Source: http://openjurist.org/print/31300
Timestamp: 2015-04-27 20:50:08
Document Index: 179680252

Matched Legal Cases: ['§ 2281', '§ 2281', '§ 2281', '§ 1253', '§ 2101', '§ 2281', '§ 82', '§ 82', '§ 82', '§ 458', '§ 82', '§ 82', '§ 458', '§ 82', '§ 82', '§ 2281', '§ 1253', '§ 2281', '§ 2281', '§ 2281', '§ 2281', '§ 2281', '§ 2281', '§ 2101', '§ 16', '§ 476']

447 US 134 Washington v. Confederated Tribes of Colville Indian Reservation Washington
447 US 134 Washington v. Confederated Tribes of Colville Indian Reservation Washington 447 U.S. 134
100 S.Ct. 2069
65 L.Ed.2d 10
State of WASHINGTON et al., Appellants,v.CONFEDERATED TRIBES OF the COLVILLE INDIAN RESERVATION et al. State of WASHINGTON v. UNITED STATES et al.
Decided June 10, 1980.*
These cases concern challenges of several Indian Tribes to efforts by the State of Washington to apply various state taxes and other laws to transactions and activities occurring on Indian reservations. Washington imposes a cigarette excise tax on the "sale, use, consumption, handling, possession or distribution" of cigarettes within the State. It also imposes a general retail sales tax on sales of personal property, including cigarettes. The State sought to compel Indian retailers to collect both taxes with respect to sales of cigarettes to non-Indians and the latter tax with respect to sales of other goods as well. In addition, the State sought to apply its motor vehicle excise tax and mobile home, camper, and trailer taxes—which are imposed for the privilege of using the covered vehicles in the State—to vehicles owned by the Tribes or their members and used both on and off the reservation. Finally, the State took steps to assume civil and criminal jurisdiction over the affected reservations. The Indian Tribes involved in this litigation have each adopted ordinances imposing their own taxes upon on-reservation sales of cigarettes. In actions brought in Federal District Court, they sought declaratory and injunctive relief against enforcement of the state sales and cigarette taxes, and in particular against the State's seizure of untaxed cigarettes destined for delivery to the reservations, contending that those taxes could not lawfully be applied to tribal cigarette sales. In addition, the Tribes challenged the State's efforts to apply its vehicle excise taxes to Indian-owned vehicles and asserted that the State's assumption of jurisdiction was invalid. The complaints alleged, inter alia, that the challenged taxes were contrary to the Indian Commerce Clause. Because injunctive relief against enforcement of state statutes was sought, a three-judge District Court was convened pursuant to the then applicable requirement of 28 U.S.C. § 2281 (1970 ed.) that an injunction restraining the enforcement of any state statute shall not be granted by any district court upon the ground of the statute's unconstitutionality unless the application therefor is heard and determined by a three-judge court. After a consolidated proceeding, the District Court held that (1) it had jurisdiction as a three-judge court; (2) the cigarette tax could not be applied to on-reservation transactions because it was preempted by the tribal taxing ordinance and constituted an impermissible interference with tribal self-government; (3) the retail sales tax could not be applied to tribal cigarette sales; (4) the State could not impose certain recordkeeping requirements on the Tribes in connection with various tax-exempt sales; (5) the vehicle excise taxes could not be imposed on vehicles owned by the Tribes and their members; and (6) the State's assumption of civil and criminal jurisdiction over certain of the Tribes was unconstitutional. The court enjoined enforcement of the statutes it had invalidated, and the State moved unsuccessfully for a new trial.
1. The Tribes' Commerce Clause claims are not "insubstantial" and are not rendered inescapably frivolous by the decisions in Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114, and McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129, so as to defeat application of § 2281. In addition, the Tribes' attack on the official seizure of cigarettes bound for the reservations also triggers the three-judge requirement of § 2281. Accordingly, this Court has jurisdiction over the appeals under 28 U.S.C. § 1253, which authorizes a direct appeal to this Court from an order granting an injunction in a suit "required by any Act of Congress to be heard and determined by a district court of three judges." Pp. 145-149.
2. The State's motion for a new trial on issues other than the motor-vehicle-tax and assumption-of-jurisdiction issues rendered nonfinal the disposition of all issues between the parties, and thus the State's appeal from the District Court's resolution of those two issues was timely under 28 U.S.C. § 2101(b), where it was filed within 60 days of the denial of the motion for a partial new trial but more than 60 days after the District Court's decision on those two issues. Accordingly, the appeal from such decision is properly before this Court. Pp. 149-150.
