____________

Nos. 95-2529

95-2535

95-2720

____________

United States of America, on *

behalf of the Cheyenne River *

Sioux Tribe and its members, *

*

Plaintiff/Appellant/Cross *

Appellee, *

*

Cheyenne River Sioux Tribe, *

*

Intervenor Plaintiff/ *

Appellant/Cross Appellee, *

*

v. *

*

State of South Dakota; Julie *

M. Johnson, State Secretary of *

Revenue, *

*

Defendants/Appellees/Cross *

Appellants, * Appeals from the United States

* District Court for the 

Ronald J. Schreiner; Dewey * District of South Dakota

County, South Dakota; *

John Alley, County Treasurer; *

Ziebach County, South Dakota; *

Virginia Hertel, County *

Treasurer, *

*

Defendants/Appellees. *

*

____________ *

*

 No. 95-2688 *

____________ *

*

Rosebud Sioux Tribe, *

*

Plaintiff/Appellant, *
 The HONORABLE BRUCE M. VAN SICKLE, United States District *

Judge for the District of North Dakota, sitting by designation. 

 The statute provides: 1

In addition to all other license and registration fees

for the use of the highways, a person shall pay an excise tax at

the rate of three percent on the purchase price of any motor

vehicle . . . purchased or acquired for use on the streets and

highways of this state and required to be registered under the

2

v. *

*

Julie Johnson, State Secretary *

of Revenue, *

*

Defendant/Appellee. *

____________ *

*

United States of America, *

*

Amicus Curiae. *

____________

Submitted: May 16, 1996

 Filed: January 17, 1997 

____________

Before MURPHY and ROSS, Circuit Judges, and VAN SICKLE, District Judge. *

____________

MURPHY, Circuit Judge.

These two cases challenge the jurisdiction of the State of South

Dakota to impose its motor vehicle excise tax and registration fee on

Indians who live within the boundaries of a reservation. In one case, the

United States sued for declarative, injunctive, and compensatory relief on

behalf of the Cheyenne River Sioux Tribe and its members. The second case

involves claims brought by the Rosebud Sioux Tribe for equitable relief.

South Dakota Codified Laws section 32-5B-1 provides that residents

shall pay an excise tax on the value of any motor vehicle purchased or

acquired for use in the state and required to be registered. S.D. Codified

Laws Ann. § 32-5B-1. The excise tax is 1
laws of this state. This tax shall be in lieu of any tax levied

by chapters 10-45 and 10-46 on the sales of such vehicles. 

Failure to pay the full amount of excise tax is a Class 1

misdemeanor.

S.D. Codified Laws Ann. § 32-5B-1.

 The issuance or transfer of a certificate of title also 2

requires payment of a $5 fee, which is not challenged by the

parties in this case.

 The statute provides: 3

Subject to the provisions of §§ 32-5-17 to 32-5-45,

inclusive, license fees and compensation for use of the

highways, fees shall be based, except as otherwise

specifically provided, upon manufacturers' weights,

including accessories. If a noncommercial motor

vehicle is an automobile, pickup truck or van with a

manufacturer's shipping weight, including accessories,

of six thousand pounds or less, the license fees for

such a motor vehicle shall be as provided by § 32-5-6.

. . . These fees shall be paid annually to the county

treasurer, and shall be as provided by this chapter.

S.D. Codified Laws Ann. § 32-5-5.

3

a one time assessment collected by the county in which the owner resides

when the vehicle is first licensed in the state. Id. § 32-5B-10. Payment

of the excise tax is required for the issuance or transfer of state vehicle

title, id. § 32-5B-14, and is thus a condition precedent to registration

and issuance of state license plates. The proceeds are allocated to the 2

state highway fund. Id. § 32-5B-17. Failure to pay the excise tax is a

misdemeanor. § 35-5B-1.

South Dakota Codified Laws section 32-5-5 imposes a separate motor

vehicle registration fee on state residents. S.D. Codified Laws Ann. § 32-

5-5. The annual fee is based on the weight of the vehicle and ranges from 3

$20 to $40 for average noncommercial
 Motor vehicles owned by the tribe itself are statutorily 4

exempt from the state excise tax and registration fee, and

license plates are issued for a fee based on actual

administrative costs. S.D. Codified Laws Ann. § 32-5-42

(registration fee); id. § 32-5B-2(1) (excise tax).

4

vehicles. It is collected at the time the owner obtains license plates or

renewal tags, and is a condition precedent for their issuance. Id. A

percentage of the collected fees goes toward administrative costs, and the

remainder is allocated to various road funds. Failure to pay the

registration fee is a misdemeanor. § 32-5-2.4.

I.

The Cheyenne River Sioux Tribe is a federally recognized Indian

tribe. In 1868 the Fort Laramie Treaty, 15 Stat. 635, established the

Great Sioux Reservation for the use and occupancy of the Sioux Nation.

Congress later created the Cheyenne River Indian Reservation in 1889 on

part of the treaty land as a separate reservation for the Cheyenne River

Sioux Tribe. See South Dakota v. Bourland, 508 U.S. 679 (1993). In 1908

Congress opened a significant portion of the reservation to non-Indian

settlement, but this did not diminish the reservation. See Solem v.

