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Matched Legal Cases: ['§ 8', '§ 51', '§ 450', '§ 8', '§ 141', '§ 141', '§ 274', '§ 274', '§ 274', '§ 274', '§ 14', '§ 274', '§ 274', '§ 7', '§ 274', '§ 274', '§ 274', '§ 274']

Ramah Navajo Sch Bd Inc Vs Bureau of Rev - Citation 105166 - Court Judgment | LegalCrystal
Ramah Navajo Sch. Bd., Inc. Vs. Bureau of Rev. - Court Judgment
LegalCrystal Citation legalcrystal.com/105166
Case Number 458 U.S. 832
Appellant Ramah Navajo Sch. Bd., Inc.
Respondent Bureau of Rev.
ramah navajo sch. bd., inc. v. bureau of rev. - 458 u.s. 832 (1982) u.s. supreme court ramah navajo sch. bd., inc. v. bureau of rev., 458 u.s. 832 (1982) ramah navajo school board, inc. v. bureau of revenue no. 80-2162 argued april 28, 1982 decided july 2, 1982 458 u.s. 832 appeal from the court of appeals of new mexico syllabus held: federal law preempts new mexico's tax imposed on the gross receipts that appellant non-indian construction company received from appellant tribal school board for the construction of a school for indian children on the reservation. white mountain apache tribe v. bracker, 448 u. s. 136 , controlling. pp. 458 u. s. 836 -847. (a) in view of the federal and tribal.....
Ramah Navajo Sch. Bd., Inc. v. Bureau of Rev. - 458 U.S. 832 (1982)
U.S. Supreme Court Ramah Navajo Sch. Bd., Inc. v. Bureau of Rev., 458 U.S. 832 (1982)
Held: Federal law preempts New Mexico's tax imposed on the gross receipts that appellant non-Indian construction company received from appellant tribal school board for the construction of a school for Indian children on the reservation. White Mountain Apache Tribe v. Bracker, 448 U. S. 136 , controlling. Pp. 458 U. S. 836 -847.
(a) In view of the federal and tribal interests arising from Congress' broad power to regulate tribal affairs under the Indian Commerce Clause, Art. I, § 8, cl. 3, and from the semi-autonomous status of Indian tribes, the exercise of state authority over commercial activity on an Indian reservation may be preempted by federal law, or it may interfere with the tribe's ability to exercise its sovereign functions. Traditional notions of tribal sovereignty, and the recognition and encouragement of such sovereignty in congressional Acts promoting tribal independence and economic development, inform the preemption analysis. Ambiguities in federal law should be construed generously, and federal preemption is not limited to those situations where Congress has explicitly announced an intention to preempt state activity. Pp. 458 U. S. 837 -839.
scheme regulating the creation and maintenance of educational opportunities for Indian children and on the express federal policy of encouraging Indian self-sufficiency in the area of education. Pp. 458 U. S. 839 -845.
(c) Preemption analysis in this area need not be modified by applying a new approach relying on the Indian Commerce Clause. Existing preemption analysis governing this type of case provides sufficient guidance to state courts, and also allows for more flexible consideration of the federal, state, and tribal interests at issue. Pp. 458 U. S. 845 -846.
MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, BLACKMUN, POWELL, and O'CONNOR, JJ., joined. REHNQUIST, J., filed a dissenting opinion, in which WHITE and STEVENS, JJ., joined, post, p. 458 U. S. 847 .
