[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 14-14524

________________________

D.C. Docket No. 0:12-cv-62140-RNS

SEMINOLE TRIBE OF FLORIDA, 

a Federally recognized Indian Tribe, 

Plaintiff - Appellee,

versus

MARSHALL STRANBURG, 

Interim Executive Director And Deputy Executive Director,

Defendant - Appellant.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(August 26, 2015)

Before MARTIN and ROSENBAUM, Circuit Judges, and COOGLER,* District 

Judge.

ROSENBAUM, Circuit Judge: 

 * Honorable L. Scott Coogler, United States District Judge for the Northern District of 

Alabama, sitting by designation.

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Benjamin Franklin said, “[I]n this world nothing can be said to be certain, 

except death and taxes.”1

 He was almost right. As this case illustrates, even taxes 

are not certain when it comes to matters affecting Indian tribes. In this appeal, we 

consider whether Florida’s Rental Tax and Florida’s Utility Tax, as applied to 

matters occurring on Seminole Tribe lands, violate the tenets of federal Indian law. 

For the reasons that follow, we find that the Utility Tax as it involves activities on 

Tribe land does not, but the Rental Tax does.

I. Background

A. Factual Background

The Seminole Tribe of Florida (“the Tribe”) is a federally recognized Indian 

tribe with multiple reservations in Florida, including one near the city of 

Hollywood and one near the city of Tampa. The Tribe operates casinos on its

Hollywood and Tampa reservations. 

In May 2005, the Tribe entered into 25-year leases with two non-Indian 

corporations—Ark Hollywood, LLC, and Ark Tampa, LLC (“the Ark Entities”)—

to provide food-court operations at each casino. The leases required the Ark 

Entities to pay “to the applicable Federal, tribal and/or Florida governmental 

authority, any and all sales, excise, property and other taxes levied, imposed or 

 1 Letter from Benjamin Franklin to Jean-Baptiste Le Roy (Nov. 13, 1789), in 12 THE 

WORKS OF BENJAMIN FRANKLIN 160, 161 (John Bigelow, ed., Federal ed. 1904) (1888).

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assessed.”2 Through the Bureau of Indian Affairs (“BIA”), the Secretary of the 

Interior approved the leases, as required by statute. 

The State of Florida taxes commercial rent payments (the “Rental Tax”). 

See Fla. Stat. § 212.031. Florida describes the Rental Tax as a tax on the 

“privilege [of engaging] in the business of renting, leasing, letting, or granting a 

license for the use of any real property” in the state. Id. § 212.031(1)(a). The tax 

is assessed against the lessee based on the total amount of rent paid. Id. § 

212.031(1)(c), (2)(a). Under the law, the landlord collects and remits the tax to the 

state and is liable to pay the tax and incur penalties if it fails to perform these 

duties. Id. § 212.031(3); see id. § 212.07(2), (3). The tax itself constitutes a lien 

on the personal property of the lessee, and not, apparently, the land or property of 

the lessor. Id. § 212.031(4). 

 2 The text of the lease provides,

Tenant shall pay . . . to the applicable Federal, tribal and/or Florida 

governmental authority, any and all sales, excise, property and 

other taxes levied, imposed or assessed with respect to (i) the 

occupancy by Tenant of space on Reservation Land, (ii) the 

operation of Tenant’s business, (iii) Tenant’s inventory, furniture, 

trade fixtures, apparatus, equipment, and all leasehold 

improvements installed by Tenant or by Landlord on behalf of 

Tenant (except to the extent such leasehold improvements shall be 

covered by Taxes referred to in Section 6.1) and any other property 

of Tenant, and/or (iv) utility services provided to Tenant at the 

Premises (except those provided by Landlord), including, without 

limitation, [Broward County/Hillsborough County] taxes on 

electricity, gas, water and telecommunication services.

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Florida also imposes a tax “on gross receipts from utility services that are 

delivered to a retail consumer” in Florida (“the Utility Tax”). See Fla. Stat. § 

203.01(1)(a)(1) (2012).3

 The statute permits a utility provider, at its discretion, to 

separately state this Utility Tax as a line item on the customer’s bill but does not 

require it to do so. See id. § 203.01(4). If the provider does separately state the tax 

on the bill, the statute requires the consumer to remit the tax to the service provider 

and states that the tax becomes part of the debt owed to (and recoverable by) the 

service provider. Id. The statute clarifies, though, that the “tax is imposed upon 

every person for the privilege of conducting a utility or communications services 

business, and each provider of the taxable services remains fully and completely 

liable for the tax, even if the tax is separately stated as a line item or component of 

the total bill.” Id. § 203.01(5). 

Similarly, Florida’s administrative regulations specify that even when stated 

on the consumer’s bill, the “tax is imposed on the privilege of doing business, and 

it is an item of cost to the distribution company,” who “remains fully and 

completely liable for the payment of the tax, even when the tax is wholly or 

partially separately itemized on the customer’s bill.” Fla. Admin. Code R. 12B6.0015(3)(a). A service provider may, however, claim a credit or refund for net 

 3 A new version of the utility tax statute took effect on July 1, 2014, with minor changes in 

language that are not relevant to this lawsuit. Act of May 12, 2014, ch. 38, sec. 4, 2014 Fla. 

Laws 4-9. We cite language from the version that was in effect at the time the Tribe filed its 

lawsuit in October 2012.

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uncollected billings when it prepays the tax to the state based on gross billings, as 

opposed to actual gross receipts. Fla. Admin. Code R. 12B-6.005(1)(e). A service 

provider who fails to remit the tax to the state is also guilty of a misdemeanor. Fla. 

Stat. § 203.01(6).

Florida assessed the Rental Tax against the Ark Entities for the period of 

July 2005 through June 2008. The Tribe has paid the Utility Tax stated as a 

component of its utility bill. Although the Tribe applied to the Florida Department 

of Revenue for a refund of the amount of the Utility Tax it paid beginning in 2008 

through July 2011, it was denied a refund. The Ark Entities also applied for a 

refund of the Rental Tax, which was denied. 

B. Procedural History

Following these denials, on October 30, 2012, the Tribe filed a federal 

complaint against the State of Florida and Marshall Stranburg, the interim 

Executive Director of the Florida Department of Revenue,4 seeking declaratory and 

injunctive relief. Within the next few days, the Ark Entities filed suits in the 

Florida state courts contesting the denials of their refunds. Both state cases were 

still pending at the time this appeal was filed, although the case related to the 

Hollywood casino was apparently stayed pending the disposition of the federal 

case. 

 4 Stranburg was appointed the Executive Director of the agency on April 23, 2013.

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Stranburg sought dismissal of the Tribe’s federal complaint on multiple 

grounds, including “the abstention doctrine and the principles of exhaustion and 

comity.” The United States District Court for the Southern District of Florida

rejected the abstention argument, noting that “this case involves a different 

plaintiff, seeking prospective injunctive relief and declaratory relief unrelated to 

Ark Hollywood’s and Ark Tampa’s requested refund. This Court will not shirk its 

obligation to adjudicate this matter, when it so clearly has jurisdiction over the 

issues presented.” Stranburg did not raise the comity or abstention issue again in 

the district court.5

After conducting limited discovery, the parties cross-moved for summary 

judgment. The district court granted summary judgment in favor of the Tribe on 

all of its claims. With respect to the Rental Tax, the court concluded that 25 

U.S.C. § 465 expressly prohibits the Rental Tax because the Rental Tax is a tax on 

Indian land rights. See Seminole Tribe of Fla. v. Florida, 49 F. Supp. 3d 1095, 

1097-98 (S.D. Fla. 2014). The district court also held in the alternative that if the 

statute did not expressly prohibit the Rental Tax, the tax was nonetheless 

preempted by federal law and impermissibly interfered with tribal sovereignty. Id.

at 1098-102. In reaching this holding, the district court gave deference, short of 

 5 The district court dismissed the State of Florida as a defendant based on Eleventh 

Amendment immunity grounds.

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full Chevron deference, to BIA regulations that prohibit taxes on leases of Indian 

land. See id. at 1099-100.

As for the Utility Tax, the district court similarly found it to be 

impermissible. In particular, the court reasoned that the legal incidence of the 

Utility Tax fell on the Tribe, not on the utility company, and federal law generally 

prohibits taxing Indians for on-reservation activities. See id. at 1103-08.

Stranburg now appeals the district court’s rulings. With respect to the 

Rental Tax, Stranburg contends that the district court erred both in finding a 

statutory prohibition of the tax and federal preemption of the tax. Stranburg also 

revives his comity argument, asserting that the district court should never have 

adjudicated the Rental Tax claim while the Ark Entities’ state-court cases were 

pending. 

Stranburg further contends that the district court erred in determining the 

legal incidence of the Utility Tax to be on the Tribe rather than on the utility 

company. Because, in Stranburg’s view, the tax falls on the utility company, he 

argues that the district court should have conducted a preemption inquiry. With 

the benefit of the parties’ briefs and oral argument, we now affirm in part and 

reverse in part.

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II. Standards of Review

We review a district court’s grant of summary judgment de novo, 

considering all the evidence and viewing facts in the light most favorable to the 

non-moving party. Morales v. Zenith Ins. Co., 714 F.3d 1220, 1226 (11th Cir. 

2013). Summary judgment is appropriate only when “there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law.” 

Id. A court should grant summary judgment against a party “who fails to make a 

showing sufficient to establish the existence of an element essential to that party’s 

case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552 (1986).

We review a district court’s ruling on abstention for an abuse of discretion. 

Ambrosia Coal & Constr. Co. v. Pagés Morales, 368 F.3d 1320, 1332 (11th Cir. 

2004). A district court abuses its discretion if it misapplies the law or makes 

findings of fact that are clearly erroneous. Id. (citations omitted).

III. Florida’s Rental Tax

Stranburg contends on appeal that the district court erred in finding the Ark 

Entities statutorily exempt from Florida’s Rental Tax, in its alternative holding that 

federal law preempts the Rental Tax, and in its failure to dismiss the Tribe’s

challenge on comity grounds. After carefully considering this issue of first 

impression in our Circuit, we conclude that the district court correctly interpreted

25 U.S.C. § 465 to preclude Florida from collecting its Rental Tax on the rent 

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payments made by non-Indian lessees of protected Indian reservation land. 

Although Stranburg’s arguments are not without some appeal, we nonetheless find 

that the Tribe’s interpretation best comports with the statutory text and purpose, the 

relevant Supreme Court case law, and the general canon that statutes be construed 

in Indians’ favor. Accordingly, we affirm the district court on this basis.

We further hold that, even if the statutory exemption did not apply, federal 

law preempts the Rental Tax in this case under the balancing inquiry outlined in 

White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S. Ct. 2578 (1980). 

While we respectfully disagree with the district court’s application of the Bracker

inquiry because it relied on a conclusion of preemption promulgated by the 

Secretary of the Interior instead of conducting its own particularized inquiry, we 

nonetheless affirm the ultimate preemption holding based on a de novo Bracker

analysis of the record before us.

A. Statutory Exemption

The district court concluded that 25 U.S.C. § 465 barred Florida from 

assessing its Rental Tax against the non-Indian lessees of the Tribe’s reservation 

land. The district court, as does the Tribe on appeal, relied heavily on the Supreme 

Court’s decision in Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S. Ct. 1267 

(1973), for the proposition that § 465 prohibits taxes on land rights that are so 

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connected to the land that the tax amounts to a tax on the land itself. We agree 

with the district court’s analysis.