Bartlett, 465 U.S. 463 (1984). The reservation wholly encompasses Dewey

and Ziebach counties in the State of South Dakota. Its residents include

tribal members, nonmember Indians, and non-Indians. 

The tribe believes that all Indians residing on the Cheyenne River

Indian Reservation are immune from state taxation of their motor vehicles,

including both the excise tax and the annual registration fee. The tribal

council has consistently maintained that the state lacks authority to

collect the excise tax and registration fee from tribal members, and there 4

is evidence in the record that at least some members have paid the excise

tax and registration fee under protest.
 The suit named as defendants the State of South Dakota and 5

its Secretary of Revenue, as well as two counties and the county

treasurers. 

 The Honorable John B. Jones, United States District Judge 6

for the District of South Dakota.

5

The statutes do not create an exemption for Indian-owned vehicles

that are driven exclusively on reservation land, but the state apparently

does not enforce its motor vehicle registration laws in such circumstances.

The owner of any vehicle driven outside the reservation is subject to

criminal penalties for improper registration, however. At one time, tribal

law incorporated state traffic laws and required all motor vehicles driven

on the reservation to have valid state license plates. In 1994 the tribe

enacted its own motor vehicle registration system, but has not yet

implemented it to avoid imposing double fees on reservation residents. 

On September 3, 1992 the United States brought suit on behalf of the

Cheyenne River Sioux Tribe and its members, seeking a declaration that the

state lacks jurisdiction to impose its motor vehicle excise tax and

registration fee on Indians residing on the Cheyenne River reservation.5

It also sought an injunction against the collection of the fees and taxes,

and monetary damages in the amount of taxes paid between 1986 and the

present. On August 24, 1993, the Cheyenne River Sioux Tribe was permitted

to intervene as a plaintiff pursuant to Federal Rule of Civil Procedure

24(b). 

In February 1995 the district court ruled on cross motions for

6

summary judgment. It held that the excise tax was essentially a personal

property tax and thus could not be imposed on tribal members living on the

reservation. See Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114,

127-28 (1993). It viewed the annual registration fee differently,

concluding that it was a nondiscriminatory fee that could validly be

collected from tribal
6

members residing on the reservation who elected to purchase state license

plates. The district court did not extend immunity from the excise tax to

nonmember Indians and did not award damages to tribal members. Judgment

was entered on February 23, 1995, and the parties filed cross appeals.

The United States and the tribe argue that the registration fee

operates as a tax and thus cannot be imposed on reservation Indians. They

also claim that monetary damages should be awarded for taxes previously

paid. The tribe also argues that tax immunity should be extended to

nonmember Indians residing on the Cheyenne River reservation. South Dakota

responds that the district court correctly determined the registration fee

to be valid, denied monetary damages, and held that nonmember Indians were

not immune from taxation. It argues on cross appeal that the excise tax

is a valid sales and use tax.

A.

As a general rule, a state lacks jurisdiction to tax the lands,

activities, and property of tribal members "'within the boundaries of the

reservation,'" unless there has been a "'cession of jurisdiction or other

federal statutes permitting it.'" California v. Cabazon Band of Mission

Indians, 480 U.S. 202, 215 n. 17 (1987) (quoting Mescalero Apache Tribe v.

Jones, 411 U.S. 145, 148 (1973)). In other words, a tribal member's onreservation activities are immune from state taxation absent express

congressional authorization of the tax. McClanahan v. State Tax Comm'n of

Arizona, 411 U.S. 164, 171 (1973). This is because a state's authority to

tax on-reservation activities is limited or preempted by the terms of

treaties which set aside reservations for the exclusive use of Indian

tribes and by various federal statutes
 The analysis in McClanahan relies on the language in a 7

treaty with the Navajo. South Dakota does not claim that the

analysis should be different in this case or argue that it has

jurisdiction to tax on-reservation activities or property. 

7

defining the limits of state power. Id. The doctrine of Indian

7

sovereignty reflects the "'deeply rooted'" historical policy of "'leaving

Indians free from state jurisdiction and control.'" Id. at 168 (quoting

Rice v. Olson, 324 U.S. 786, 789 (1945)). That doctrine "provides a

backdrop against which the applicable treaties and statutes must be read."

Id. at 172.

Congress has not specifically authorized the taxation of a tribal

member's personal property, and South Dakota thus lacks jurisdiction to

impose such a tax. This would include any tax or fee that operates as a

personal property tax on motor vehicles owned by tribal members living on

the reservation. Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114,

127-28 (1993); Washington v. Confederated Tribes of Colville Indian

Reservation, 447 U.S. 134, 163 (1980); Moe v. Confederated Salish and

Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 480-81 (1976). 

The general rule of tax immunity applies to activities that occur on

the reservation, including ownership of property, but "different

considerations" apply to off-reservation activities. Mescalero, 411 U.S.

at 148. Indians who go beyond reservation boundaries are generally "held

subject to nondiscriminatory state law otherwise applicable to all

citizens." Id. at 148-49. This reasoning suggests that states may impose

on tribal members a sales tax or other nondiscriminatory tax on offreservation purchases. See Tunica-Biloxi Tribe v. Louisiana, 964 F.2d 1536

(5th Cir. 1992). 