Approximately 2,000 members of the Ramah Navajo Chapter of the Navajo Indian Tribe live on tribal trust and allotment lands located in west central New Mexico. Ramah Navajo children attended a small public high school near the reservation until the State closed this facility in 1968. Because there were no other public high schools reasonably close to the reservation, the Ramah Navajo children were forced either to abandon their high school education or to attend federal Indian boarding schools far from the reservation. In 1970, the Ramah Navajo Chapter exercised its authority under Navajo Tribal Code, Title 10, § 51 (1969), and established its own school board in order to remedy this situation. Appellant Ramah Navajo School Board, Inc. (the Board), was organized as a nonprofit corporation to be operated exclusively by members of the Ramah Navajo Chapter. The Board is a Navajo "tribal organization" within the meaning of 25 U.S.C. § 450b(c), 88 Stat. 2204. With funds provided by the federal Bureau of Indian Affairs (BIA) and the Navajo Indian Tribe, the Board operated a school in the abandoned public school facility, thus creating the first independent Indian school in modern times. [ Footnote 1 ]
In 1972, the Board successfully solicited from Congress funds for the design of new school facilities. Pub.L. 9269, 86 Stat. 510. The Board then contracted with the BIA for the design of the new school and hired an architect. In 1974, the Board contracted with the BIA for the actual construction of the new school to be built on reservation land. Funding for the construction of this facility was provided by a series of congressional appropriations specifically earmarked for this purpose. [ Footnote 2 ] The contract specified that the Board was the design and building contractor for the project, but that the Board could subcontract the actual construction work to third parties. The contract further provided that any subcontracting agreement would have to include certain clauses governing pricing, wages, bonding, and the like, and that it must be approved by the BIA.
McClanahan v. Arizona State Tax Comm'n, 411 U. S. 164 , 411 U. S. 165 (1973). Although there is no definitive formula for resolving the question whether a State may exercise its authority over tribal members or reservation activities, we have recently identified the relevant federal, tribal, and state interests to be considered in determining whether a particular exercise of state authority violates federal law. See White Mountain, 448 U.S. at 448 U. S. 141 -145.
In White Mountain, we recognized that the federal and tribal interests arise from the broad power of Congress to regulate tribal affairs under the Indian Commerce Clause, Art. I, § 8, cl. 3, and from the semi-autonomous status of Indian tribes. 448 U.S. at 448 U. S. 142 . These interests tend to erect two "independent but related" barriers to the exercise of state authority over commercial activity on an Indian reservation: state authority may be preempted by federal law, or it may interfere with the tribe's ability to exercise its sovereign functions. Ibid. (citing, inter alia, Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U. S. 685 (1965); McClanahan v. Arizona State Tax Comm'n, supra; and Williams v. Lee, 358 U. S. 217 (1959)). As we explained in White Mountain:
448 U. S. 143 (quoting McClanahan v. Arizona State Tax Comm'n, supra, at 411 U. S. 172 ).
The State's interest in exercising its regulatory authority over the activity in question must be examined and given appropriate weight. Preemption analysis in this area is not controlled by "mechanical or absolute conceptions of state or tribal sovereignty"; it requires a particularized examination of the relevant state, federal, and tribal interests. 448 U.S. at 448 U. S. 145 . The question whether federal law, which reflects the related federal and tribal interests, preempts the State's exercise of its regulatory authority is not controlled by standards of preemption developed in other areas. Id. at 448 U. S. 143 -144. Instead, the traditional notions of tribal sovereignty, and the recognition and encouragement of this sovereignty in congressional Acts promoting tribal independence and economic development, inform the preemption analysis that governs this inquiry. See id. at 448 U. S. 143 , and n. 10. Relevant federal statutes and treaties must be examined in light of "the broad policies that underlie them and the notions of sovereignty that have developed from historical traditions of tribal independence." Id. at 448 U. S. 144 -145. As a result, ambiguities in federal law should be construed generously, and federal preemption is not limited to those situations where Congress has explicitly announced an intention to preempt state activity. Id. at 448 U. S. 143 -144, 448 U. S. 150 -151.
