government.”) (citing 19 Weekly Comp. of Pres. Doc. 99

(1983)). However, this concern carries minimal weight in the

context of a $75 million casino expansion, and where but for

the contractual arrangement providing for indemnification by

the Tribe, it would be Helix’s revenues— and not the Tribe’s

—that would be reduced. Recognizing, moreover, that the

legal incidence of the tax falls upon a non-Indian subcontractor, we find the tribal interests to be weak. 

[9] The federal interests triggered by the tax are similarly

minimal. Federal interests are greatest when the government’s

regulation of a given sphere is “comprehensive and pervasive.” Ramah, 458 U.S. at 839. In Ramah, the Court found

significant federal interests since “[t]he direction and supervision provided by the Federal Government for the construction

of Indian schools le[ft] no room for the additional burden

sought to be imposed by the State through its taxation.” Id. at

841-42. The Court made a similar finding in Bracker regarding federal regulation of timber sales. Bracker, 448 U.S. at

145 (“At the outset we observe that the Federal Government’s

regulation of the harvesting of Indian timber is comprehensive.”). This is contrasted with the degree of regulation found

presently in IGRA. Through IGRA, Congress comprehensively regulates Indian gaming; however, California’s tax is

not on Indian gaming activity or profits, but rather on construction materials purchased by a non-Indian electrical subcontractor, which could be used for a multitude of purposes

unrelated to gaming. Simply put, IGRA is a gambling regulation statute, not a code governing construction contractors, the

legalities of which are of paramount state and local concern.

7070 BARONA BAND OF MISSION INDIANS v. YEE
Cf. Atchison, T & S.F. Ry. Co. v. Public Utilities Comm’n of

Cal., 346 U.S. 346, 355 (1953) (noting that “the construction

. . . of public streets is a matter peculiarly of local concern”).

The federal government has a concomitant interest in the

Tribe’s economic self-sufficiency. As with the related tribal

interest, the federal government’s interest in Indian economic

vitality does not alone defeat an otherwise legitimate state tax.

See Salt River Pima-Maricopa Indian Cmty., 50 F.3d at 739

(“The federal government has expressed an interest in assisting tribes in their efforts to achieve economic self-sufficiency.

However, that interest does not, without more, defeat a state

tax on non-Indians.”). This interest continues to fade when the

commercial activity is rigged to trigger a tax exemption. See

Colville, 447 U.S. at 155 (noting that “a congressional concern with fostering tribal self-government and economic

development [does] not go so far as to grant tribal enterprises

selling goods to nonmembers an artificial competitive advantage over all other businesses in a State”). Moreover, as noted

with the related tribal interest, our concern with selfsufficiency necessarily lessens in the specific context of a

multi-million dollar casino expansion. 

[10] We agree with the Board that the Bracker analysis tips

in its favor where the state levies a neutral sales tax on nonIndians’ purchases which—but for contractual creativity—

would have occurred on non-Indian land. In these circumstances, we find the state interest in the application of its general sales tax to be greater than the combined federal and

tribal interests. Raising revenue to provide general government services is a legitimate state interest. See Crow Tribe of

Indians, 650 F.2d at 1113 (“Of course, revenue raising to support government is a proper purpose behind most taxes.”);

Salt River Pima-Maricopa Indian Cmty., 50 F.3d at 737 (“The

state also has a legitimate governmental interest in raising

revenues, and that interest is likewise strongest when the tax

is directed at off-reservation value and when the taxpayer is

the recipient of state services.”). We recognize that the state

BARONA BAND OF MISSION INDIANS v. YEE 7071
interest strengthens where there is a nexus between the taxed

activity and the government function provided, and that such

a nexus is not found here. See Ramah, 458 U.S. at 843. Nevertheless, the state has a parallel interest in preventing the

manipulation of its tax laws to aid a casino in shopping tax

exemptions to local businesses who otherwise would remit

sorely needed revenue to the state. In the precise factual context presented here, the general state interests of revenue raising and consistent application of its tax laws trump the weak

interests of the Tribe and federal government. We conclude

that California’s tax of Helix Electric is a valid exercise of

state power under the Bracker test. 

C. Preemption by IGRA

[11] The Tribe also contends that the California sales tax on

the construction equipment used by Tribal subcontractors has

been directly preempted by IGRA. We agree, however, with

the Board that IGRA’s comprehensive regulation of Indian

gaming does not occupy the field with respect to sales taxes

imposed on third-party purchases of equipment used to construct the gaming facilities.3

 IGRA’s core objective is to regulate how Indian casinos function so as to “assure the gaming

is conducted fairly and honestly by both the operator and

players.” 25 U.S.C. § 2702(2). Extending IGRA to preempt

any commercial activity remotely related to Indian gaming—

employment contracts, food service contracts, innkeeper

codes—stretches the statute beyond its stated purpose.4

3The Tribe points with approval to 25 U.S.C. § 2710(d)(4), which states

that “nothing in this section shall be interpreted as conferring upon a State

or any of its political subdivisions authority to impose any tax, fee, charge,

or other assessment upon an Indian tribe.” However, as discussed above,

the tax in question has been imposed upon the non-Indian outfit Helix

Electric and not on the Tribe itself. 

4We agree with the Board that the compact entered into by the Tribe

and the State does not bear on our analysis here. See In re Indian Gaming

Related Cases, 147 F.Supp.2d 1011, 1018 (N.D. Cal. 2001) (“States cannot insist that compacts include provisions addressing subjects that are

only indirectly related to the operation of gaming facilities.”). The question before us is properly framed as a tax levied on a non-Indian tribe, and

therefore falls outside the scope of the compact. 

7072 BARONA BAND OF MISSION INDIANS v. YEE
The Court has developed the Bracker test to determine

whether federal interests preempt state taxes. If we were to

accept the Tribe’s argument that IGRA itself preempts the

state taxation of non-Indian contractors working on tribal territory, we would effectively ignore Bracker and its progeny.

The Court has provided an analytical framework to resolve

this question, which we must apply here. 

III. CONCLUSION

Because the legal incidence of the California sales tax falls

upon the non-Indian subcontractor, we agree with the district

court’s holding that the tax passes muster under the Chickasaw Nation per se test. 515 U.S. at 453. We disagree, however, that the Bracker preemption test invalidates the state tax

where the Tribe has invited commercial activity onto its territory for the purpose of marketing a sales tax exemption to

non-Indian businesses who would otherwise be liable for the

state tax under laws of general applicability. We therefore

reverse the district court’s grant of summary judgment to the

Tribe, and remand for judgment to be entered in favor of the

members of the California State Board of Equalization. 

REVERSED AND REMANDED.

BARONA BAND OF MISSION INDIANS v. YEE 7073