The parties do not disagree about the general rule of tax immunity

for tribal members within the boundaries of a reservation or the authority

of the state to tax off-reservation sales
 The dissent attempts to make too much of the mention of the 8

fact that the South Dakota excise tax is not collected by the

retailer at the time of sale. This is but one of the facts that

make up the total circumstances showing that the excise tax is a

tax on personal property rather than a sales tax. The tax only

applies to certain types of vehicles sales in South Dakota. It

also applies to vehicles purchased by South Dakota residents

outside of the state and to certain vehicles not recently

purchased, but recently brought into the state. Furthermore, it

arises on application for title, rather than on vehicle sale.

Under the teaching of Supreme Court precedent it is the

nature and characteristics of the particular tax that determines

whether the tax is permissible, not the nature of the label

applied to it. Sac and Fox, 508 U.S. at 127-28; Colville, 447

U.S. at 163. This requires examination of all the attributes of

the particular tax. The dissent ignores this principle and

selects only certain factors to analyze.

The dissent also has done its own survey of taxes in other

states in the circuit and concludes that they show some

similarities to the South Dakota excise tax. There is no

information about whether any of these states have attempted to

apply the taxes to on-reservation Indians, and if so, what the

result has been. This discussion of other state taxes is not

based on the record before the court, and the parties have had no

occasion to address the possible relevance or irrelevance of the

dissent’s speculation about other state laws and its invitation

8

transactions. South Dakota admits that it would lack authority to impose

state property taxes on members of the Cheyenne River Sioux Tribe living

on the reservation, and the tribe concedes that its members could validly

be required to pay a sales tax on off-reservation purchases, a properly

limited state road use tax, or certain non-discriminatory fees. The

dispute here is one of classification: what sort of tax or fee is created

by these statutes? 

South Dakota argues that the excise tax is a sales tax on offreservation purchases of motor vehicles. The statute itself speaks of

levying an excise tax, "in lieu of" any sales or use tax, on the value of

any motor vehicle "purchased or acquired for use" in the state. § 32-5B-1.

Unlike the state sales tax, the excise tax is not imposed on the retailer

or at the time of sale. Compare S.D. 8
for additional litigation. 

9

Codified Laws Ann. § 10-45-2 (retail sales tax) with § 32-5B-10 (excise

tax). Nor is the excise tax revenue credited to the general revenue fund.

Compare S.D. Codified Laws Ann. § 10-46-48 with § 32-5B-17. Although the

amount of the tax is based on the "purchase price," that term is defined

to include either the actual consideration paid or the actual value of the

vehicle. See S.D. Codified Laws Ann. §§ 32-5B-4(3)-(5), 32-5B-11. 

The excise tax does not operate like a sales tax. It might resemble

a sales tax in some cases, such as when a new or used car is purchased from

a licensed dealer in South Dakota and registered there by the new owner.

In other circumstances, however, the tax more obviously relates to the

ownership of the vehicle as property rather than the sales transaction

itself. For example, the tax does not apply to all motor vehicle sales in

the state, but only to those resulting in ownership by a South Dakota

resident. The tax is not paid unless the owner applies for the issue or

transfer of South Dakota title. § 32-5B-14. Conversely, the excise tax

does apply to vehicles purchased out of state by South Dakota residents.

Moreover, the tax applies to motor vehicles that are being newly brought

into the state, but have not recently been purchased. A person moving to

South Dakota and applying for a state motor vehicle title is taxed at a

percentage of the retail value of the vehicle on the day it enters the

state, unless the owner provides sufficient proof that the vehicle was

subject to an equal or greater tax in another state. § 32-5B-11. 

South Dakota asserts that Tunica-Biloxi Tribe v. Louisiana, 964 F.2d

1536 (5th Cir. 1992), supports its claim that the excise tax is a valid

sales tax, but the tax at issue in that case was different from the South

Dakota excise tax. Tunica involved a Louisiana tax on the "sale at retail"

of any item of property
 Louisiana also imposed a separate "use tax" on the fair 9

market value of vehicles purchased out of state and later brought

into it. That tax was not at issue in Tunica, but the court

indicated that its validity might have presented a different

question. 964 F.2d at 1540-41.

 It should also be noted that the Fifth Circuit did not 10

have the benefit of the most recent Supreme Court guidance in

this area, because Tunica was decided before Sac and Fox. 

10

within the state. That tax did not apply to items purchased out of state.9

Purchasers from outside Louisiana could also be subject to the sales tax

unlike the South Dakota tax which is not applied to out-of-state

purchasers. Since the characteristics of the South Dakota tax differ from

the Louisiana tax, the outcome here is not inconsistent with Tunica. It

is simply wrong to suggest that our decision will create a split among the

circuits.10

The South Dakota excise tax resembles the personal property taxes

found to be preempted in Moe, Colville, and Sac and Fox. Colville involved

a Washington "excise tax" which was assessed annually at a percentage of

a motor vehicle's value for the "privilege" of using a motor vehicle in the

state. 447 U.S. at 162. The Supreme Court held that the tax was similar

in all but name to the personal property tax on motor vehicles that had

been invalidated as applied to tribal members in Moe, 425 U.S. at 480-81.

Colville, 447 U.S. at 163. Similarly, in Sac and Fox, the Supreme Court

held that Oklahoma's motor vehicle excise tax and its yearly vehicle

registration fee operated as personal property taxes and thus could not be

imposed on tribal members living on the reservation. 508 U.S. at 127-28.