In White Mountain, we applied these principles and held that federal law preempted application of the state motor carrier license and use fuel taxes to a non-Indian logging company's activity on tribal land. We found the federal regulatory scheme for harvesting Indian timber to be so pervasive that it precluded the imposition of additional burdens by the relevant state taxes. Id. at 448 U. S. 148 . The Secretary of the Interior (Secretary) had promulgated detailed regulations for developing " I ndian forests by the Indian people for the purpose of promoting self-sustaining communities.'" Id. at 448 U. S. 147 (quoting 25 CFR § 141.3(a)(3) (1979)).
Under these regulations, the BIA was involved in virtually every aspect of the production and marketing of Indian timber. 448 U.S. at 448 U. S. 145 -148. In particular, the Secretary and the BIA extensively regulated the contractual relationship between the Indians and the non-Indians working on the reservation: they established the bidding procedure, set mandatory terms to be included in every contract, and required that all contracts be approved by the Secretary. Id. at 448 U. S. 147 .
Id. at 448 U. S. 149 (quoting 25 CFR § 141.3(a)(3) (1979)). We concluded that the imposition of state taxes would also undermine the Secretary's ability to carry out his obligations to set fees and rates for the harvesting and sale of the timber, and it would impede the "Tribe's ability to comply with the sustained-yield management policies imposed by federal law." 448 U.S. at 448 U. S. 149 -150. Balanced against this intrusion into the federal scheme, the State asserted only "a general desire to raise revenue" as its justification for imposing the taxes. Id. at 448 U. S. 150 . In this context, this interest is insufficient to justify the State's intrusion into a sphere so heavily regulated by the Federal Government. Ibid.
This case is indistinguishable in all relevant respects from White Mountain. Federal regulation of the construction and financing of Indian educational institutions is both comprehensive and pervasive. The Federal Government's concern with the education of Indian children can be traced back to the first treaties between the United States and the Navajo Tribe. [ Footnote 3 ] Since that time, Congress has enacted numerous
schools now controlled and operated by tribes or tribally approved Indian organizations." 25 CFR § 274.1 (1981). Under these regulations, the BIA has wide-ranging authority to monitor and review the subcontracting agreements between the Indian organization, which is viewed as the general contractor, and the non-Indian firm that actually constructs the facilities. See 25 CFR § 274.2 (1981). [ Footnote 4 ] Specifically, the BIA must conduct preliminary on-site inspections, and prepare cost estimates for the project in cooperation with the tribal organization. 25 CFR § 274.22 (1981). The Board must approve any architectural or engineering agreements executed in connection with the project. 25 CFR § 274.32(c) (1981). In addition, the regulations empower the BIA to require that all subcontracting agreements contain certain terms, ranging from clauses relating to bonding and pay scales, 41 CFR § 14H-70.632 (1981), to preferential treatment for Indian workers. 25 CFR § 274.38 (1981). Finally, to ensure that the Tribe is fulfilling its statutory obligations, the regulations require the tribal organization to maintain records for the Secretary's inspection. 25 CFR § 274.41 (1981).
This detailed regulatory scheme governing the construction of autonomous Indian educational facilities is at least as comprehensive as the federal scheme found to be preemptive in White Mountain. [ Footnote 5 ] The direction and supervision provided
by the Federal Government for the construction of Indian schools leave no room for the additional burden sought to be imposed by the State through its taxation of the gross receipts paid to Lembke by the Board. This burden, although nominally falling on the non-Indian contractor, necessarily impedes the clearly expressed federal interest in promoting the "quality and quantity" of educational opportunities for Indians by depleting the funds available for the construction of Indian schools. [ Footnote 6 ]
The Bureau of Revenue argues that imposition of the state tax is not preempted, because the federal statutes and regulations do not specifically express the intention to preempt this exercise of state authority. This argument is clearly foreclosed by our precedents. In White Mountain, we flatly rejected a similar argument. 448 U.S. at 448 U. S. 150 -151 (citing Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U. S. 685 (1965); Williams v. Lee, 358 U. S. 217 (1959); and Kennerly v. District Court of Montana, 400 U. S. 423 (1971)). There is nothing unique in the nature of a gross receipts tax or in the federal laws governing the development of tribal self-sufficiency in the area of education that requires a different analysis.