The Indian Reorganization Act of 1934 was passed by Congress with the 

intent of “rehabilitat[ing] the Indian’s economic life and [giving] him a chance to 

develop the initiative destroyed by a century of oppression and paternalism,” 

through, among other things, giving tribes greater control over their affairs and 

property. See Mescalero, 411 U.S. at 152, 93 S. Ct. at 1272 (citations and internal 

quotation marks omitted). Section 5 of the Act, codified at 25 U.S.C. § 465, has 

been described as the “capstone” of the Indian Reorganization Act’s land 

provisions, provisions that were designed to improve Indians’ economic standing 

through the use of land acquired by the Secretary of the Interior “with at least one 

eye directed toward how tribes will use those lands to support economic 

development.” See, e.g., Match-E-Be-Nash-She-Wish Band of Pottawatomi 

Indians v. Patchak, 132 S. Ct. 2199, 2211 (2012). Accordingly, Section 5 of the

Act authorizes the Secretary “to acquire . . . any interest in lands, water rights, or 

surface rights to lands . . . for the purpose of providing land for Indians.” 25 

U.S.C. § 465. The statute provides that title to the land or rights acquired will be 

taken by the United States in trust for the Indian tribe and that “such lands or rights 

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shall be exempt from State and local taxation.”6 Id. The Supreme Court has held 

that, “[o]n its face, the statute exempts land and rights in land” from state taxation. 

Mescalero, 411 U.S. at 155, 93 S. Ct. at 1274.

In Mescalero, the Indian plaintiffs operated a ski resort on off-reservation 

land in New Mexico that was developed under the 1934 Act.7 Id. at 146, 93 S. Ct. 

at 1269. New Mexico sought to levy two taxes related to the ski resort: a grossreceipts tax from the sale of services and tangible property at the resort and a use 

tax based on the purchase price of materials used to construct two ski lifts at the 

resort. Id. at 147, 93 S. Ct. at 1269-70. The Supreme Court first rejected a blanket 

characterization of the resort as a “federal instrumentality” that would be exempt 

from all state taxation, id. at 150-55, 93 S. Ct. at 1271-74, and then considered the 

language from § 465. 

In analyzing § 465’s application to the gross-receipts tax, the Court observed 

that while the statute precluded taxes on land or on rights in land, it did not exempt

from state taxation the income derived from the use of the land. Id. at 155, 93 S. 

Ct. at 1274. The Court first noted that tax exemptions are not granted by 

implication and then recalled that not all state and federal taxes on Indians are 

 6 Stranburg does not appear to contest that the Tribe’s Hollywood and Tampa reservations 

qualify as land acquired and held in trust under this statute.

7 The land was actually leased from the United States Forestry Service, but the Court found 

that the land fell under § 465 despite its unique provenance. See 411 U.S. at 155 n.11, 93 S. Ct. 

1274 n.11.

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categorically barred. Id. at 156-57, 93 S. Ct. at 1274-75. For example, the Court 

cited its prior decisions in Choteau v. Burnet, 283 U.S. 691, 51 S. Ct. 598 (1931), 

and Leahy v. State Treasurer, 297 U.S. 420, 56 S. Ct. 507 (1936), in which the 

Court upheld, respectively, federal and state income taxes on income derived from 

oil, gas, and mineral exploration on Indian lands after that income was distributed 

from a federal trust fund to individual Indians. In those cases, the Supreme Court 

decided, in part, that income distributed to individual Indian tribe members and 

freely useable by them was taxable even when the source of that income was 

exempt from taxation. See Choteau, 283 U.S. at 696-97, 51 S. Ct. at 600-01; 

Leahy, 297 U.S. at 421, 56 S. Ct. at 507. Ultimately, the Mescalero Court likened 

the gross-receipts tax to these taxes on income, as opposed to a tax on property, 

and found that it was not barred by § 465. 411 U.S. at 157, 93 S. Ct. at 1275.

In contrast, the Court did hold that § 465 prohibited the state’s use tax on the 

ski-lift materials. The Court observed that under the statute, “these permanent 

improvements on the Tribe’s tax-exempt land would certainly be immune from the 

State’s ad valorem property tax.” Id. at 158, 93 S. Ct. at 1275. As the Court 

explained, use “is among the ‘bundle of privileges that make up property or 

ownership’ of property and, in this sense, at least, a tax upon ‘use’ is a tax upon the 

property itself.” Id. (citation omitted). While conceding that not all use taxes 

could be viewed as property taxes, the Court concluded that “use of permanent 

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improvements upon the land is so intimately connected with use of the land itself 

that an explicit provision relieving the latter of state tax burdens must be construed 

to encompass an exemption for the former.” Id. at 158, 93 S. Ct. at 1275-76.

In our view, Mescalero stands for the proposition that § 465 precludes state 

taxation of that “bundle of privileges that make up property or ownership of 

property.” See id. at 158, 93 S. Ct. at 1275 (citation and internal quotation marks 

omitted). The ability to lease property is a fundamental privilege of property 

ownership. See, e.g., Terrace v. Thompson, 263 U.S. 197, 215, 44 S. Ct. 15, 17-18 

(1923) (noting that “essential attributes of property” include “the right to use, 

lease, and dispose of it for lawful purposes”). By taxing the “privilege” of 

“engag[ing] in the business of renting, leasing, letting, or granting a license for the 

use of any real property,” the State of Florida is taxing a privilege of ownership 

just as New Mexico’s tax in Mescalero taxed the privilege of use.

Stranburg attempts to overcome this analysis in several ways. First, he tries 

to distinguish the Rental Tax from the tax in Mescalero and limit the holding of 

that case. Next, he asserts that the Supreme Court has foreclosed the district 

court’s reading of Mescalero with its decision in Cotton Petroleum Corp. v. New 

Mexico, 490 U.S. 163, 109 S. Ct. 1698 (1989). And finally, he relies on caselaw 

from the Ninth Circuit purportedly upholding a similar tax in California. We find 

none of Stranburg’s arguments ultimately persuasive.

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1. The Rental Tax Is Not Materially Distinguishable from the Use Tax in

Mescalero that the Supreme Court Determined Violated § 465

Stranburg’s efforts to distinguish the Rental Tax from the tax at issue in 

Mescalero gain no traction. Specifically, Stranburg characterizes the Rental Tax as 

a “transactional tax on the payment of rent” and likens it more to the gross-receipts 

tax in Mescalero as a tax on income rather than on the land.

8 And, of course, the 

Tribe receives income from the rent payments. 

But these payments secure a lessee’s possessory interest in the land for the 

duration of the lease. See generally Winters Coal Co. v. Comm’r, 496 F.2d 995, 

998 (5th Cir. 1974) (plurality op.) (“There is little conflict or disagreement with the 

old hornbook principle that a lease is a conveyance and creates in the lessee an 

estate which entitles him to exclusive possession unless certain rights are reserved 

by the lessor.”); Lease, Black’s Law Dictionary (10th ed. 2014) (“A contract by 

which a rightful possessor of real property conveys the right to use and occupy the 

property in exchange for consideration, usu[ally] rent”). Just as the use of 

 8 Although Stranburg analogizes rent to income derived from the land, elsewhere, he is 

careful to describe the legal incidence of the Rental Tax as falling on the payments by the nonIndian lessees rather than on the Tribe’s income. His reasons for doing so are well-founded, as 

states generally may not tax Indian tribes for on-reservation activities. See Okla. Tax Comm’n v. 

Chickasaw Nation, 515 U.S. 450, 458, 115 S. Ct. 2214, 2220 (1995). We assume for this 

opinion that Stranburg is correct that the legal incidence of Florida’s Rental Tax falls on the nonIndian lessees, an assumption not challenged by the Tribe. Even so, our conclusion does not 

change. By the plain text of the statute, the tax exemption contained in § 465 attaches to the land 

and the rights in that land protected under the statute. See 25 U.S.C. § 465 (“[S]uch lands or 

rights shall be exempt from State and local taxation.” (emphasis added)). So, even if the legal 

incidence of the Rental Tax falls on the Ark Entities, the tax itself is expressly precluded because 

a tax on the payment of rent is indistinguishable from an impermissible tax on the land.

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permanent improvements on land “is so intimately connected with use of the land 

itself,” Mescalero, 411 U.S. at 158, 93 S. Ct. at 1275, payment under a lease is 

intimately and indistinguishably connected to the leasing of the land itself. And in 

this respect, the Rental Tax is distinguishable from the gross-receipts sales tax in 

Mescalero or the severance and excise taxes discussed in cases like Cotton 

Petroleum, 490 U.S. at 168-69 & n.4, 109 S. Ct. at 1703, or Oklahoma Tax 

Commission v. Texas Co., 336 U.S. 342, 345-47, 69 S. Ct. 561, 563-64 (1949).9

 

Florida’s Rental Tax is a tax on a right in land, while the others tax economic 

 9 Cotton Petroleum, which is discussed more fully below, involved a challenge to five 

taxes levied by New Mexico on the production of oil and gas from leased Indian lands. 490 U.S. 

at 168-69 & n.4, 109 S. Ct. at 1703 & n.4. Texas Co. involved a challenge by non-Indian lessees 

to two Oklahoma taxes, one a tax on the gross production value of oil and gas and the other an 

excise tax on every barrel of oil produced in the state. 336 U.S. at 345-47, 69 S. Ct. at 563-64. 

In Texas Co., the Oklahoma Supreme Court had invalidated the taxes on the basis that the lessees 

were instrumentalities of the Federal government. Id. at 348, 69 S. Ct. at 565. In reversing the 

state supreme court, the United States Supreme Court noted that intergovernmental immunity did 

not extend tax immunity to property or gains earned by private persons under a lease of restricted 

Indian land. Id. at 363, 69 S. Ct. at 572. Although the Court’s holding rested on interpreting the 

intergovernmental-immunity doctrine, significantly, the Court emphasized in Texas Co. that the 

case “present[ed] no question concerning the immunity of the Indian lands themselves from state 

taxation,” id. at 353, 69 S. Ct. at 567, and distinguished the taxable nature of oil removed from 

the land itself, see, e.g., id. at 354, 358, 69 S. Ct. at 568, 570.

In its discussion of New Mexico’s gross-receipts tax, Mescalero also cited Texas Co. for 

the proposition that “[l]essees of otherwise exempt Indian lands are also subject to taxation.” 

Mescalero, 411 U.S. at 157, 93 S. Ct. at 1275. Stranburg seizes on this statement as a 

declaration that all lessees of Indian land are subject to all state taxation. But Stranburg’s 

assertion ignores both the context of Mescalero—where the statement was included in the 

discussion of the gross-receipts tax, and not the tax on land—and the context of Texas Co.—

which dealt with taxes on oil that had been removed from the land. Accordingly, the citation to 

Texas Co. in Mescalero does not have the reach Stranburg attributes to it and stands for the now 

uncontroversial proposition that non-Indian lessees of Indian land may be subject to some state 

taxation. See, e.g., Cotton Petroleum, 490 U.S. at 175, 109 S. Ct. at 1707.

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activity (sales receipts) or tangible property (oil or gas) removed by one or more 

degrees from the land.

Additionally, to the extent any ambiguity exists with respect to the tax 

exemption contained in § 465, resolving that ambiguity in favor of the Tribe 

comports with the long-standing canon that statutes be construed liberally in favor 

of Indians. See Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766, 105 S. 

Ct. 2399, 2403 (1985) (citations omitted) (“[S]tatutes are to be construed liberally 

in favor of the Indians, with ambiguous provisions interpreted to their benefit.”). 

We acknowledge that the Supreme Court has cautioned that this canon “is offset by 

the canon that warns us against interpreting federal statutes as providing tax 

exemptions unless those exemptions are clearly expressed.” Chickasaw Nation v. 

United States, 534 U.S. 84, 95, 122 S. Ct. 528, 535-36 (2001). But no “offset” is 

warranted here. Unlike a tax exemption purportedly legislated “through an 

inexplicit numerical cross-reference,” id. at 90, 122 S. Ct. at 533, § 465 expressly 

exempts land and rights in that land from state taxation. Any “ambiguity” present 

centers not around the existence of a tax exemption, but rather the scope of the

land rights included within that exemption. 