The South Dakota tax is not identical to the taxes in Moe, Colville, and

Sac and Fox, but it has important similarities. Like them, the South

Dakota tax is applied to motor vehicle owners, rather than simply to

purchasers, and is based on a percentage of the value of the motor vehicle.

Sac and Fox, 508 U.S. at 119; Colville, 447 U.S. at 163 (discussing Moe).

It is true that this tax is not applied annually,
 Contrary to the dissent's implication in its discussion of 11

Moe and Colville, Sac and Fox indicates that a state without

authority to impose an annual tax has no more authority to impose

a one-time tax.

11

but neither was the tax found invalid in Sac and Fox. Sac and Fox, 508 11

U.S. at 126.

The South Dakota excise tax essentially operates as a tax on the

ownership of a motor vehicle, rather than as a tax on off-reservation sales

transactions. The ownership of a vehicle is the sort of on-reservation

activity that a state is not permitted to tax without express Congressional

authorization. See Sac and Fox, 508 U.S. at 127. The district court did

not err in ruling that the state lacks jurisdiction to impose the excise

tax on tribal members residing on the reservation.

B.

The United States and the Cheyenne River Sioux Tribe argue that the

state similarly lacks jurisdiction to impose its annual registration fee

on reservation Indians because it operates to tax on-reservation

activities. South Dakota responds that it has authority to impose the fee

because it is a nondiscriminatory fee for off-reservation activities. The

issue is again one of classification.

The United States and the tribe claim that the fee actually operates

as a tax on the ownership of vehicles and is therefore preempted under Sac

and Fox, Colville, and Moe. In Sac and Fox the Court held Washington's

annual registration fee to be invalid as applied to reservation Indians,

but that fee was based on the value of a vehicle and thus was like a

personal property tax. Id. at 127-28. It was found to be no different

from the taxes held preempted in Moe and Colville. South Dakota's

registration fee does not resemble a property tax, however. It is not

based on the
12

value of the vehicle, but is a flat fee based on weight, and any proceeds

resulting from it are dedicated to highway purposes. 

The United States and the tribe also suggest that the fee is a tax

on the use of state roads. They concede that a state might have

jurisdiction to impose a tax on reservation Indians for the use of offreservation roads, but argue that the fee here is not "tailored to the

actual amount of off-reservation use" as required by Colville, 447 U.S. at

163-64. 

In Colville, the Supreme Court rejected the State of Washington's

claim that its excise tax was actually a tax on the use of the vehicle

within the state. It held that the tax effectively functioned as a

personal property tax, which had previously been held invalid as applied

to tribal members in Moe:

 

We do not think Moe and McClanahan can be this easily

circumvented. While Washington may well be free to levy a tax

on the use outside the reservation of Indian-owned vehicles, it

may not under that rubric accomplish what Moe held was

prohibited. Had Washington tailored its tax to the amount of

actual off-reservation use, or otherwise varied something more

than mere nomenclature, this might be a different case.

Id. There is no suggestion in the South Dakota statute that the purpose

of the fee is to tax the use of the state roads. Even if it were, the tax

is significantly different from a property tax so that the concerns

expressed in Colville are avoided. 

The registration fee is a nondiscriminatory fee for the registration

of a vehicle in the state and the issuance of state license plates. See

Moe, 425 U.S. at 469 (Montana fee required for registration and issuance

of state license plates could be imposed
 Montana's registration fee was not challenged by the tribe 12

in Moe, but the Court's analysis suggests a basis to

differentiate between a registration fee that could be imposed on

reservation Indians and a personal property tax that could not.

13

on reservation Indians). It is not collected from owners of motor

12

vehicles that are not registered with the state, including those driven

exclusively within the boundaries of the reservation. The concerns related

to state taxation of on-reservation activities are not present here because

the fee is not based on any on-reservation activity. Accordingly, the

district court did not err in ruling that Indians who elect to purchase

South Dakota license plates or renewal tags can be required to pay the

annual registration fee.

C.

The Cheyenne River Sioux Tribe argues that immunity from the excise

tax should not be limited to tribal members but should extend to nonmember

Indians residing on the reservation. South Dakota responds that the

interests of nonmember Indians have not been properly raised, and argues

that nonmember Indians are subject to state taxation because they have the

same status as non-Indians. 

The state's power to tax nonmember Indians is not directly raised by

this action, because no nonmember Indians are parties to this case. The

United States initiated the action "on behalf of the Cheyenne River Sioux

Tribe and its members," and the tribe intervened "to protect its sovereign

right to raise revenue to finance its state government . . . ." 

Even if the issue had been properly presented, the arguments made are

not convincing. As discussed above, the tax immunity of reservation

Indians is premised on the preemption of state laws by treaty and statute

and informed by notions of tribal self government. These reasons

underlying immunity do not have the same
 The tribe argues that state taxation of nonmembers is 13

preempted by the comprehensive federal Indian country road

system, but the statutes and regulations implementing that system

do not demonstrate a Congressional intent to exempt nonmember

Indians from state taxation. See Colville, 447 U.S. at 161. 

14

force as applied to Indians who are not members of the governing tribe.13

See Colville, 447 U.S. at 160-61 (retail sales tax immunity for onreservation sales does not extend to nonmember Indians residing on

reservation). 