In this case, the State does not seek to assess its tax in return for the governmental functions it provides to those who must bear the burden of paying this tax. Having declined to take any responsibility for the education of these Indian children, the State is precluded from imposing an additional burden on the comprehensive federal scheme intended to provide this education -- a scheme which has "left the State with no duties or responsibilities." Warren Trading Post Co. v. Arizona Tax Comm'n, supra, at 380 U. S. 691 . [ Footnote 7 ] Nor has the State asserted any specific, legitimate regulatory interest to justify the imposition of its gross receipts tax. The only arguably
specific interest advanced by the State is that it provides services to Lembke for its activities off the reservation. This interest, however, is not a legitimate justification for a tax whose ultimate burden falls on the tribal organization. [ Footnote 8 ] Furthermore, although the State may confer substantial benefits on Lembke as a state contractor, we fail to see how these benefits can justify a tax imposed on the construction of school facilities on tribal lands pursuant to a contract between the tribal organization and the non-Indian contracting firm. [ Footnote 9 ] The New Mexico gross receipts tax is intended to compensate the State for granting "the privilege of engaging in business." N.M.Stat.Ann. §§ 7-9(F) and 7-9(A) (1980). New Mexico has not explained the source of its power to levy such a tax in this case, where the "privilege of doing business" on an Indian reservation is exclusively bestowed by the Federal Government.
The State's ultimate justification for imposing this tax amounts to nothing more than a general desire to increase revenues. This purpose, as we held in White Mountain, 448 U.S. at 448 U. S. 150 , is insufficient to justify the additional burdens imposed by the tax on the comprehensive federal scheme regulating the creation and maintenance of educational opportunities for Indian children and on the express federal policy of encouraging Indian self-sufficiency in the area of education. [ Footnote 10 ] This regulatory scheme precludes any state tax that "stands as an obstacle to the accomplishment of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U. S. 52 , 312 U. S. 67 (1941).
White Mountain, supra, at 448 U. S. 144 ; see also McClanahan v. Arizona State Tax Comm'n, 411 U.S. at 411 U. S. 174 -175, and n. 13; Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U.S. at 380 U. S. 690 -691. This guiding principle helps relieve the tension between emphasizing the pervasiveness of federal regulation and the federal policy of encouraging Indian self-determination. Although we must admit our disappointment that the courts below apparently gave short shrift to this principle and to our precedents in this area, we cannot and do not presume that state courts will not follow both the letter and the spirit of our decisions in the future.
JUSTICE REHNQUIST asserts that the comprehensive federal regulatory scheme outlined above "do[es] not regulate school construction, which is the activity taxed." Post at 458 U. S. 851 . The dissent fails to explain, however, how this fact distinguishes this case from White Mountain. In that case, we struck down Arizona's use fuel tax and motor carrier license tax not because of any federal interest in gasoline, licenses, or highways, but because the imposition of these state taxes on a non-Indian contractor doing work on the reservation was preempted by the "comprehensive regulation of the harvesting and sale of tribal timber." 448 U.S. at 448 U. S. 151 . We find that New Mexico is similarly precluded from impeding the federal interest in the construction of autonomous Indian educational institutions by imposing its gross receipts tax on Lembke. JUSTICE REHNQUIST's contention that the New Mexico tax is somehow compatible with this federal interest because such taxes "are as much a normal cost of school construction as the cost of cement and labor," post at 458 U. S. 855 , is also foreclosed by White Mountain. Surely, state use fuel and motor carrier license taxes are considered part of the cost of harvesting and marketing timber. Yet in White Mountain, we concluded that these taxes impeded the federal interest in "guaranteeing Indians that they will receive . . . the benefit of whatever profit [the forest] is capable of yielding,'" 448 U.S. at 448 U. S. 149 , despite the dissent's argument that the taxes amounted to less than 1% of the annual profits produced by the logging operation. Here, as in White Mountain, JUSTICE REHNQUIST continues to press this argument.