In sum, we find that construing § 465 to preclude Florida’s Rental Tax 

aligns with the text and purpose of the Indian Reorganization Act, the Supreme 

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Court’s interpretation of § 465 in Mescalero, and the general canon that statutes be 

construed in Indians’ favor.

2. Cotton Petroleum Does Not Foreclose the Statutory Exemption

Stranburg argues further, though, that even if Mescalero can be read to 

preclude the Rental Tax, that reading was subsequently abrogated by the Supreme 

Court in Cotton Petroleum. We disagree.

In Cotton Petroleum, the Supreme Court confronted the question of whether 

New Mexico could impose taxes on oil and gas produced by non-Indian lessees of 

wells located on the tribe’s reservation. 490 U.S. at 166, 109 S. Ct. at 1702. In 

answering that question, the Court looked to the Indian Mineral Leasing Act of 

1938 (“1938 Act”), 25 U.S.C. § 396a, and its predecessors, which permitted the 

tribe to lease reservation land for mineral exploitation, subject to approval by the 

Secretary of the Interior. Id. at 167, 109 S. Ct. at 1702. 

The Court recounted its shifting doctrines concerning state taxation of nonIndian lessees’ oil production, noting that its old rule required the tax to be 

specifically authorized by Congress, while the new rule upheld the state’s tax 

unless it was “expressly or impliedly prohibited by Congress.” Id. at 173, 109 S. 

Ct. at 1706. The “current doctrine” permits a state, absent a grant of tax immunity 

by Congress, to “impose a nondiscriminatory tax on private parties with whom the 

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United States or an Indian tribe does business, even though the financial burden of 

the tax may fall on the United States or tribe.” Id. at 175, 109 S. Ct. at 1707. 

Although the Court found no express discussion of taxation in the 1938 Act, 

it concluded that the silence of Congress on the issue was explained by the shifting 

doctrines. As the Court noted, predecessors to the 1938 Act dealing with leasing 

of Indian lands for mineral exploitation expressly permitted state taxation. See id.

at 181-83, 109 S. Ct. at 1710-11; see also 25 U.S.C. § 398; 25 U.S.C. § 398c. 

These express authorizations in 1924 and 1927 were in line with the earlier 

doctrine. But by 1938 the new doctrine was in place, and the Court refused to read 

the silence of the 1938 Act as either a repeal of the previously authorized state 

taxes or an implied prohibition on state taxation. Id. at 182, 109 S. Ct. at 1710.

Although the Cotton Petroleum Court was analyzing the 1938 Act, in a 

footnote, it commented that the Indian Reorganization Act of 1934, among other 

Indian-related statutes, “no more express[es] a congressional intent to pre-empt 

state taxation of oil and gas lessees than does the 1938 Act.” Id. at 183 n.14, 109 

S. Ct. at 1711 n.14 (emphasis added). Based on this footnote, Stranburg asserts 

that the Supreme Court “concluded squarely” that § 465 does not express a 

congressional intent to preempt state taxation on all lessees of Indian land. But 

Stranburg’s argument overlooks the fact that the Supreme Court’s comment 

applies to just oil and gas lessees specifically, which are fundamentally different 

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from general land leases, in that they allow extraction of products from the land. 

The Court, in this footnote, simply did not address the full scope of § 465’s tax 

exemption. Extending the Cotton Petroleum footnote to encompass all lessees of 

Indian land would ignore both the express text and the larger context of the Court’s 

opinion.

3. The Ninth Circuit’s Construction of the Statute

Stranburg also relies heavily on the Ninth Circuit cases of Agua Caliente 

Band of Mission Indians v. Riverside County, 442 F.2d 1184 (9th Cir. 1971), Fort 

Mojave Tribe v. San Bernardino County, 543 F.2d 1253 (9th Cir. 1976), and

Confederated Tribes of Chehalis Reservation v. Thurston County Board of 

Equalization, 724 F.3d 1153, 1158 n.7 (9th Cir. 2013), for the proposition that § 

465 does not preclude the Rental Tax. In Agua Caliente, the Ninth Circuit upheld 

(over a persuasive dissent that foreshadowed the Bracker inquiry) California’s 

possessory-interest tax, which it characterized as a tax on the “full cash value of 

the lessee’s interest” in the land rather than a tax on the “land as such.” See 442 

F.2d at 1186. In Fort Mojave, the Ninth Circuit held that another section of the 

Indian Reorganization Act did not preempt the possessory-interest tax because the 

tax did not threaten to encumber the Indian’s interest. 543 F.2d at 1256. 

Significantly, neither the Agua Caliente nor Fort Mojave decisions mentioned or 

apparently considered § 465 at all.

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In Chehalis Reservation, the Ninth Circuit recently invalidated a 

Washington state tax on permanent improvements owned by a non-Indian 

corporation on Indian land acquired under § 465. 724 F.3d at 1157-58. In a 

footnote in that opinion, the Ninth Circuit panel commented that the taxes upheld 

in Agua Caliente and Fort Mojave were distinguishable from the Washington tax 

and the New Mexico tax in Mescalero because, in the former cases, the state 

imposed taxes on non-Indian lessees’ possessory interests while, in the latter, the 

states imposed property taxes on the land, which included permanent 

improvements to the land. Id. at 1158 n.7. 

Stranburg argues that after Chehalis Reservation, the Ninth Circuit has 

determined that § 465 “bars state taxes directly on land or on permanent 

improvements to land, and only those two areas,” and urges us to adopt that 

reading here. But Stranburg’s construction is too narrow. First, the Chehalis 

Reservation footnote did not limit § 465’s application to only land and permanent 

improvements on land. Indeed, it recognized that § 465 precluded taxes on land 

and on land rights; it just implicitly decided, without elaboration, that possessory 

interests were not rights in the land. See id. Moreover, in Mescalero, the Supreme 

Court itself did not expressly limit its holding to only permanent improvements. 

The opinion points out that not all “use taxes for all purposes” can be deemed to be 

property taxes. See Mescalero, 411 U.S. at 158-59, 93 S. Ct. at 1275-76. The 

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necessary implication is that some use taxes, of which permanent improvements 

are but one, may be deemed so akin to property taxes that § 465 would bar their 

imposition.

Further, while the language of the Chehalis Reservation footnote suggests 

that the Ninth Circuit determined in Agua Caliente that § 465 did not bar taxes on 

non-Indian possessory interests of Indian land, the fact remains that neither Agua 

Caliente nor Fort Mojave ever analyzed the applicability of § 465 to the possessory 

interests being taxed.

10 Thus, even to the extent that a tax on the full-cash value of 

a lessee’s possessory interest can be viewed as analogous to a tax on the payment 

of rent, we do not find the Ninth Circuit’s bare statement in the Chehalis 

Reservation footnote that § 465 does not apply to taxes on such interests to be 

persuasive.

Diving more deeply into the Ninth Circuit cases similarly does not help 

Stranburg. Significantly, Agua Caliente was decided before Mescalero. In the 

absence of Mescalero, the Ninth Circuit likened California’s tax to the tax found 

permissible in United States v. City of Detroit, 355 U.S. 466, 78 S. Ct. 474 (1958), 

in which the Supreme Court upheld a state tax on the privilege of commercially 

renting property, even though the property in question was owned by the United 

 10 In fact, it is not entirely clear that the Indian land at issue in Fort Mojave or, especially, in 

Agua Caliente fell within the ambit of § 465 at all. See, e.g., Fort Mojave, 543 F.2d at 1255; 

Agua Caliente, 442 F.2d at 1187 & n.13.

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States. At the time that the cases were decided, the Supreme Court in City of 

Detroit and the Ninth Circuit in Agua Caliente both viewed a “tax imposed upon 

the use of property [as] something distinct from a tax imposed upon the property 

itself.” City of Detroit, 355 U.S. at 470, 78 S. Ct. at 476; Agua Caliente, 442 F.2d 

at 1186-87. 

But two problems exist with relying on these cases here. First, the Supreme 

Court’s subsequent decision in Mescalero expressly recognized that some uses are 

so intimately connected with the land that a tax on those uses is essentially a tax on 

the land, obliterating any categorical distinction between use taxes and property 

taxes. See Mescalero, 411 U.S. at 158, 93 S. Ct. at 1275-76. 

Second, City of Detroit is distinguishable in that the source of any tax 

exemption for the United States was the intergovernmental immunity doctrine, a 

doctrine that has been “‘thoroughly repudiated’ by modern case law.” See Cotton 

Petroleum, 490 U.S. at 174, 109 S. Ct. at 1706. Here, the source of the tax 

exemption is a federal statute. Section 465 contains an explicit congressional 

expression of a tax exemption, the contours of which must be interpreted like any 

other statute.

So we are not persuaded by Stranburg’s reliance on the Ninth Circuit’s cases 

involving California’s possessory-interest tax. Instead, we hold that § 465 bars 

Florida from assessing its Rental Tax against the Ark Entities. This construction of 

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the statute more closely comports with what the statutory text actually protects, 

with what the Supreme Court decided in Mescalero, with the purposes of § 465 

more generally, and with the general statutory canon that statutes be construed in 

favor of Indians. Accordingly, we affirm the district court’s order invalidating the 

application of Florida’s Rental Tax to the properties at issue in this case.

B. Federal Law Preempts the Rental Tax

We could, of course, stop our analysis regarding the Rental Tax at this point, 

since we have concluded that application of the Rental Tax in this case violates § 

465. But this case raises a matter of first impression, so we also consider the 

alternative basis that the district court relied on in invalidating the Rental Tax.

Even if § 465 did not expressly preclude assessment of the Rental Tax 

against the Ark Entities, the Rental Tax is nonetheless preempted by federal law.

The district court concluded that the state Rental Tax was preempted because the 

district court accorded “the full amount of deference available under the law” to a 

balancing test conducted by the Secretary of the Interior in promulgating 

regulations governing the leasing of Indian land—including a regulation that 

prohibits rental taxes. Seminole Tribe, 49 F. Supp. 3d at 1099-100. 

On appeal, Stranburg contests this ruling on a number of fronts. He 

contends that the Secretary’s analysis is entitled to no deference by any court

because, in Stranburg’s view, it does not purport to decide the preemption 

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question, it was the product of flawed rulemaking, and it is substantively incorrect. 

Stranburg also suggests that even if the regulations and analysis must be given 

weight, that weight should be minimal because the terms of the Ark Entities’ leases 

are controlling. And finally, Stranburg argues that he prevails on a de novo 

Bracker balancing analysis because the Tribe has not put forth any evidence of its 

interests while the state has demonstrated its interest in the Rental Tax based on the 

services it provides on the Tribe’s reservations. Although we decline to accord the 

regulations deference in conducting a Bracker inquiry, we nonetheless find that

under a de novo Bracker analysis, the Rental Tax is preempted by federal law.

In Bracker, the Supreme Court addressed a challenge to Arizona’s motorcarrier license and use fuel taxes as applied to non-Indian timber enterprises 

harvesting timber on reservation land. 448 U.S. at 137-38, 100 S. Ct. at 2580-81. 

The Court outlined several general Indian law taxation principles, including “two 

independent but related barriers to the assertion of state regulatory authority over 

tribal reservations and members. First, the exercise of such authority may be preempted by federal law. . . . Second, it may unlawfully infringe ‘on the right of 

reservation Indians to make their own laws and be ruled by them.’” Id. at 142, 100 

S. Ct. at 2583 (citations omitted). The Court also “rejected the proposition that in 

order to find a particular state law to have been preempted by operation of federal 

law, an express congressional statement to that effect is required.” Id. at 144, 100 

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S. Ct. at 2584. Of note, the Court commented that it is “generally unhelpful” to 

apply existing law regarding federal-state preemption to Indian law preemption. 

Id. at 143, 100 S. Ct. 2583. 

As the Court explained, state law is generally inapplicable to on-reservation 

conduct by Indians, given the overwhelming federal interest in encouraging tribal 

self-government. Id. at 144, 100 S. Ct. at 2584. To analyze the more difficult 

question of whether state regulation of non-Indian activity on the reservation is 

preempted by federal law, Bracker called for “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 federal law.” Id. at 144-45, 100 S. Ct. at 2584.