The tribe argues that the interest in tribal self government extends

to nonmember Indians because Congress has defined tribal self government

to include all Indians. Although Congress has defined tribal powers of

self government to include criminal jurisdiction over "all Indians," 25

U.S.C. § 1301, there is no question that South Dakota retains civil

regulatory jurisdiction over nonmember Indians in the same way that it does

over non-Indians on the reservation. See id.

The tribe also asserts that the terms of the 1868 treaty creating the

Great Sioux Reservation establishes that nonmember Indians have an interest

in tribal self government. It points to language setting aside land for

the use of the Sioux Nation and "for such other friendly tribes or

individual Indians as from time to time they may be willing . . . to admit

amongst them." Art. 2. (15 Stat. 653). Nonmember Indians living on the

reservation are not in fact involved in tribal self government, however.

The Cheyenne River Sioux Tribe's constitution and bylaws do not allow

nonmember Indians to vote in tribal elections or hold office on the

reservation.

The tribe also argues that at a minimum any Sioux Indian residing on

its reservation should be immune from taxation because all Sioux are part

of the Sioux Nation. The Great Sioux Reservation was divided into separate

reservations for various
 They actually seek damages for payments by all reservation 14

Indians of both the excise tax and the registration fee, but the

claims of nonmembers and those claims based on the registration

fee are foreclosed for the reasons already discussed.

15

Sioux tribes, including the Cheyenne River Sioux. Although the different

Sioux tribes share common ties, they exist as separate entities with their

own constitutions and governing structures. Nonmember Sioux residing on

the Cheyenne River reservation are not allowed to vote or hold office, and

are not actually constituents of the governing tribe.

D.

The United States and the tribe argue that monetary damages should

be awarded to compensate for past payments of the excise taxes by tribal

members. The district court rejected the claim for damages because

14

previous cases addressing motor vehicle taxation had not been applied

retroactively. South Dakota offers several alternative rationales for

denying monetary relief. 

The district court correctly noted that the opinions in Moe,

Colville, and Sac and Fox did not grant retroactive relief, but those cases

did not involve claims for monetary damages. Rather they were claims for

declaratory and injunctive relief. When a state tax is declared to be

invalid either "because . . . it [is] beyond the State's power to impose"

or "because the taxpayers were absolutely immune from the tax," the State

must "'undo' the unlawful deprivation by refunding the tax previously paid

under duress." McKesson Corp. v. Division of Alcoholic Beverages and

Tobacco, 496 U.S. 18, 39 (1990) (citing Ward v. Love County Board of

Comm'rs, 253 U.S. 17, 24 (1920)). In other words, the holding in such

cases would be applied retroactively. 

The state claims that a damage award is barred by the Eleventh

Amendment. It cites Blatchford v. Native Village of Noatak, 501
 Blatchford distinguished its facts from those in Moe where 15

there was federal jurisdiction over a state tax injunction action

brought by an Indian tribe. Blatchford suggested that such

actions do not implicate the Eleventh Amendment when brought

against state officers rather than the state itself. 501 U.S. at

785 n. 3. (Moe held that the Tax Injunction Act, 28 U.S.C. §

1341, did not deprive federal courts of jurisdiction over tax

injunction claims brought by Indian tribes, because Congress had

separately provided for jurisdiction over tribal claims in 28

U.S.C. § 1362. 425 U.S. at 472-75).

16

U.S. 775 (1991), in which the Supreme Court held that the Eleventh

Amendment would bar damage claims brought by Indian tribes against a

state. The Eleventh Amendment does not bar suits brought by the United 15

States on behalf of Indian tribes or their members, however. United States

v. Minnesota, 270 U.S. 181, 195 (1926); United States v. Board of Comm'rs

of Osage County, 251 U.S. 128, 133 (1919). The Blatchford Court recognized

that the tribal claims would not have been barred if brought by the United

States, but held that tribal access to federal court was not as broad.

Blatchford, 501 U.S. at 783-84. The Eleventh Amendment does not apply in

the Cheyenne River case because the United States brought the action.

The state also argues that damages should be denied because payment

of the taxes was required by tribal law and thus was not coerced by the

state. A 1987 resolution incorporated into tribal law certain provisions

of the South Dakota Traffic Code, including the requirement that vehicles

bear valid state license plates. Neither that resolution nor a clarifying

resolution passed in 1990 addressed the payment of the state excise tax or

suggested that its collection from tribal members was valid. The tribal

council has consistently protested the imposition of state motor vehicle

taxes on its members, and has now adopted its own registration system.

 

An additional argument by the state is that the excise taxes were

paid voluntarily and thus cannot be recovered back as a matter of law or

equity. Taxes that are voluntarily paid because of a
17

mistake of law cannot be recovered back, see Security National Bank of

Watertown v. Young, 55 F.2d 616, 619 (8th Cir.), cert. denied, 286 U.S. 551

(1932), but taxes paid under duress or coercion are recoverable, and state

refund procedures do not limit such recovery. McKesson, 496 U.S. at 31;

Board of Comm'rs of Jackson County v. United States, 308 U.S. 343, 350

(1939) (citing Osage County, 251 U.S. 128 and Ward, 253 U.S. 17).