Appellee would have us impute congressional awareness and approval of the state gross receipts tax from appropriations bills which earmarked funds for the construction of these facilities, see n 2, supra. Brief for Appellee 21-22. Appellee strains to find this awareness and approval by arguing that the same architects who prepared the cost estimates and requests that the Board submitted to Congress also prepared the bid specifications pursuant to which Lembke submitted its bid. However, as we have indicated, the bid specifications only required prospective bidders to include "all taxes required by law," and the submitted bids did not specify the gross receipts tax as a separate line item. Supra at 458 U. S. 835 . Therefore, it is by no means clear, and the Board disputes the contention, that the Board ever intended to have these state taxes included in the construction costs of its school facilities. Furthermore, there is absolutely no indication that Congress was even made aware of the existence of these taxes when it appropriated funds for the construction of the Ramah Navajo school. In any event, as we have noted in a related context, courts should be wary of inferring congressional intent to alter the force of existing law from an appropriations Act. Cf. TVA v. Hill, 437 U. S. 153 , 437 U. S. 189 -191 (1978).
The Bureau of Revenue invites us to adopt the "legal incidence" test, under which the legal incidence and not the actual burden of the tax would control the preemption inquiry. Of course, in some contexts, the fact that the legal incidence of the tax falls on a non-Indian is significant. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134 , 447 U. S. 150 -151 (1980); Moe v. Salish & Kootenai Tribes, 425 U. S. 463 (1976). However, in White Mountain, 448 U.S. at 448 U. S. 151 , we found it significant that the economic burden of the asserted taxes would ultimately fall on the Tribe, even though the legal incidence of the tax was on the non-Indian logging company. Given the comprehensive federal regulatory scheme at issue here, we decline to allow the State to impose additional burdens on the significant federal interest in fostering Indian-run educational institutions, even if those burdens are imposed indirectly through a tax on a non-Indian contractor for work done on the reservation.
The Court today reproves the New Mexico Court of Appeals for failing to heed our precedents, much as a disappointed parent would rebuke a wayward child. [ Footnote 2/1 ] I do not think the Court of Appeals deserves the rebuke; it seems to me that the state court applied our precedents at least as faithfully, and coherently, as the Court itself. In its desire to reach a result that it evidently finds quite salutary as a matter of policy, the Court finds "indistinguishable" a case that is considerably off the mark, and it finds "pervasively regulated" an activity that is largely free of federal regulation. It ultimately accords a dependent Indian tribal organization greater tax immunity than it accorded the sovereignty of the United States a short three months ago in a case involving the precise state taxes at issue here.
The principles announced in White Mountain Apache Tribe v. Bracker, 448 U. S. 136 (1980), are consistent with this trend. [ Footnote 2/2 ] Thus, the Court in White Mountain recognized federal preemption as a principal barrier to the assertion of state regulatory authority over tribal reservations and members, id. at 448 U. S. 142 , and specifically invalidated the challenged assertion of taxing authority on that basis, id. at 448 U. S. 148 , 448 U. S. 151 , n. 15. The Court also recognized that, in some instances, a state law may be invalid because it infringes " the right of reservation Indians to make their own laws and be ruled by them.'" Id. at 448 U. S. 142 (quoting Williams v. Lee, 358 U. S. 217 , 358 U. S. 220 (1959)). But apart from those rare instances in which the State attempts to interfere with the residual sovereignty of a tribe to govern its own members, the "tradition of tribal sovereignty" merely provides a "backdrop" against which the preemptive effect of federal statutes or treaties must be assessed. See 448 U.S. at 448 U. S. 143 .