In turning to Arizona’s tax scheme, the Court first considered the federal 

interests at stake, observing that the “Federal Government’s regulation of the 

harvesting of Indian timber is comprehensive” and citing congressional statutes, 

Department of the Interior regulations, and day-to-day supervision by the BIA. Id.

at 145-48, 100 S. Ct. at 2584-86. Indeed, the Court stated, the “federal regulatory 

scheme is so pervasive as to preclude the additional burdens sought to be imposed” 

by the state taxes. Id. at 148, 100 S. Ct. at 2586. Moreover, the Court reasoned

that the state taxes would undermine federal policies of guaranteeing the benefit of 

timber harvests to Indians, as well as general policies designed to revitalize Indian 

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economies and self-government. Id. at 149, 100 S. Ct. 2586. For instance, the 

Court determined that the taxes would complicate the Secretary’s setting of fees, 

reduce tribal revenues, and diminish the profit that potential contractors could 

realize. Id. at 149, 100 S. Ct. at 2587.

With regard to the state’s interest, the Court found none beyond a “general 

desire to raise revenue.” Id. at 150, 100 S. Ct. at 2587. Nor, as the Court 

observed, was this “a case in which the State seeks to assess taxes in return for 

governmental functions it performs for those on whom the taxes fall.” Id., 100 S. 

Ct. at 2587. Even though the fuel tax was designed to compensate the state for the 

use of its highways, the on-reservation roads at issue were neither built nor 

maintained by the state. Id. As a result, the Court concluded that the state’s 

generalized interest was insufficient to overcome the comprehensive and pervasive 

regulation of the harvesting of Indian timber and the threats to federal policies 

posed by the taxes. See id. at 151, 100 S. Ct. at 2588.

Two years later, the Court decided Ramah Navajo School Board v. Bureau 

of Revenue, 458 U.S. 832, 102 S. Ct. 3394 (1982). In Ramah, the Court struck 

down New Mexico’s gross-receipts tax as assessed on a non-Indian contractor who 

built a school on the reservation. Id. at 834, 102 S. Ct. at 3396. The Court found 

the tax preempted, in part, because the state did “not seek to assess its tax in return 

for the governmental functions it provides to those who must bear the burden of 

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paying this tax.” Id. at 843, 102 S. Ct. at 3401. While the New Mexico tax was 

“intended to compensate the State for granting ‘the privilege of engaging in 

business,’” the state had “not explained the source of its power to levy such a tax . . 

. where the ‘privilege of doing business’ on an Indian reservation is exclusively 

bestowed by the Federal Government.” Id. at 844, 102 S. Ct. at 3402.

The Supreme Court once again applied the Bracker balancing test in Cotton 

Petroleum, this time upholding the state tax. In so doing, the Court emphasized 

that the test is a “flexible one sensitive to the particular state, federal, and tribal 

interests involved.” Cotton Petroleum, 490 U.S. at 184, 109 S. Ct. at 1711. In 

contrasting Cotton Petroleum’s situation with those found in Bracker and Ramah, 

the Court observed that those two cases “involved complete abdication or 

noninvolvement of the State in the on-reservation activity,” while in Cotton 

Petroleum, New Mexico provided “substantial services” to Cotton Petroleum and 

the tribe. Id. at 185, 109 S. Ct. at 1712. The Court further distinguished Cotton 

Petroleum’s situation by finding that no economic burden fell on the tribe due to 

the state taxes and that the state did regulate “the spacing and mechanical integrity 

of [oil] wells located on the reservation,” meaning the federal regulations of 

mineral extraction, while extensive, were not exclusive. Id. at 185-86, 109 S. Ct. at 

1712. As a result, the Court concluded that the state taxes were not preempted, in 

part, because “[t]his [was] not a case in which the State has had nothing to do with 

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the on-reservation activity, save tax it.” Id. at 186, 109 S. Ct. at 1713. The Court 

also noted that any marginal effect on the demand for leases that could be 

attributed to increased state taxes was “simply too indirect and too insubstantial to 

support Cotton’s claim of pre-emption . . . absent some special factor as those 

present [in Bracker and Ramah].” Id. at 186-87, 109 S. Ct. at 1713.

To summarize, then, Bracker requires a particularized inquiry into the 

federal, tribal, and state interests implicated by a state’s tax on non-Indians for onreservation activity. Bracker, 448 U.S. at 144-45, 100 S. Ct. at 2584. Federal 

statutes, agency regulations, and day-to-day agency supervision can all inform the 

federal and tribal interests and can also signal a federal regulatory scheme that is so 

pervasive that it preempts the state tax. Id. at 145-48, 100 S. Ct. at 2584-86. A 

state’s interests in a particular tax can outweigh federal and tribal interests, but to 

do so, the state’s tax must relate to services it provides in connection with the 

entity and activity being taxed and not merely serve a generalized interest in 

raising revenue. Id. at 150-51, 100 S. Ct. at 2587-88.

1. Should the Secretary’s Analysis Be Accorded Deference?

Before turning to the merits of the Bracker analysis, we must first address 

what measure of deference, if any, courts should accord to the Secretary of the 

Interior’s Bracker-like balancing conducted in the regulatory context. The issue 

arises because the Secretary of the Interior adopted substantial regulations, made 

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effective in January 2013, concerning the Secretary’s approval and supervision of 

Indian land leases. See 25 C.F.R. Part 162. Included among those regulations is a 

section entitled “What taxes apply to leases approved under this part?” 25 C.F.R. § 

162.017. That section expressly provides that “activities under a lease conducted 

on the leased premises” are not subject to state taxation, id. § 162.017(b), and that 

“the leasehold or possessory interest” is not subject to state taxation, id. § 

162.017(c). 

According to the regulations’ preamble published in the Federal Register, 

this section was added as “clarification regarding other taxation arising in the 

context of leasing Indian land.” Residential, Business, and Wind and Solar 

Resource Leases on Indian Land, 77 Fed. Reg. 72,440, 72,447 (Dec. 5, 2012) 

(codified at 25 C.F.R. pt. 162) (“Preamble”). In this Preamble, the Secretary 

outlined the Bracker balancing test and then applied it generally. 

First, the Secretary listed the extensive federal regulations that it said 

“occupy and preempt the field of Indian leasing.” Id. at 72,447. The Secretary 

also analyzed the federal and tribal policies at stake in land leasing and noted that 

the “ability of a tribe . . . to convey an interest in trust or restricted land arises 

under Federal law, not State law [and] Federal legislation has left the State with no 

duties or responsibilities for such interest.” Id. at 72,447-48. Finally, the Secretary 

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asserted generally that state taxation undermines federal interests with respect to 

leases. Id. at 72,447-49.

The district court concluded that the regulations, including the Secretary’s 

Bracker analysis in the Preamble, were entitled to the “full amount of deference 

available under the law,” which it defined as “some deference” short of full 

Chevron11 deference. Seminole Tribe, 49 F. Supp. 3d at 1099-100. Relying on 

Wyeth v. Levine, 555 U.S. 555, 129 S. Ct. 1187 (2009), the district court reasoned 

that deference was appropriate based on the specialized experience of the Secretary 

in Indian affairs, the complex and extensive history of federal Indian law, and the 

thoroughness and persuasiveness of the Secretary’s analysis. 49 F. Supp. 3d at 

1099-100. Ultimately, the district court held, based on “the reasons detailed by the 

Secretary of the Interior,” that federal regulation of Indian land leasing was so 

pervasive as to preclude the additional burdens of Florida’s Rental Tax and that, 

“in these circumstances, 25 U.S.C. § 415 and 25 C.F.R. § 162.017 prohibit the 

imposition of the Rental Tax to the Ark leases.” Id. at 1100.

We agree with the district court’s ultimate conclusion. But to the extent that 

the district court gave deference to the Secretary’s ultimate application of Bracker

and the agency’s conclusion that federal law preempts lease-related taxation, we 

find that the district court went a step too far. Bracker and its progeny call for a 

 11 Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 

(1984).

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particularized balancing of the specific federal, tribal, and state interests involved. 

See Bracker, 448 U.S. at 145, 100 S. Ct. 2584 (“This inquiry . . . has called for 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 federal law.” (emphasis added)); Ramah, 

458 U.S. at 838, 102 S. Ct. at 3398 (“Pre-emption analysis . . . requires a 

particularized examination of the relevant state, federal, and tribal interests.” 

(emphasis added)); Cotton Petroleum, 490 U.S. at 176, 109 S. Ct. at 1707 

(“Instead, we have applied a flexible pre-emption analysis sensitive to the 

particular facts and legislation involved.” (emphasis added)). Because the 

Secretary’s analysis did not examine Florida’s interests in imposing this particular 

Rental Tax, the balancing in the Preamble cannot substitute for the particularized 

inquiry required by Bracker. As for Wyeth, although it dealt with preemption 

outside the context of federal Indian law, that decision observed that while some 

weight can be given to an agency’s views on a state law’s impact on a federal 

regulatory scheme, deference to an agency’s ultimate conclusion of federal 

preemption is inappropriate. See Wyeth, 555 U.S. at 576-77, 129 S. Ct. at 1201.

2. The Federal and Tribal Interests at Stake

This is not to say that the Secretary’s analysis is not without value in 

delineating the federal and tribal interests implicated in the leasing of Indian land. 

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As Wyeth noted, an agency’s analysis of the regulatory scheme it administers 

deserves some weight, particularly when the subject matter and history are 

complex and extensive, and the analysis is thorough, consistent, and persuasive. 

555 U.S. at 576-77, 129 S. Ct. at 1201. Here, those factors apply with force. 

Accordingly, the Preamble analysis and the actual statutes and regulations 

themselves provide, in this case, substantial evidence of the extensive federal 

regulation of Indian land leasing to inform the Bracker balancing inquiry.

Stranburg raises a number of specific arguments about why deference is 

inappropriate, but none of those arguments succeed in showing why the 

Secretary’s analysis cannot serve as evidence of the federal and tribal interests 

involved. Because we have determined that deference to the Secretary’s 

preemption conclusion is inappropriate and will conduct an independent Bracker

inquiry, we need not address Stranburg’s deference arguments in further depth. 

Although we cannot defer to the Secretary’s ultimate conclusion that federal 

law preempts the Rental Tax, we nonetheless agree that is the correct conclusion. 

As in the cases of Bracker and Ramah, the extensive and exclusive federal 

regulation of Indian leasing—as evidenced by federal law and regulations—

precludes the imposition of state taxes on that activity. See Bracker, 448 U.S. at 

148-49, 100 S. Ct. at 2586; Ramah, 458 U.S. at 841-42, 102 S. Ct. at 3400-01; see 

also, e.g., 25 U.S.C. § 415; 25 C.F.R. Part 162; Preamble at 72,447-48. Florida has 

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not shown that the Rental Tax is designed to compensate for any state services or 

regulations related to the act of renting of commercial property on Indian land; 

rather, the interests the state advances are more akin to raising revenue for 

providing statewide services generally. Accordingly, the Bracker analysis leads us 

to conclude that Florida’s Rental Tax is preempted by federal law.

Nor are we persuaded by Stranburg’s various arguments that the inquiry 

should tip in his favor. Initially, he attacks the pervasive character of the federal 

regulatory scheme, asserting that Cotton Petroleum established that regulation of 

all lessees of Indian land is not exclusively federal. See Cotton Petroleum, 109 S. 

Ct. at 185-86, 109 S. Ct. at 1712-13 (holding that the state’s regulation of oil-well 

spacing and integrity meant that federal regulation, while extensive, was not 

exclusive). In support of this point, Stranburg contends that the oil and gas leases 

in Cotton Petroleum were subject to the same federal regulations that govern the 

Ark Entities’ leases, and since federal regulation was not deemed exclusive in 

Cotton Petroleum, it cannot be deemed exclusive here. 