The record related to the nature and amount of the damage claims in

the Cheyenne River case has not been fully developed. There is anecdotal

evidence describing informal protests by several tribal members at the time

of payment, claiming that the tax was paid to avoid criminal penalties, and

suggesting that the state refund procedure is inadequate. These issues

were not reached by the district court because of the mistaken view that

damages were necessarily barred. The judgment should be reversed to the

extent that it eliminated any possibility of damages. On remand the

district court should determine whether damages should be awarded and, if

so, in what amount. 

II.

The Rosebud Sioux Tribe is also a federally recognized Indian tribe,

and the initial history of the Rosebud Indian Reservation parallels that

of the Cheyenne River reservation. Initially part of the Great Sioux

Reservation established by the Fort Laramie Treaty, 15 Stat. 635, the

Rosebud reservation was set apart by the Act of March 2, 1889, 25 Stat.

888, 892. The reservation was diminished by Congressional acts near the

turn of the century, and now consists of Todd County, South Dakota. See

Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 615 (1977). Tribal members

living on allotted lands outside the reservation are considered to be in

Indian country. Id. at 615 n. 48.

On October 3, 1994, the Rosebud Sioux Tribe brought suit in 
 At the time the case was argued on appeal, there was no 16

indication that the case had proceeded any further in district

court. The Secretary has yet to file an answer to the complaint

or to assert any defenses.

18

federal district court against the South Dakota Secretary of Revenue for

declaratory and injunctive relief against the imposition of state motor

vehicle excise taxes and registration fees on Indians residing on the

reservation. The case was assigned to the same judge before whom the

Cheyenne River action was pending. The Secretary filed a motion to

dismiss, and the tribe moved for a preliminary injunction. 

On February 23, 1995, the same day that judgment was entered in the

Cheyenne River case, the district court held a hearing on the motions in

the Rosebud case. On May 23, 1995 it issued an opinion and order denying

the Secretary's motion to dismiss, partially granting and partially denying

the tribe's request for a preliminary injunction, and transferring the case

to another judge. The opinion and order was short, and the court did not

make detailed findings or discuss the basis for its disposition. 

The district court's opinion recognized that the issues were similar

to those raised in the Cheyenne River case. It granted a preliminary

injunction against the collection of the motor vehicle registration fee

from tribal members who drive only within the undiminished portion of the

Rosebud reservation, but denied the tribe's motion in all other respects.

It did not specifically enjoin the collection of the excise tax from tribal

members living on the reservation, and the tribe filed this interlocutory

appeal from that partial denial of its motion.16

The Rosebud tribe argues that the reasoning in the Cheyenne River

case should apply to Indians residing on the Rosebud reservation and that

the district court erred by failing to enter an injunction against the

collection of excise taxes. The tribe
 The Rosebud tribe also seeks entry of judgment in its 17

favor on the excise tax issue, but the only issues before us on

this interlocutory appeal relate to the injunction. 

19

argues that the order is inconsistent with the Cheyenne River judgment

because it did not enjoin the state from continuing to collect excise taxes

from members of the Rosebud tribe living on the reservation. The Secretary

responds that the district court did not abuse its discretion when it

partially denied the motion for a preliminary injunction and that the

merits of the underlying action are not an issue on appeal. 

The issue on this interlocutory appeal is whether the district court

abused its discretion or committed an error of law. See Dakota Indus., 17

Inc. v. Dakota Sportswear, Inc., 988 F.2d 61, 63 (8th Cir. 1993). Although

the order would be easier to review if it contained more detailed findings

and reasoning, it appears that the earlier ruling in the Cheyenne River

case was a major factor in the court's thinking. The same judge had

entered a declaratory judgment in that case three months before, holding

that South Dakota could not impose its motor vehicle excise tax on tribal

members living on the reservation. In its opinion in that case, the

district court denied injunctive relief since there was "no reason to

believe the defendants will not comply with the requirements of this

decision." Implicit in its Rosebud ruling is a similar assumption that the

state was complying with the requirements of the Cheyenne River decision

and had stopped collecting excise taxes from tribal members living on

reservations. Injunctive relief is unnecessary where there is no showing

of irreparable harm, and nothing in the record suggests that South Dakota

continues to collect the excise tax from tribal members residing on Indian

reservations. The tribe has not shown that the grant of only partial

relief was an abuse of discretion or clearly erroneous. 
20

III.

In conclusion, the judgment entered in the Cheyenne River case is

affirmed in part and reversed in part and remanded for consideration of the

remaining damages issues. The order granting partial injunctive relief in

the Rosebud case is affirmed.

ROSS, Circuit Judge, concurring in part and dissenting in part. 

I concur in the majority opinion to the extent that it concludes the

State of South Dakota has the authority to impose an annual motor vehicle

registration fee on Native Americans who live within the boundaries of a

reservation. S.D. Codified Laws Ann. § 32-5-5. I dissent, however, with

respect to the majority's conclusion that the State lacks the authority to

impose the motor vehicle excise tax set forth in S.D. Codified Laws Ann.

§ 32-5B-1. In my opinion, the excise tax is indistinguishable from a sales

tax levied on the sale of motor vehicles, and as such is a valid state tax

on a non-reservation transaction. I also dissent from the majority's

determination that the State of South Dakota must refund the taxes

previously paid.