The Court declares that "[t]his case is indistinguishable in all relevant respects from White Mountain. " Ante at 458 U. S. 839 . This statement is quite inaccurate. White Mountain involved an attempt by the State of Arizona to apply its motor carrier license and use fuel taxes to the logging operations of a non-Indian company doing business exclusively on the reservation. The Court concluded that application of the State's taxes was inconsistent with the pervasive federal regulation of the very activity subject to taxation. The Court repeatedly emphasized the comprehensiveness of the regulations on which it relied.
448 U.S. at 448 U. S. 147 -148.
But the Court in White Mountain did not merely review the comprehensiveness of the regulations and conclude, ipso facto, that state taxes on the logging operations were preempted. It found, with considerable attention to specifics, that "the assessment of state taxes would obstruct federal policies." Id. at 448 U. S. 148 .
Id. at 448 U. S. 149 -150.
As noted, the Court thinks that this case is "indistinguishable in all relevant respects from White Mountain. " Ante at 458 U. S. 839 . It finds that "[f]ederal regulation of the construction and financing of Indian educational institutions is both comprehensive and pervasive." Ibid. But the regulations on which the Court relies do not regulate school construction, which is the activity taxed. They merely detail procedures by which tribes may apply for federal funds in order to carry out school construction.
The purpose of the regulations, which the Court quotes only in part, ante at 458 U. S. 840 -841,
" is to give the application and approval process for obtaining a contract or services from the Bureau for school construction for previously private schools now controlled and operated by tribes or tribally approved Indian organizations. . . ."
25 CFR § 274.1 (1981) (emphasis added). The regulations that follow explain the procedures by which tribes may obtain, complete, and file application forms for federal funding or services. §§ 274.12-274.18. As the Court observes, ante at 458 U. S. 841 , the regulations also authorize the BIA to approve or disapprove plans and specifications for construction as well as construction contracts let by the tribe, which are treated as subcontracts of the funding contract between the tribe and the BIA. The contracts are required to contain a clause establishing a hiring preference for Indians. § 274.38. And the BIA is given access to the tribe's records for auditing purposes. § 274.41. That is the extent of the regulations.
It also approved the Board's construction "subcontract" with the construction contractor. It played no role in the selection of the contractor, and it played no role in regulating or supervising the actual construction of the school. The Court concludes that this scheme, which is little more than a grant application process, "is at least as comprehensive as the federal scheme found to be preemptive in White Mountain. " Ante at 458 U. S. 841 . I simply cannot agree.
Ante at 458 U. S. 841 -842. This statement constitutes the sum total of the Court's preemption analysis in this case. In White Mountain, the Court engaged in a detailed examination of the extent to which state taxes would interfere both with the Secretary's ability to carry out his congressional mandate and with the tribe's ability to carry out federal policy. In the place of such careful analysis, the Court today relies on ipse dixit. It does so because there is no realistic basis for concluding that the State's taxes would interfere with a "pervasive" regulatory scheme. The BIA simply does not regulate the construction activity which the State seeks to tax. It provides federal money to eligible tribes and tribal organizations and it establishes a contract approval and auditing mechanism as a means of attempting to ensure that the money is put to the use for which it is earmarked. [ Footnote 2/3 ]
"impedes the clearly expressed federal interest in promoting the 'quality and quantity' of educational opportunities for Indians by depleting the funds available for the construction of Indian schools. "
Ante at 458 U. S. 844 , n. 8.
The Court in White Mountain did indeed note that "the economic burden of the asserted taxes will ultimately fall on the Tribe." 448 U.S. at 448 U. S. 151 . But in a footnote immediately following that sentence, which is today ignored, the Court declared:
Id. at 448 U. S. 151 , n. 15.