This argument fails, though, for a number of reasons. First, Bracker requires 

a particularized balancing of specific interests. In Cotton Petroleum, the Supreme 

Court pointed to state regulation of oil wells independent of the federal regulations. 

Stranburg, however, has not pointed to any Florida regulation of the commercial 

leasing of Indian land or regulation of the activities occurring under the lease.

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Second, the federal regulations concerning Indian oil leases are separate and 

distinct from the Indian surface land-leasing regulations. See 25 C.F.R. § 

162.006(b) (noting that this part of the regulations does not apply to “mineral 

leases, prospecting permits, or mineral development agreements,” which are 

covered by six separate parts of the Code of Federal Regulations). The regulations 

cited in Cotton Petroleum came from Part 211 of the Code, one of the mineralleasing parts. See 490 U.S. at 186 n.16, 109 S. Ct. at 1712 n.16. Significantly, 

they were not found in Part 162, the surface-leasing regulations. 

Similarly, Stranburg’s reliance here on the case of Gila River Indian 

Community v. Waddell, 91 F.3d 1232 (9th Cir. 1996), cannot help him. Contrary 

to Stranburg’s suggestion, Waddell did not make a broad pronouncement that the 

federal leasing regulations were insufficient to preempt all state taxes. Instead, the 

court found the leasing interests insufficient to preempt a state sales tax on nonIndians’ attendance at entertainment events on the reservation. See 91 F.3d at 1237 

(“The Arizona sales tax would not interfere with the use and development of the 

Tribe’s property. Thus, the regulatory scheme that governs the leasing of Indian 

lands does not require the preemption of the tax.”).12

 12 Of note, Waddell did reject the Indians’ position that the federal leasing regulations were 

sufficient to preempt all state taxation generally. 91 F.3d at 1237. Of course, this just means that 

we are left with a particularized balancing of the leasing interests and the specific tax at issue.

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Stranburg next remarks that the federal interest in promoting Indian 

economic development does not automatically preempt all state taxes when any 

reduction of Indian income is threatened. This proposition certainly is true. See 

Cotton Petroleum, 490 U.S. at 180, 109 S. Ct. at 1709 (“We thus agree that a 

purpose of the 1938 Act is to provide Indian tribes with badly needed revenue, but 

find no evidence for the further supposition that Congress intended to remove all 

barriers to profit maximization.”); id. at 187, 109 S. Ct. at 1713 (rejecting the 

notion that “[a]ny adverse effect on the Tribe’s finances caused by the taxation of a 

private party contracting with the Tribe would be ground to strike the state tax.”). 

But this argument goes only so far because the Tribe is not contending that the sole 

federal interest at stake here is income maximization or that income maximization

automatically preempts any state taxation. Rather, Indian economic well-being is 

one of the many federal interests embodied in the extensive federal regulation of 

leasing activity, and it is a valid interest weighing in favor of preemption in the 

final balance. See Bracker, 448 U.S. at 149, 100 S. Ct. at 2586.

Stranburg further asserts that tribal interest in self-government is not 

threatened by dual state taxation. But while the Supreme Court precedent seems 

clear that dual taxation does not threaten tribal interests, see Wagnon v. Prairie 

Band Potawatomi Nation, 546 U.S. 95, 114-15, 126 S. Ct. 676, 688-89 (2005), that 

fact is of limited utility here because the Tribe is not assessing its own rental tax 

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(or even arguing on appeal that the state tax precludes it from doing so). So though 

the Preamble’s general statements expressing concern about the potential of state 

taxes to “chill” the imposition of tribal taxes cannot support a federal or tribal 

interest in avoiding dual taxation, Preamble at 72,448, that fact removes little 

weight from the Tribe’s side of the scale here under the particularized 

circumstances of this case. 

Finally, in a variation on the income-maximization argument, Stranburg 

asserts that any increase in costs for on-reservation projects attributable to the state 

tax is too indirect for the economic consequences of the tax to support preemption. 

Of course, it is true that Cotton Petroleum held that such indirect burdens were 

insufficient to support preemption. 490 U.S. at 186-87, 109 S. Ct. at 1713. But 

Cotton Petroleum indicated that such indirect burdens were insufficient “absent 

some special factor such as those present in [Bracker and Ramah],” with that

special factor necessarily being the extensive and exclusive federal regulation of 

the activities at issue in those two cases. See id.; see also id. at 184-86, 109 S. Ct. 

at 1711-1713; see also Bracker, 448 U.S. at 151 & n.15, 100 S. Ct. at 2587-88 & 

n.15. As in Bracker and Ramah, the Tribe is not relying solely on adverse 

economic impact here; the extensive and exclusive federal regulation of Indian 

land leasing provides the “special factor” absent in Cotton Petroleum.

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In sum, the federal government administers an extensive, exclusive, 

comprehensive, and pervasive regulatory framework governing the leasing of 

Indian land. Stranburg’s attempt to diminish the value of tribal economic and 

taxing interests does nothing to minimize the pervasiveness of the federal 

regulatory scheme, which involves dozens of congressional statutes and federal 

regulations. See, e.g., 25 U.S.C. §§ 415 – 416j; 25 C.F.R. §§ 162.001 – 162.703. 

This scheme is sufficient to bring the federal interests within the scope of Bracker

and Ramah, where “the federal regulatory scheme is so pervasive as to preclude 

the additional burdens sought to be imposed” by the state. Bracker, 448 U.S. at 

148, 100 S. Ct. at 2586; Ramah, 458 U.S. at 845, 102 S. Ct. at 3402. Accordingly, 

absent a state interest of sufficient weight—and raising revenue for providing 

statewide services generally lacks that heft—Florida’s Rental Tax is preempted. 

See, e.g., Bracker, 448 U.S. at 148-151, 100 S. Ct. at 2587-88 (conducting an 

analysis of the state interests after finding the federal scheme was pervasive).

Stranburg cannot alter the results of this analysis through his assertions that 

the Tribe did not meet its burden13 of producing any evidence on the federal and 

 13 The parties vigorously dispute who bears the “burden” in this case. Stranburg contends

that the Tribe has the “burden of proof . . . to put forth facts showing that federal and tribal 

interests outweighed the state’s interest.” The Tribe fires back that the “burden of justifying the 

tax in these circumstances rests with the state.” But the Bracker inquiry itself imposes no 

burden-shifting framework. Any burden necessarily arises from the summary-judgment posture 

of the case. Since both parties moved for summary judgment, each had the burden of 

demonstrating no dispute of material fact that its interests outweighed the other’s as a matter of 

law. See generally Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986) 

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tribal interests at stake because it “introduced no record evidence whatsoever of the 

impact of the Rental tax on the Tribe’s business operations or its sovereignty.” In 

Stranburg’s view, the Tribe was required to put forth evidence that “it was less able 

to lease the property, had to engage in unique marketing efforts, or had to reduce 

the rent to accommodate the tax.” According to Stranburg, the Tribe’s reliance on 

generalized economic arguments is insufficient to support preemption after Cotton 

Petroleum rejected the indirect-economic-consequences argument. As discussed 

above, though, the Supreme Court’s rejection of that argument matters only in the 

absence of an extensive and exclusive federal regulatory scheme. While such 

specific economic evidence certainly would have bolstered the Tribe’s argument, 

the regulatory scheme itself is a sufficient federal interest to satisfy the Tribe’s 

burden of production here.

3. The State’s Interest at Stake

To establish the state’s interest in imposing the Rental Tax, Stranburg points 

to the evidence he introduced of the services that the state provides on the 

reservation, including law enforcement, criminal prosecution, and health services, 

as well as “intangible off-reservation benefits . . . such as infrastructure and 

 

(“Of course, a party seeking summary judgment always bears the initial responsibility of 

informing the district court of the basis for its motion, and identifying those portions of ‘the 

pleadings, depositions, answers to interrogatories, and admissions on file, together with the 

affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” 

(citation omitted)).

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39

transportation services.” But none of these services are tied to the business of 

renting commercial property on Indian land. Both Bracker and Ramah note that 

the state tax must be sufficiently connected to the particular activity taxed to 

amount to more than just a generalized interest in raising revenue. See Bracker, 

448 U.S. at 150-51, 100 S. Ct. at 2587-88 (“[T]his is not a case in which the State 

seeks to assess taxes in return for government functions it performs for those on 

whom the taxes fall. Nor have respondents been able to identify a legitimate 

regulatory interest served by the taxes they seek to impose.”); Ramah, 458 U.S. at 

843-45 & n.10, 102 S. Ct. at 3401-3402 & n.10 (“We are similarly unpersuaded by 

the State’s argument that the significant services it provides to the Ramah Navajo 

Indians justify the imposition of this tax. The State does not suggest that these 

benefits are in any way related to the construction of schools on Indian land.”). 

Even Cotton Petroleum, while finding that some state services were 

provided to the plaintiff and tribe, affirmed the general principle that the services 

rendered must be connected to the tax. See 490 U.S. at 185, 109 S. Ct. at 1712 

(“Rather, [Bracker and Ramah] involved complete abdication or noninvolvement 

of the State in the on-reservation activity.” (emphasis added)); cf. id. at 186, 109 S. 

Ct. at 1713 (“This is not a case in which the State has had nothing to do with the 

on-reservation activity, save tax it.” (emphasis added)). Here, Stranburg has 

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offered no evidence that Florida is involved in any way with a non-Indian’s leasing 

of commercial property from an Indian tribe on Indian land except taxing it.

Nor can Stranburg’s reliance on Waddell rescue the state’s interest from 

being insufficient to sustain the tax. The relationship of the services provided to 

the interest taxed differed materially in Waddell. In Waddell, the Ninth Circuit 

concluded that the provision of the law-enforcement services, including crowd and 

traffic control, “was critical to the success” of the specific entertainment events 

being taxed. Waddell, 91 F.3d at 1238-39. Stranburg has not shown a similar link 

here. 

Stranburg also cites Ute Mountain Ute Tribe v. Rodriguez, 660 F.3d 1177, 

1199-1200 (10th Cir. 2011), for the proposition that off-reservation services can 

support a state interest. But Ute Mountain addressed New Mexico’s oil and gas 

taxes and found that they supported “the off-reservation infrastructure used to 

transport the oil and gas after it is severed.” Id. at 1199. 

In both of these cases, the tax was clearly and critically connected to the 

services rendered. While the dollar value of services rendered need not match the 

amount of taxes paid, Cotton Petroleum, 490 U.S. at 185, 109 S. Ct. at 1712, the 

services and taxes nonetheless must be connected beyond a mere desire to raise 

revenue. Although the presence of law enforcement or off-reservation roads in 

some sense makes leasing on-reservation property more attractive, none of the 

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services cited by Stranburg is critically connected to the business of commercial 

land leasing on Indian property—the activity taxed by the Rental Tax—in the way 

that crowd and traffic control was to entertainment events in Waddell and the use 

of off-reservation roads was to the transportation of oil and gas from Indian lands 

in Ute Mountain.

In conclusion, we do not defer to the Secretary’s ultimate determination of 

federal preemption because Bracker and its progeny require a particularized, casespecific balancing of federal, tribal, and state interests. Nevertheless, Florida’s 

Rental Tax is preempted by federal law under Bracker. Federal statutes, 

regulations, and even the analysis conducted by the Secretary’s Preamble 

demonstrate the pervasive and comprehensive federal regulation of the leasing of 

Indian land. The State of Florida has not shown any state interest in its Rental Tax 

beyond the general raising of revenue to provide generalized services nor has it 

pointed to any state regulation of Indian-land leasing that would render the federal 

regulations nonexclusive. Consequently, the pervasive federal scheme for 

regulating Indian land leasing preempts Florida’s Rental Tax just as the federal 

schemes regulating timber and education preempted the state taxes in Bracker and 

Ramah.