(a) The Tribes have the power to impose their cigarette taxes on nontribal purchases, since the power to tax transactions occurring on trust lands and significantly involving a tribe or its members is a fundamental attribute of sovereignty which the tribes retain unless divested of it by federal law or necessary implication of their dependent status. Here, there is no federal statute showing any congressional departure from the view that tribes have such power, and tribal powers are not implicitly divested by virtue of the tribes' dependent status. Pp. 152-154.
(b) But the Tribes' involvement in the operation and taxation of cigarette marketing on the reservation does not oust the State from any power to exact its sales and cigarette taxes from nonmembers purchasing cigarettes at tribal smokeshops. Principles of federal Indian law, whether stated in terms of pre-emption, tribal self-government, or otherwise, do not authorize Indian tribes to market an exemption from state taxation to persons who would normally do their business elsewhere. Federal statutes, such as the Indian Reorganization Act of 1934, the Indian Financing Act of 1974, and the Indian Self-Determination and Education Assistance Act of 1975, while evidencing a congressional concern with fostering tribal self-government and economic development, do not go so far as to grant tribal enterprises selling goods to nonmembers an artificial competitive advantage over all other businesses in a State. 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 taxes will be to deprive the Tribes of revenues which they currently are receiving. Pp. 154-157.
(f) The State may validly require, as a minimal burden, the tribal smokeshops to affix tax stamps purchased from the State to individual packages of cigarettes prior to the time of sale to nonmembers of the Tribe. Cf. Moe v. Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96. P. 159.
4. The motor vehicle and mobile home, camper, and trailer taxes cannot properly be imposed upon vehicles owned by the Tribes or their members and used both on and off the reservations. Moe, supra. P. 162-164.
5. The District Court erred in holding that the State's assumption of civil and criminal jurisdiction over the Makah and Lummi Reservations was unlawful. Washington v. Yakima Indian Nation, 439 U.S. 463, 99 S.Ct. 740, 58 L.Ed.2d 740, controlling. P. 164.
446 F.Supp. 1339, affirmed in part and reversed in part.
Slade Gorton, Olympia, Wash., for appellants.
Steven S. Anderson, James B. Hoves and Louis F. Claiborne, Washington, D. C., for appellees.
In recent Terms we have more than once addressed the intricate problem of state taxation of matters involving Indian tribes and their members. Moe v. Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976); McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973); Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973). We return to that vexing area in the present cases. Although a variety of questions are presented, perhaps the most significant is whether an Indian tribe ousts a State from any power to tax on-reservation purchases by nonmembers of the tribe by imposing its own tax on the transaction or by otherwise earning revenues from the tribal business. A three-judge District Court held for the Tribes. We affirm in part and reverse in part.
* These cases are here on the State of Washington's appeal from declaratory judgments and permanent injunctions entered by the District Court at the close of consolidated proceedings in two separate cases that raised related issues. 446 F.Supp. 1339 (ED Wash. 1978). The first case, Confederated Tribes of the Colville Indian Reservation v. State of Washington, Civ.No. 3868, was filed on May 17, 1973, by the Confederated Tribes of the Colville Reservation (Colville), Makah, and Lummi Tribes. The second, United States of America and Confederated Bands and Tribes of the Yakima Indian Nation v. State of Washington, Civ. No. 3909, was commenced on July 18, 1973, by the United States on behalf of the Confederated Bands and Tribes of the Yakima Indian Nation (Yakima Tribe.1 In each action, the complainants contended that the State's cigarette and tobacco products taxes2 could not lawfully be applied to sales by on-reservation tobacco outlets. They sought declaratory judgments to that effect, as well as injunctions barring the State from taking any measures to enforce the challenged taxes. In particular, the plaintiffs sought to enjoin the State from seizing as contraband untaxed cigarettes destined for delivery to their reservations.3 In the Colville case, the Tribes also challenged the State's assumption of civil and criminal jurisdiction over their reservations and, by amended pleadings, attacked the application of the State's vehicle excise taxes to Indian-owned vehicles. The Yakima case did not present these latter issues, but it did make a broad attack on the application of the State's general retail sales tax to on-reservation transactions.