Despite its references to the supposed "comprehensive and pervasive" regulatory scheme in this case, the Court clearly has chosen to bar the State from taxing Lembke's gross receipts principally because the tax imposes an indirect economic burden on the tribal organization. As the Court in White Mountain recognized, our precedents undeniably view that as an insufficient basis for the recognition of an Indian tax immunity. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134 , 447 U. S. 156 (1980) ("Washington does not infringe the right of reservation Indians to make their own laws and be ruled by them,' . . . merely because the result of imposing its taxes will be to deprive the Tribes of revenues which they currently are receiving"); Moe v. Salish & Kootenai Tribes, 425 U. S. 463 , 425 U. S. 481 -482 (1976) (upholding tax on cigarette sales from Indians to non-Indians because the legal incidence of the tax was on the consumer); Mescalero Apache Tribe v. Jones, 411 U. S. 145 , 411 U. S. 156 -157 (1973) (refusing to imply tax immunity despite economic burden on tribal enterprise). [ Footnote 2/4 ] Even under the
United States v. New Mexico, 455 U. S. 720 , 455 U. S. 735 (1982). In reaching this conclusion, we held that
Id. at 455 U. S. 734 . If the legal incidence of the tax is on the contractor, it is to be considered valid, absent specific congressional action, as long as "the contractors can realistically be considered entities independent of the United States." Id. at 455 U. S. 738 . [ Footnote 2/5 ]
an Indian Tribe, whose sovereignty "exists only at the sufferance of Congress and is subject to complete defeasance," United States v. Wheeler, 435 U. S. 313 , 435 U. S. 323 (1978), greater immunity from state taxes than is enjoyed by the sovereignty of the United States on whom it is dependent. [ Footnote 2/6 ]
Ante at 458 U. S. 846 .
The Court ignores other distinctions between this case and White Mountain. For example, the logging contractor in the latter case, although a non-Indian corporation, operated exclusively to harvest timber on the reservation; it conducted no off-reservation activities whatsoever. See 448 U.S. at 448 U. S. 139 . The contractor in this case is a general building contractor doing business throughout the State of New Mexico, and enjoying state services to the same extent as any other commercial enterprise in New Mexico. The Court dismisses this factor with the statement that,
Ante at 458 U. S. 844 , n. 9. The Court's "presumptions," however, are no substitute for the considered judgment of the state taxing authority. Indeed, in assessing the validity of a state tax, the Court has previously recognized that the State's interests are strongest when the taxpayer is the recipient of state services. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134 , 447 U. S. 15 (1980). To the extent presumptions are relevant, the Court has inverted the one that ought to apply.
Another distinction is also relevant. The activity taxed in White Mountain was the exploitation of natural resources located on the reservation and devoted to the beneficial use and enjoyment of reservation Indians. Indeed, over 90% of the total profits generated by tribal enterprises were derived from the Tribe's logging operations. 448 U.S. at 448 U. S. 138 . In this case, the state taxes diminish not the income generated by the Tribe for its own preservation and welfare, but federal funds appropriated by Congress for the purpose of school construction. No tribal funds are devoted to this endeavor, and congressional appropriations were based on funding requests that included the gross receipts tax as part of the estimated construction cost.
455 U.S. at 455 U. S. 742 . In this case, there is no basis for arguing that Lembke has acted merely as a purchasing agent for the Board or the BIA.
Of course, the Court purports to rest its decision on the preemptive effect of federal law. But the immunity of federal contractors from state taxes is also dependent on "generalized notions of federal supremacy." United States v. New Mexico, supra, at 455 U. S. 730 . The critical question, both in United States v. New Mexico and in this case, is what factors will the Court examine to determine whether the State has exceeded limits imposed by the Supremacy Clause and by Congress. I think it is evident that, in the area of federal tax immunity, the Court has required evidence of more than mere economic burdens before it will invalidate a state tax as applied. As this case demonstrates, tribal tax immunity may be invoked on no greater showing than the fact of economic burdens on a federally supported tribal endeavor. Since both immunities derive from precisely the same source -- the supremacy of federal law -- I find the Court's decision today inexplicable.
United States v. New Mexico, supra, at 455 U. S. 735 , n. 11.