14 

 14 Stranburg also argues that federal law cannot preempt the Rental Tax as applied to the 

Ark Entities because the Ark Entities purportedly agreed in their leases to pay all taxes levied. 

This argument is based on a “grandfather” clause in the federal leasing regulations that provides, 

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C. Does Comity Require Dismissal of the Rental Tax Challenge?

Stranburg concludes his attack on the district court’s Rental Tax ruling by

renewing his argument that the district court should have abstained from reaching 

the merits of the Rental Tax issue in the first place. He mentions in passing that 

the Tribe “should not be able to create an end-run around” the Tax Injunction Act, 

28 U.S.C. § 1341—which would preclude the Ark Entities from bringing a similar 

federal suit. To the extent that Stranburg is raising a Tax Injunction Act argument 

against the Tribe on appeal, the argument is foreclosed by Supreme Court 

precedent. See Moe v. Confederated Salish & Kootenai Tribes of Flathead 

Reservation, 425 U.S. 463, 472-75, 96 S. Ct. 1634, 1640-42 (1976) (holding that 

Indian tribes can challenge state taxation in federal court despite the prohibitions of 

the Tax Injunction Act); see also Osceola v. Fla. Dep’t of Revenue, 893 F.2d 1231, 

1234 (11th Cir. 1990). Primarily, though, Stranburg argues that “principles of 

comity weigh against allowing the Rental Tax claims to proceed.”

 

“If we approved your lease document before January 4, 2013, this part applies to that lease 

document; however, if the provisions of the lease document conflict with this part, the provisions 

of the lease govern.” 25 C.F.R. § 162.008(a). Because the Secretary approved the Ark Entities’ 

leases prior to January 4, 2013, Stranburg contends that the lease provisions should prevail. But 

there are two problems with Stranburg’s argument. First, the lease never specifies that the Ark 

Entities will pay the Rental Tax. Instead, the lease applies only to taxes generally, so there is no 

plausible argument that the parties expressly agreed to pay the Rental Tax in the lease or that the 

lease even conflicts with the federal regulations. But more significantly, if Congress intended for

federal law to preempt the Rental Tax, the state lacks authority to levy the tax in the first place. 

See Cotton Petroleum, 490 U.S. at 175-76, 109 S. Ct. at 1707. Despite Stranburg’s assertions to 

the contrary, this logic is not “circular” because the state’s authority to levy the tax does not 

depend on whether the Ark Entities agreed to pay it in the lease, but rather on whether Congress 

has acted expressly or impliedly to preempt the tax.

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This issue was raised and rejected at the motion-to-dismiss stage. Stranburg 

did not renew the comity argument at the summary-judgment stage. More 

significantly, Stranburg did not include the district court’s ruling on the motion to 

dismiss in his Notice of Appeal, which mentioned just the final judgment order and 

the summary-judgment order as the rulings appealed. 

This Court has determined that it lacks jurisdiction to consider an appeal of 

an order not specifically mentioned in the appellant’s Notice of Appeal. See 

Osterneck v. E.T. Barwick Indus., Inc., 825 F.2d 1521, 1528-29 (11th Cir. 1987); 

Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1374-75 (11th Cir. 1983). “We have 

previously concluded that, where some portions of a judgment and some orders are 

expressly made a part of the appeal, we must infer that the appellant did not intend 

to appeal other unmentioned orders or judgments.” Osterneck, 825 F.2d at 1529. 

By the terms of our precedent and under our continuing obligation to examine 

jurisdiction at every stage of the proceeding, id. at 1525 n.5, we conclude that we 

do not have jurisdiction to address Stranburg’s appeal of the district court’s order 

rejecting the comity argument.

But even if no jurisdictional bar existed, we find that the district court did 

not abuse its discretion when it declined to dismiss the federal suit on comity 

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grounds. In the district court, Stranburg primarily invoked Younger abstention,

15

but on appeal, he instead relies heavily on Levin v. Commerce Energy, Inc., 560 

U.S. 413, 130 S. Ct. 2323 (2010), a case focused more on the comity doctrine in 

the context of federal challenges to state tax statutes. 

In Levin, the Supreme Court decided that a federal court should decline a 

constitutional challenge to allegedly discriminatory state tax exemptions when an 

adequate state-court forum is available to decide the challenge. 560 U.S. at 421, 

130 S. Ct. at 2330. In reaching this conclusion, the Supreme Court relied on a 

unique confluence of factors: the plaintiff sought federal-court review of 

commercial matters over which the state had wide regulatory authority; the suit did 

not involve fundamental rights or heightened judicial scrutiny; the plaintiffs were 

essentially seeking to improve their own economic position in relation to other 

private parties; and, the state courts were more familiar with the state legislative 

preferences at stake and were not hampered in the type of remedies they could 

administer, unlike federal courts constrained by the Tax Injunction Act. Id. at 431-

 15 Younger abstention is a judicial doctrine, named for Younger v. Harris, 401 U.S. 37, 91 

S. Ct. 746 (1971), where the Supreme Court recognized a limited exception to a federal court’s 

“virtually unflagging obligation” to exercise its jurisdiction when “extraordinary circumstances” 

counsel abstention in favor of pending state proceedings. See For Your Eyes Alone, Inc. v. City 

of Columbus, 281 F.3d 1209, 1215-16 (11th Cir. 2002). Younger itself dealt only with attempts 

to restrain pending state criminal prosecutions, but the doctrine has been expanded to state civil 

proceedings akin to criminal prosecutions or proceedings to enforce state-court judgments. See 

Sprint Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584, 588 (2013). Nevertheless, the Supreme Court 

has emphasized that circumstances warranting Younger abstention are “exceptional,” and the 

mere pendency of parallel state proceedings is not itself a bar to federal court litigation. See id.

at 588, 593-94. None of the exceptional circumstances warranting Younger abstention exist here.

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32; 130 S. Ct. at 2336. On appeal, Stranburg asserts generally that the same 

considerations motivating abstention in Levin apply here. 

Stranburg acknowledges that the Supreme Court has not had occasion to 

consider Levin in the context of federal Indian law, and he admits that the Second 

Circuit has rejected dismissal on comity grounds when an Indian tribe challenges 

state taxation. In Mashantucket Pequot Tribe v. Town of Ledyard, 722 F.3d 457, 

465-66 (2d Cir. 2013), the Second Circuit concluded that two factors counseled 

against applying Levin’s comity analysis in an Indian case: a strong federal 

interest in determining the contours of a pervasive federal regulatory scheme, 

particularly when Congress has favored a federal forum for Indians to vindicate 

federal rights, and the observed fact that federal courts regularly entertain tribal 

challenges to state taxation. Id. at 466. The Second Circuit also noted that 

dismissal of the tribe’s state-tax challenge on comity grounds would have been the 

first such dismissal of an Indian tribe’s challenge by a federal court ever. See id. at 

466 n.7. These factors similarly counsel against dismissal on comity grounds here.

Stranburg tries to distinguish Mashantucket by pointing out that there, the 

state-court action was filed two years after the federal action, whereas here, the 

state action was filed just two days after the federal action. But Mashantucket 

acknowledged only that the state-court proceedings would have merited greater 

deference if they had been filed before the federal proceedings. 722 F.3d at 466 

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n.6. In any event, the two factors counseling against a comity dismissal in 

Mashantucket do not turn on the filing date of related state-court proceedings.

Beyond the factors in Mashantucket, this case presents other facts that 

distinguish it from Levin. First, the key legal issue here does not involve 

interpretation of state law, but rather interpretation of federal Indian law, federal 

statutes, and federal preemption. Little reason exists to believe that a federal court 

would be less suited than a state court to adjudicate these issues. Second, unlike in 

Levin, the Tax Injunction Act would not preclude or constrain any federal remedies 

because the plaintiff here is an Indian Tribe. In light of these circumstances, the 

district court did not abuse its discretion in declining to dismiss the Tribe’s Rental

Tax claim on comity grounds.

IV. Florida’s Gross-Receipts Utility Tax

Stranburg contends on appeal that the district court also erred in finding that 

the legal incidence of Florida’s Gross-Receipts Utility Tax falls on the Tribe. 

After careful consideration of the Florida tax scheme, we agree with Stranburg and 

hold that the legal incidence of the tax falls on the non-Indian utility company. 

Although the district court did not conduct an alternative Bracker inquiry for the 

Utility Tax, we also find that the Tribe has not established as a matter of law that

federal law preempts the Utility Tax.

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A. Legal Incidence

The district court concluded that the legal incidence of Florida’s GrossReceipts Utility Tax fell on the Tribe. Seminole Tribe, 49 F. Supp. 3d at 1103-08. 

Relying on Oklahoma Tax Commission v. Chickasaw Nation, 515 U.S. 450, 115 S. 

Ct. 2214 (1995), the district court determined that the Utility Tax was categorically 

barred as an “impermissible direct tax upon the Seminole Tribe on its reservation.” 

Id. at 1108. While both parties’ positions have some merit, following a de novo

review, we conclude that the district court’s legal-incidence determination is not 

the “fair[est]” reading of the Florida taxing scheme, Chickasaw Nation, 515 U.S. at 

461, 115 S. Ct. at 2221, so we find that the district court erred in placing the legal 

incidence on the Tribe.

1. Chickasaw Nation and the Legal Incidence Inquiry

In Chickasaw Nation, the Supreme Court considered a tribal challenge to

Oklahoma’s fuel excise tax.

16 515 U.S. at 452-53, 115 S. Ct. at 2217. The tribe 

contended that Oklahoma’s tax fell on the tribe, as retailer of gasoline at its onreservation convenience stores. Id. at 455, 115 S. Ct. at 2218-19. The state 

countered that its tax did not fall upon retailers (and therefore upon the tribe), but 

rather on the fuel distributors or fuel consumers. Id. at 456, 461-62, 115 S. Ct. at 

 16 The Chickasaw Nation Court also considered the validity of Oklahoma’s income tax, but 

that discussion is not relevant to our analysis here. See 515 U.S. at 462-67, 115 S. Ct. at 2222-

24.

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2219, 2221-22. Because the tax did not fall on the tribe, the state argued, its 

interest in imposing the tax outweighed any incompatible federal or tribal interests. 

See id.

The Supreme Court first recalled that, generally, a state may not levy a tax 

on an Indian tribe or its members for on-reservation activities. Id. at 458, 115 S. 

Ct. at 2220. In the Court’s view, “[t]he initial and frequently dispositive question 

in Indian tax cases, therefore, is who bears the legal incidence of a tax.” Id.

(emphasis added). The Court specifically rejected a test that would focus on 

economic realities, finding that legal incidence provided a predictable and certain 

test for state taxing authorities. Id. at 459-60, 115 S. Ct at 2221. In doing so, the 

Court conceded that it would be easy for the state to amend its law and shift the 

legal incidence by simply “declaring the tax to fall on the consumer and directing 

the Tribe to collect and remit the levy.” Id. at 460, 115 S. Ct. at 2221 (internal 

quotation marks omitted).

As a result, the legal incidence of a tax is a question of state law. See id. at 

460-61, 115 S. Ct. at 2221. A clear declaration of legal incidence or a mandatory 

“pass through” provision requiring a tax to be passed on to the consumer is 

“dispositive language” of legal incidence. See id. at 461, 115 S. Ct. at 2221. But 

“[i]n the absence of such dispositive language, the question is one of ‘fair 

interpretation of the taxing statute as written and applied.’” Id. (quoting Cal. Bd. 

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of Equalization v. Chemehuevi Tribe, 474 U.S. 9, 11, 106 S. Ct. 289, 290 (1985) 

(per curiam)).

Because the Oklahoma statute did not contain dispositive language, the 

Court analyzed several factors in concluding that the legal incidence of the fuel tax 

fell on the tribal retailers. First, the Court observed that the statutory language 

required the distributor to remit the tax due “on behalf of a licensed retailer.” Id. at 

461, 115 S. Ct. at 2221-22 (emphasis omitted). Second, the Court took into 

account the fact that the tax was not imposed on sales between distributors, but was 

imposed on sales from a distributor to a retailer. Id. at 461, 115 S. Ct. at 2222. 