The South Dakota motor vehicle excise tax is a one-time tax based on

the purchase price of a motor vehicle, and is collected by the county when

application is made for a South Dakota motor vehicle title. S.D. Codified

Laws Ann. § 32-5B-10. It is clear that all of the sales occur outside the

reservation. Although the majority attempts to distinguish the excise tax

from a sales tax based on the fact that the excise tax is collected at the

time of registration by a government employee, as opposed to at the time

of sale by the seller, the excise tax and its method of collection are

virtually identical to the taxes imposed upon the disposition of motor

vehicles by every other state within our circuit. In all cases, the taxes

operate in a similar fashion, yet are given various labels. While each of

the seven states within our circuit
 Although Arkansas and Missouri do not have Indian 18

reservations within their borders, I note that both of these

states impose and collect sales taxes on the disposition of motor

vehicles in a manner identical to that of their sister states. 

The State of Arkansas imposes a "gross receipts tax" on the sale

of motor vehicles. Ark. Code Ann. § 26-52-510. This tax is

"paid by the consumer to the Director of the Department of

Finance and Administration instead of being collected by the

dealer or seller, . . . at the time of registration." Id. § 26-

52-510(a)(1)(A). Similarly, the State of Missouri imposes a

"sales" tax upon the sale of a motor vehicle. The tax is not

collected by the seller but by the state department of revenue at

the time of registration. Mo. Rev. Stat. §§ 144.069, 144.070.

21

levy similar taxes, I will discuss only those five states, including South

Dakota, that also have a reservation within their borders.18

The State of Nebraska imposes a one-time "sales" tax, based on the

purchase price of the motor vehicle. Neb. Rev. Stat. § 77-2703(1)(i).

Although called a "sales" tax, the tax is not collected by the retailer at

the time of the sales transaction, as is the case with retail sales in

general. Id. § 77-2703(1)(a). Instead, the motor vehicle sales tax is

collected by a county official at the time the vehicle is registered.

The State of North Dakota imposes a one-time "excise" tax based on

the purchase price of the motor vehicle. N.D. Cent. Code § 57-40.3-02.

Again, the tax is collected by the director of the department of

transportation at the time of vehicle registration. Id. § 57-40.3-12.

Because of the imposition of the motor vehicle excise tax, the sale of

motor vehicles is specifically exempted from North Dakota's sales tax. Id.

§ 57-39.2-04(13). 

The State of Iowa calls its one-time tax upon the sale of motor

vehicles a "use" tax, Iowa Code Ann. § 423.7, even on the in-state

purchases of motor vehicles. The tax is collected by the county treasurer

at the time of vehicle registration. Id. § 423.7. Because of the

imposition of this use tax, the sale of motor vehicles is specifically

exempted from Iowa's sales tax. Id.
22

§ 422.45(4).

Finally, the State of Minnesota imposes a one-time tax called a

"sales tax on motor vehicles." Minn. Stat. Ann. § 297B.02. The tax is

based on the purchase price of the motor vehicle and is collected by the

motor vehicle registrar, not by the seller at the time of sale. Id.

§ 297B.11. As with the other states in our circuit, Minnesota has

reciprocity with other states in the form of a use tax, applicable, in

part, to out-of-state purchases. Id. § 297B.08. Again, because of the tax

imposed under § 297B.02, the sale of motor vehicles is specifically

exempted from the general sales taxes levied under § 297A. Id. § 297B.13.

A particularly interesting point to note regarding Minnesota's motor

vehicle tax, is that prior to 1994, what is now denominated a "sales tax

on motor vehicles" was labeled a "motor vehicle excise tax." The 1994

amendment modified only the label ascribed to the tax, leaving the taxing

scheme otherwise unchanged. 

The majority attempts to distinguish the taxing scheme found to be

valid in Tunica-Biloxi Tribe v. Louisiana, 964 F.2d 1536 (5th Cir. 1992),

noting as significant that "Tunica involved a Louisiana tax on the 'sale

at retail' of any item of property within the state." Ibid. at 9-10.

Regardless of the label given to the tax by the Louisiana legislature,

however, Louisiana's taxing scheme is virtually identical to every other

motor vehicle taxing scheme within our circuit. Relying exclusively on

form rather than substance, the majority overlooks the fact that Louisiana

sales tax on motor vehicles is collected, not by the seller at the time of

the sale, but by the "vehicle commissioner as the agent of the collector

of revenue at the time of application for a certificate of title or vehicle

registration license." La. Rev. Stat. Ann. § 47:303B(1).

The majority's attempt to distinguish the Louisiana tax from the

South Dakota tax is simply unavailing. The majority's only
23

noted distinction between the two taxes is that "[p]urchasers from outside

Louisiana could also be subject to the sales tax unlike the South Dakota

tax which is not applied to out-of-state purchasers." Ibid. at 10. This

is a distinction without basis. Both the South Dakota and the Louisiana

taxes are identical in that neither differentiates between resident or nonresident purchasers in the imposition of their respective taxes. Instead,

both resident and non-resident purchasers must pay the tax at the time the

vehicle is registered in either South Dakota or Louisiana, unless the

purchaser can show that the tax has been paid to another state. This is

simply the use tax component of a typical sales tax scheme and in no way

detracts from its characterization as a sales tax. But for the label

attributed to the taxes, Tunica is indistinguishable from the case now

before us.