Third, the Court noted the distributor’s ability under the law to deduct any 

subsequently uncollected amount of tax previously paid. Id. And fourth, the fact 

that the distributor was able to retain a small portion of the tax as compensation for 

serving as the state’s tax collector also pointed towards the determination that the 

legal incidence of the fuel tax fell on the tribal retailers. Id. at 462, 115 S. Ct. at 

2222. In view of these circumstances, the Court determined that the distributor 

served as merely a “transmittal agent” for taxes imposed on the retailer. Id. at 462, 

115 S. Ct. at 2222. The lack of any similar statutory language regarding the 

relationship between retailers and consumers, the Court concluded, meant that the 

tax was legally imposed on the retailer. Id.

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2. The Legal Incidence of Florida’s Utility Tax Falls on the Utility Company

Florida imposes a tax on the “gross receipts from utility services that are 

delivered to a retail consumer” in Florida. See Fla. Stat. § 203.01(1)(a)(1) (2012). 

In evaluating where the legal incidence of this tax falls, we consider the framework 

and language of the statute.

The statute, which is contained in Chapter 203 of the Florida Statutes—a 

chapter devoted exclusively to gross-receipts taxes (as opposed to, for example, 

sales or property taxes)—explains that the “tax is imposed upon every person for 

the privilege of conducting a utility or communications services business, and each 

provider of the taxable services remains fully and completely liable for the tax, 

even if the tax is separately stated as a line item or component of the total bill.” Id.

§ 203.01(5) (emphasis added). Florida’s administrative regulations similarly 

provide that the Utility Tax “is imposed on the privilege of doing business, and it is 

an item of cost to the distribution company,” who “remains fully and completely 

liable for the payment of the tax, even when the tax is wholly or partially 

separately itemized on the customer’s bill.” Fla. Admin. Code R. 12B6.0015(3)(a) (emphasis added). While none of this language represents a 

“dispositive statement” of legal incidence, we find that it points strongly towards a 

legislative intent to impose the tax on utility companies.

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In determining that the legal incidence of Florida’s Utility Tax fell on the 

consumer Tribe, the district court relied on § 203.01(4), Fla. Stat., to conclude that 

“[e]very consumer is required to ‘remit the tax’ to the utility company as part of 

the total bill.” Seminole Tribe, 49 F. Supp. 3d at 1104. On appeal, the Tribe 

similarly invokes § 203.01(4) in an effort to show that the legislature intended to 

require the Utility Tax to be passed through to the consumer. But this provision of 

the statute applies only when the utility service provider has elected to itemize the 

tax separately on its bills—a choice completely left to the discretion of the service 

provider. See Fla. Stat. § 203.01(4) (“The tax imposed pursuant to this chapter 

relating to the provision of any utility services at the option of the person 

supplying the taxable services may be separately stated . . . . Whenever a provider 

of taxable services elects to separately state such tax as a component of the charge 

for the provision of such taxable services, every person, including all governmental 

units, shall remit the tax to the person who provides such taxable services as a part 

of the total bill . . . .” (emphasis added)). 

Although an itemized amount of the Utility Tax becomes a component of the 

consumer’s bill that is, in a sense, transmitted by the utility to the state once 

collected, it is key in our view that nothing about this section requires a utility

provider ever to itemize the tax. Ultimately, then, there is no requirement from the 

legislature to pass the tax through to the consumer, and it is the requirement that 

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matters. See Chickasaw Nation, 515 U.S. at 459-60, 115 S. Ct. at 2221 (rejecting 

an “economic realities” inquiry into, among other things, “how completely retailers 

can pass along tax increases”); id. at 461, 115 S. Ct. at 2221 (“[N]or does it contain 

a ‘pass through’ provision, requiring distributors and retailers to pass on the tax’s 

cost to consumers.” (emphasis added)); see also Wagnon, 546 U.S. at 103, 126 S. 

Ct. at 682 (“While the distributors are ‘entitled’ to pass along the cost of the tax to 

downstream purchasers, . . . they are not required to do so.” (citation omitted)); 

Chemehuevi Indian Tribe, 474 U.S. at 10-11, 106 S. Ct. at 289-90; United States v. 

State Tax Comm’n of Miss., 421 U.S. 599, 608, 95 S. Ct. 1872, 1878 (1975) 

(“[W]here a State requires that its sales tax be passed on to the purchaser and be 

collected by the vendor from him, this establishes as a matter of law that the legal 

incidence of the tax falls upon the purchaser.” (emphasis added)).17

The district court also looked at Florida’s administrative regulations and 

concluded that, under them, “[i]f the consumer does not remit the tax to the utility 

company, then the utility company is not required to pay the tax over to the State.” 

Seminole Tribe, 49 F. Supp. 3d at 1104. Based on this reasoning, the district court 

determined that the utility serves merely as a transmittal agent not unlike the 

 17 Mississippi Tax Commission did not involve taxes on Indian reservations but rather state 

taxes of alcohol on military bases. 421 U.S. at 600, 95 S. Ct. at 1874. There, the Supreme Court 

found that the legal incidence of the taxes fell on the military purchasers because the distillers 

were required to include the tax markup in the price, the military purchasers were required to pay 

the markup to the distillers, and the distillers were required to remit the markup to the tax 

commission. Id. at 608-09, 95 S. Ct. at 1878.

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distributors in Chickasaw Nation. Id. This comparison elides a necessary

distinction between an excise tax and a gross-receipts tax, though.

Florida’s Utility Tax law taxes receipts of payments. As detailed in the 

regulations cited by the district court, though, the utility may elect to pay the tax to 

the state based on total billings for the month as opposed to total receipts. See Fla. 

Admin. Code R. 12B-6.005(1)(e)(1). Because customers do not always pay their 

bills, the utility is permitted to take a credit or seek a refund of taxes it paid on 

billings that go uncollected. See id. R. 12-B-6.005(1)(e)(2)-(3). On the surface, 

then, this regulation may look similar to the Oklahoma law that permitted a 

distributor to take a credit for taxes unpaid by the retailer and may create the 

impression that the utility is in the same position as the Oklahoma distributor. See 

Chickasaw Nation, 515 U.S. at 461-62, 115 S. Ct. at 2221-22; Seminole Tribe, 49 

F. Supp. 3d at 1104. 

But the nature of Florida’s tax necessitates a different result. The taxable 

event under the Florida tax is the receipt of payments, while in Chickasaw Nation, 

the taxable event was the sale of fuel to the retailer. See Chickasaw Nation, 515 

U.S. at 462, 115 S. Ct. at 2222. Under the Utility Tax law, no tax liability exists 

until a consumer actually pays the utility something.18 Consequently, when a 

 18 The district court commented that “in reality, the utility company is only liable for the tax 

if and when the consumer remits the tax to the utility company as part of the consumer’s utility 

bill.” Seminole Tribe, 49 F. Supp. 3d at 1104. The Tribe stresses this point on appeal, arguing 

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Florida utility takes a credit for uncollected billings, it is seeking a refund to itself 

of a tax that it never owed in the first place. In contrast, in Chickasaw Nation, the 

tax was still owed by the retailer and any credit sought by the distributor was 

merely for taxes it prematurely transmitted. Given the nature of the Florida tax, 

the refund and credit regulations are far less indicative of transmittal-agent status19

here than in Chickasaw Nation.

The district court also put significant weight on a provision of the statute 

concerning an exemption regarding certain natural-gas customers. Seminole Tribe, 

49 F. Supp. 3d at 1104-05 (citing Fla. Stat. § 203.01(3)(d)). That provision states 

that the Utility Tax does not apply to natural-gas sales to a limited class of 

industrial customers that use the gas as an energy source or a raw material. Fla. 

Stat. § 203.01(3)(d) (cross-referencing Fla. Stat. § 212.08(7)(ff)(2)). The 

paragraph further provides that if the exempt consumer gives the utility a written 

certification of its industrial exemption, the utility is relieved “from the 

 

that the utility never pays “out of pocket” if the customer does not pay the tax portion of its bill. 

The Tribe’s argument is true to a point, but it tells only part of the story, as (a) no one is liable 

for the Utility Tax if the utility never receives payment from its customers, and (b) the utility is 

liable for taxes on any fraction of payment received. In other words, if a customer chose not to 

pay the itemized portion of the tax but did pay the rest of its utility bill, then the utility would 

still owe tax on the smaller amount received. If, for some reason, the utility did not pass along 

the tax as part of its bill, it would still be required to pay the tax based on the amount it receives 

from its customers. See Fla. Admin. Code R. 12B-6.0015(3)(a)-(b).

19 Additionally, in contrast to Chickasaw Nation, nothing in Florida law states that the 

utility remits the tax “on behalf of” its customers, nor does Florida law permit a utility to keep a 

fraction of the gross-receipts tax as compensation for collecting the tax. See Chickasaw Nation, 

515 U.S. at 461-62, 115 S. Ct. at 2221-22.

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responsibility of remitting tax on the nontaxable amounts, and the department shall 

look solely to the purchaser for recovery of such tax if the department determines 

that the purchaser was not entitled to the exclusion.” Id. From this provision, the 

district court drew the conclusion that the existence of exemptions based on the 

identity of the consumer “reveals the legal incidence of the tax is upon the 

consumer.” 49 F. Supp. 3d at 1104-05.

This holding rests upon the notion that consumer-based exemptions illustrate 

that the legislature implicitly intended the tax to fall on consumers because the 

exemptions necessarily recognize that the tax can be passed through to consumers. 

But as with the provision allowing for optional itemization of the bill to reflect the 

amount of the Utility Tax, recognition that a tax may, or even likely will be passed 

through to a consumer is not the same as mandating that the tax be passed 

through.20 To shift the legal incidence to a consumer, Chickasaw Nation insists 

that any pass-through be mandatory.

Similarly, the district court pointed to another provision of Florida’s overall 

gross-receipts tax code that it interpreted as “expressly stat[ing] that no other 

 20 In fact, it’s hard to imagine any business tax that wouldn’t be passed along ultimately to 

the consumer unless doing so was expressly or economically prohibited. Cf. Chickasaw Nation, 

515 U.S. at 460, 115 S. Ct. at 2221 (noting the “complicated” relationship between passing along 

tax increases and sales volume). Or as Ronald Reagan once explained, “Who pays the business 

tax anyway? We do! You can’t tax business. Business doesn’t pay taxes. It collects taxes.” 

Manuel Klausner, Inside Ronald Reagan: A Reason Interview, REASON, July 1975 (emphasis in 

original), http://reason.com/archives/1975/07/01/inside-ronald-reagan/print (last visited Aug. 18, 

2015). But again, the Supreme Court has been clear in rejecting an economic-realities test in 

determining legal incidence.

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‘exemptions or exceptions’ apply to the Utility Tax.” 49 F. Supp. 3d at 1104-05

(citing Fla. Stat. § 203.04). In the district court’s view, the “fact that the Florida 

legislature provided some exemptions to the Utility Tax, and disavowed many 

other exemptions, reveals that the legislature intended the legal incidence of the 

Utility Tax to fall upon consumer,” because “[i]f the legal incidence of the tax 

were on the utility company, there would be no need for the disavowal of most 

exemptions and exceptions, or the inclusion of others.” Id. 

We respectfully disagree with this conclusion. First, this passage of Florida 

law merely creates a statutory rule of construction requiring that any tax exceptions 

or exemptions be clearly expressed by the legislature. Fla. Stat. § 203.04. Second, 

we discern no inherent incompatibility between placing the legal incidence of the 

tax on the utility provider and tying exemptions from the tax to certain types of 

consumers. Surely, the legislature can act to encourage certain industries with 

exemptions that essentially prohibit permissive pass-through without making passthrough mandatory. Moreover, the legislature can encourage the utility provider’s

business through targeted tax exemptions (for example, encouraging the utility to 

provide services to an underserved area by reducing the taxes on the receipts 

obtained from those underserved areas) without impacting the legal incidence of 

the tax. 

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In essence, arguments concerning consumer-based tax exemptions appear to 

us to conflate legal and economic incidence by viewing economically inevitable 

pass-through as indistinguishable from legally mandatory pass-through. See, e.g., 

Seminole Tribe, 49 F. Supp. 3d at 1105 (“Under Florida law the tax is passed on to 

consumers, whether it is separately itemized or not . . . .” (emphasis added)). But 

Chickasaw Nation insists on mandatory legal requirements over economic realities, 

no matter how “automatic” those realities may be.

The district court also contrasts this case with Wagnon, where the Kansas 

statute expressly permitted the distributor to pass on the tax without requiring it to 

do so. See Seminole Tribe, 49 F. Supp. 3d at 1105 (citing Wagnon, 546 U.S. at 

103, 126 S. Ct. at 682). But the absence of statutory language expressly permitting 

pass-through of a tax does not equate to a statutory requirement that the tax must 

be passed through, even when the economic realities of the situation all but make 

such pass-through automatic. The distinction might be one of form over substance, 

but the Supreme Court recognized as much was possible when it acknowledged 

that a state can shift the legal incidence of a tax through wordsmithing. See 

Chickasaw Nation, 515 U.S. at 460, 115 S. Ct. at 2221.

Of course, a pass-through requirement need not be explicitly stated in 

dispositive language and instead may be fairly interpreted from the statute and its 

application. Chemehuevi Indian Tribe, 474 U.S. at 10-11, 106 S. Ct. at 289-90. 

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But it must be a requirement nonetheless. See id.; Chickasaw Nation, 515 U.S. at 

461, 115 S. Ct. at 2221; Wagnon, 546 U.S. at 103, 126 S. Ct. at 682; Miss. Tax 

Comm’n, 421 U.S. at 608, 95 S. Ct. at 1878. Despite the Tribe’s emphasis on the 

inevitability of pass-through, at the end of the day, there is simply nothing in the 

Florida scheme requiring a utility to pass the tax along to its customers. 

Finally, the Tribe attempts to liken Florida’s gross-receipts tax to a sales tax, 

where, generally under Florida law, the legal incidence falls on the consumer. See

Fla. Dep’t of Revenue v. Naval Aviation Museum Found., Inc., 907 So. 2d 586, 587 

(Fla. 1st DCA 2005). And, indeed, Florida’s sales-tax statute initially describes the 

sales tax in a manner similar to the Utility Tax. Compare Fla. Stat. § 212.05 (“It is 

hereby declared to be the legislative intent that every person is exercising a taxable 

privilege who engages in the business of selling tangible personal property at retail 

in this state . . . .”) with Fla. Stat. § 203.01(5) (2012) (“The tax is imposed upon 

every person for the privilege of conducting a utility or communications services 

business . . . .”). But this is where the similarities end.

The Supreme Court has recognized that sales and gross-receipts taxes are 

distinguishable based on the legal incidence of the tax: 

We follow standard usage, under which gross receipts 

taxes are on the gross receipts from sales payable by the 

seller, in contrast to sales taxes, which are also levied on 

the gross receipts from sales but are payable by the buyer 

(although they are collected by the seller and remitted to 

the taxing entity).

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Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 n.3, 115 S. Ct. 1331, 

1335 n.3 (1995). Florida has embraced this distinction by labeling the Utility Tax 

as a gross-receipts tax and codifying it in a separate chapter—Chapter 203—from

Florida’s sales taxes, which are found in Chapter 212.

Beyond the traditional definitions, Florida has also expressly codified that 

the sales tax must be passed through to, and be paid by, the consumer—something 

it has not done with respect to the gross-receipts tax. See, e.g., Fla. Stat. § 

212.06(3)(a) (“[E]very dealer making sales, . . . shall, at the time of making sales, 

collect the tax imposed by this chapter from the purchaser.” (emphasis added)); id.

§ 212.07(1)(a) (“The privilege tax herein levied measured by retail sales shall be 

collected by the dealers from the purchaser or consumer.” (emphasis added)); id. § 

212.07(4) (“A dealer engaged in any business taxable under this chapter may not 

advertise or hold out to the public, in any manner, directly or indirectly, that he or 

she will absorb all or any part of the tax, or that he or she will relieve the purchaser 

of the payment of all or any part of the tax, or that the tax will not be added to the 

selling price of the property or services sold or released or, when added, that it or 

any part thereof will be refunded either directly or indirectly by any method 

whatsoever.”). 

Additionally, the State of Florida cannot pursue utility customers for unpaid 

Utility Tax amounts, while it can pursue purchasers for unpaid sales taxes. Fla. 

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Stat. § 212.07(8); Steffens Dep. 36:16 – 37:19. The Tribe tries to undermine this 

point by arguing that having the utility provider remit the tax is merely designed 

for the “administrative convenience of the state,” because it would be too onerous 

for the state to collect the tax directly from consumers. But the Tribe’s argument 

does not matter to the issue of legal incidence. As the Supreme Court noted in 

Chickasaw Nation, a state can intentionally place the legal incidence of a tax on 

one entity while requiring another entity to collect and remit the levy. See 

Chickasaw Nation, 515 U.S. at 460, 115 S. Ct. at 2221. 

Finally, we observe that Florida also levies a sales tax on electricity, the 

legal incidence of which falls on the purchaser of electricity. Fla. Stat. § 

212.05(1)(e)(1)(c); see Fla. Stat. § 203.01(1)(a)(3); id. § 212.06(3)(a). While 

separate gross-receipts and sales taxes do not necessarily indicate that the taxes 

have separate legal incidences, given the traditional usage of those terms and the 

structure of Florida’s tax code, we find the separate taxes more indicative of an 

intent to impose the legal incidence of the Utility Tax on the utility rather than to 

place both taxes on the consumer.

This is not to say that the district court’s analysis is not valid in other 

respects, and in fact, the Florida tax does bear some hallmarks of the Oklahoma tax 

discussed in Chickasaw Nation. For example, just as Oklahoma did not tax sales 

between distributors in Chickasaw Nation, Florida generally does not apply its tax 

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to sales of natural gas or electricity from one utility service provider to another. 

See Fla. Stat. § 203.01(3)(a)(1), (2); Fla. Admin. Code R. 12B-6.0015(1)(b), (2)(c). 

Nevertheless, we conclude that the “fair[est]” interpretation of Florida’s Utility 

Tax statute as written and applied demonstrates that the state intended the legal 

incidence of the tax to fall on the utility company.

B. Is the Utility Tax Preempted Under Bracker?

Having concluded that the Utility Tax impermissibly fell on the Tribe, the 

district court declined to determine in the alternative whether the Utility Tax would 

be preempted by federal law under Bracker. See Seminole Tribe, 49 F. Supp. 3d at 

1108. Now that we have reached the opposite conclusion, we must determine 

whether federal law preempts imposition of the Utility Tax on non-Indian utility 

companies operating on-reservation.21 After careful consideration, we hold that 

the Utility Tax does not violate federal law.

 21 We assume, for the purposes of our inquiry, that the “taxable event” under the Utility Tax 

occurs on the reservation. In the district court, Stranburg argued that the taxable event occurred 

where the utility company physically received its payments. But Stranburg provided no legal 

authority for this position, nor did he even provide any record evidence indicating where the 

utility payments were collected. Consequently, the district court determined that the tax was 

imposed on-reservation and that Stranburg had “forfeited” any argument that the tax was 

imposed off-reservation. Seminole Tribe, 49 F. Supp. 3d at 1107. While Stranburg insists that 

we need not decide this issue, he contends on appeal that he has not abandoned his argument that 

the taxable event occurs off-reservation. But Stranburg has still failed to cite legal authority or 

factual evidence in support of his argument. Accordingly, he has likely forfeited any challenge 

to the district court’s determination. See Farrow v. West, 320 F.3d 1235, 1242 n.10 (11th Cir. 

2003). Regardless, because we conclude, under the record presented in this case, that the tax is 

validly imposed on-reservation, the issue is essentially moot.

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Whether the Utility Tax is preempted by federal law is ultimately a question 

of congressional intent. Cotton Petroleum, 490 U.S. at 175-76, 109 S. Ct. 1707. 

Although an express congressional declaration of preemption is not required, the 

federal and tribal interests at stake must be sufficient to establish that the exercise 

of the state’s taxing authority here violates congressional intent. See id. at 176-77, 

109 S. Ct. at 1707-08; Bracker, 448 U.S. at 144-45, 100 S. Ct. at 2584. Unlike in 

the case of the Rental Tax, we discern here no pervasive federal interest or 

comprehensive regulatory scheme covering on-reservation utility delivery and use

sufficient to demonstrate a congressional intent to preempt state taxation of a 

utility provider’s receipts derived from on-reservation utility service.

The Tribe asserts that the tax is preempted because the Tribe uses electricity 

in connection with various activities whose regulation is preempted by federal law,

including the provision of essential government services, leasing of Indian land, 

and Indian gaming. In the Tribe’s view, the Utility Tax is indistinguishable from 

the tax on fuel preempted in Bracker because fuel use was essential to the heavily 

regulated timber activities that preempted the tax, and electricity is essential to all 

on-reservation activities. 

The problem with the Tribe’s argument is that it ignores the nature of the 

Bracker inquiry—a “particularized” and “flexible” test “sensitive to the particular 

state, federal, and tribal interests involved.” Bracker, 448 U.S. at 145, 100 S. Ct. at 

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2284; Cotton Petroleum, 490 U.S. at 184, 109 S. Ct. at 1711. The fuel tax was 

preempted in Bracker as applied to the timber company because of the extensive 

federal regulation of Indian timber harvesting. Bracker did not invalidate (or even 

discuss) the application of Arizona’s fuel tax to other on-reservation activities. 

Significantly, the Tribe has not introduced evidence of a substantial federal interest 

in regulating Indians’ utility use specifically. The Tribe essentially expresses a 

generalized desire to avoid the Utility Tax. Just as the state cannot assert a 

generalized interest in raising revenue to support its taxes, the Tribe cannot

demonstrate congressional intent to preempt a specific state tax by bundling up an 

assortment of unrelated federal and tribal interests tied together by the common 

thread of electricity use. Because the Tribe does not develop further argument 

with respect to electricity use in specifically regulated on-reservation activities,22

we conclude that it has not established that Florida’s Utility Tax is generally 

preempted as a matter of law in this case. 

 22 The Tribe’s brief contains a non-exhaustive list of activities it asserts are “exclusively 

and pervasively regulated by federal law,” including police and fire protection, land leasing, and 

gaming, along with references to associated federal statutes. But the Tribe has failed to 

demonstrate that the existence of these statutes represents an exclusive or pervasive federal 

regulation of those activities. Accordingly, we are not in a position to conduct particularized 

inquiry with respect to each specific activity listed. But we offer no opinion on whether, if 

properly framed, the Tribe may be able to demonstrate that the Utility Tax is preempted with 

respect to some or all of the specific activities it has listed.

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V. Conclusion

In conclusion, we hold that Florida’s Rental Tax is expressly precluded by 

25 U.S.C. § 465, and, in the alternative, is preempted by the comprehensive federal 

regulation of Indian land leasing. We therefore affirm that aspect of the district 

court’s order. We further conclude that the district court erred in placing the legal 

incidence of the Utility Tax on the Tribe and find that, on this record, the Tribe has 

not demonstrated that the Utility Tax is generally preempted by federal law. 

Accordingly, we reverse the district court’s judgment with respect to Florida’s 

Utility Tax. This case is remanded to the district court for proceedings consistent 

with this opinion.

AFFIRMED IN PART and REVERSED IN PART.

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