I also disagree with the majority that the South Dakota excise tax

resembles the personal property taxes found to be invalid in Oklahoma Tax

Comm'n v. Sac and Fox Nation, 508 U.S. 114 (1993); Washington v.

Confederated Tribes of Colville Indian Reservation, 447 U.S. 134 (1980);

and Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463 (1976).

In both Colville and Moe, the court invalidated the imposition of taxes

assessed annually at a percentage of market value of the vehicles.

Rejecting the State of Washington's attempt to exalt form over substance,

the Court noted that "the only difference between the taxes [in Colville]

and the one struck down in Moe is that [the former] are called excise taxes

and imposed for the privilege of using the vehicle in the State, while the

Montana tax was labeled a personal property tax." Colville, 447 U.S. at

163. The important distinction between the taxes in Colville and Moe and

the South Dakota excise tax, is that the taxes in Colville and Moe were

annual taxes contingent upon the continued ownership of a motor vehicle.

In sharp contrast, the tax at issue here is a one-time tax triggered upon

the disposition of a motor vehicle. Colville and Moe simply are not

controlling in the present case.
 Oklahoma's "sales" tax levied on motor vehicles was not 19

challenged in Sac and Fox.

24

Sac and Fox is also distinguishable from the case now before us. The

Supreme Court noted as significant several times throughout its discussion

that the excise tax at issue in Sac and Fox was paid "in addition to the

state sales tax," 508 U.S. at 119, 126, 127. Accordingly, the Court

19

rejected the state's argument that the excise tax resembled a sales tax on

transactions occurring outside Indian country. Id. at 126. Just the

opposite is true here, where South Dakota law specifically states that the

excise tax "shall be in lieu of any tax levied . . . on the sales of such

vehicles." S.D. Codified Laws Ann. § 32-5B-1. Unlike Sac and Fox, the

South Dakota motor vehicle excise tax is meant to be in lieu of the state's

sales tax, not to augment it. 

In my view, the majority relies upon distinctions without substance

in concluding that the excise tax is not the equivalent of a sales tax.

First, the majority finds significant the fact that the tax is not

collected by the automobile dealer at the time of the sale, but instead is

collected by the county treasurer at the time application is made for a

South Dakota motor vehicle title. As previously stated, however, this

procedure in tax collection is the same procedure used by all of the states

within our circuit, including those that call the tax a "sales" tax. 

Second, the majority makes much of the fact that "the tax does not

apply to all motor vehicle sales in the state, but only to those resulting

in ownership by a South Dakota resident," and "[c]onversely, the excise tax

does apply to vehicles purchased out of state by South Dakota residents."

Ibid. at 9. What the majority describes, however, is simply the

complementary use tax element of a retail sales tax scheme. See, e.g., La.

Rev. Stat. Ann. § 47:303A(3); Minn. Stat. Ann. §§ 297A.14(1), (2), 297B.08;

Neb. Rev. Stat. § 77-2703(2). The existence of a use tax within
25

the state's taxing scheme does not nullify, or in any way alter, the nature

of its sales tax. 

South Dakota's excise tax is the equivalent of a sales tax on motor

vehicles. The fact that the tax is applied only to motor vehicles and not

the general sale of personal property does not alter the substance of the

tax in any way. My concern with the holding adopted by the majority today

is the far-reaching ramifications this decision is sure to have on the

taxing schemes of other states within our circuit, and conceivably in other

circuits as well. Each of the remaining four states within our circuit,

which also have Indian reservations within their boundaries, impose motor

vehicle taxes virtually identical to that struck down by our court today.

As with South Dakota, the remaining four states impose a one-time tax;

based on the purchase price of the motor vehicle; imposed in lieu of the

general retail sales tax; collected not by the retailer at the time of

sale, but by a county official at the time of registration; and have

complementary use tax provisions. Two of the four states now call their

one-time tax a "sales" tax, although identical in all other respects to the

"use" or "excise" taxes of their sister states. The question is whether

this difference in nomenclature will be sufficient to withstand our court's

scrutiny?

By failing to recognize the similarities between Louisiana and South

Dakota's taxing schemes, the majority now creates a split among the

circuits with regard to the validity of taxing the off-reservation sales

of motor vehicles. Further, by failing to recognize the distinct method

of collecting motor vehicle sales taxes, as opposed to other retail sales

taxes, by every state in our circuit and possibly the majority of states

across this country, our court today takes a step toward a blanket

invalidation of sales taxes on the off-reservation purchases of motor

vehicles. This clearly intrudes upon the Supreme Court's affirmation that

"Indians going beyond reservation boundaries have generally been
26

held subject to non-discriminatory state law otherwise applicable to all

citizens of the State," including its state tax laws. Mescalero Apache

Tribe v. Jones, 411 U.S. 145, 148-49 (1973). 

Because it is my opinion that the South Dakota excise tax functions

as a valid sales tax of off-reservation transactions, I would uphold S.D.

Codified Laws Ann. § 32-5B-1. Accordingly, I respectfully dissent from the

majority opinion to the extent that it concludes otherwise. I note that

the other states within our circuit may wish to seek leave to file amicus

briefs in the event a petition for rehearing is requested and granted in

this case.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.