From the time of filing, the two cases pursued closely parallel courses. On November 5, 1973, a temporary restraining order against the State's enforcement of the taxing statutes was issued in each. App. 13, 147. Thereafter, because the complaints sought injunctive relief against the enforcement of state statutes, a three-judge District Court was convened pursuant to the then applicable requirement of 28 U.S.C. § 2281 (1970 ed.).4 On September 6, 1974, the three-judge court issued preliminary injunctions restraining the State from enforcing the challenged taxes against the Tribes. App. 15, 156. There followed extensive discovery,5 after which the parties to each case reached agreement on pretrial orders setting forth facts and clarifying the issues.
Trial was held in both cases on March 28, 1977, and the three-judge court entered its consolidated decision on February 22, 1978. The court concluded (1) that it had jurisdiction as a three-judge court to consider the issues presented; (2) that the state cigarette tax could not be applied to on-reservation transactions because it was pre-empted by the tribal taxing ordinances and constituted an impermissible interference with tribal self-government; (3) that the state retail sales tax could not be applied to tribal cigarette sales, but could be applied to sales of other goods to non-Indians; (4) that the State could not impose certain recordkeeping requirements in connection with various tax-exempt sales; (5) that the State could not impose its vehicle excise taxes upon vehicles owned by the Tribes and their members; and (6) that the State's assumption of civil and criminal jurisdiction over the Makah and Lummi Tribes was unconstitutional. The court enjoined enforcement of the statutes it had struck down, and the State moved unsuccessfully for a new trial. This appeal followed. We postponed consideration of certain jurisdictional questions to the merits. 440 U.S. 905, 100 S.Ct. 35, 62 L.Ed.2d 25 (1979).
We begin by sketching the relevant factual background, which is not seriously in dispute.6 Thereafter, we explore the jurisdictional questions previously postponed and then turn to the merits.
The State of Washington levies a cigarette excise tax of $1.60 per carton,7 on the "sale, use, consumption, handling, possession or distribution" of cigarettes within the State. Wash.Rev.Code § 82.24.020 (1976). The tax is enforced with tax stamps; and dealers are required to sell only cigarettes to which such stamps have been affixed. § 82.24.030. Indian tribes are permitted to possess unstamped cigarettes for purposes of resale to members of the tribe, but are required by regulation to collect the tax with respect to sales to non-members. § 82.24.260; Wash.Admin.Code § 458-20-192 (1977).8 The District Court found, on the basis of its examination of state authorities, that the legal incidence of the tax is on the purchaser in transactions between an Indian seller and a non-Indian buyer.9
Washington also imposes a sales tax on sales of personal property, including cigarettes. Wash.Rev.Code § 82.08.020 (1976). This tax, which was 5% during the relevant period, is collected from the purchaser by the retailer. § 82.08.050. It does not apply to on-reservation sales to reservation Indians. Wash.Admin.Code § 458-20-192 (1977).
The state motor vehicle excise tax is imposed on "the privilege of using in the state any motor vehicle." Wash.Rev.Code § 82.44.020 (Supp.1977). The tax is assessed annually, and during the relevant period the amount was 2% of the fair market value of the vehicle in question. In addition, the State imposes an annual tax in the amount of 1% of fair market value on the privilege of using campers and trailers in the State. § 82.50.400 (1976).10
Each of the Tribes involved in this litigation is recognized by the United States as a sovereign Indian tribe. Each is governed by a business or tribal council approved by the Secretary of the Interior.11 The Colville Tribe has some 5,800 members, of whom about 3,200 live on the Colville Indian Reservation.12 Enrolled members of the Tribe constitute just under half of the reservation's population. The Lummi Tribe has approximately 2,000 members. Roughly 1,250 of them live on the reservation.13 The Makah Tribe has about 1,000 members. Some 900 live on the reservation.14 The Colville, Lummi, and Makah Reservations are isolated and underdeveloped. Many members reside in mobile homes. Most own at least one automobile which is used both on and off the reservation.
The Yakima Tribe has more than 6,000 members, of whom about 5,000 live on the reservation.15 Enrolled members, however, constitute less than one-fifth of the reservation's population. The balance is made up of approximately 1,500 Indians who are not members of the Tribes and more than 20,000 non-Indians.
The Colville, Lummi, and Makah tribes have nearly identical cigarette sales and taxing schemes. Each Tribe has enacted ordinances pursuant to which it has authorized one or more on-reservation tobacco outlets.16 These ordinances have been approved by the Secretary of the Interior; and the dealer at each tobacco outlet is a federally licensed Indian trader. All three Tribes use federally restricted tribal funds17 to purchase cigarettes from out-of-state dealers.18 The Tribes distribute the cigarettes to the tobacco outlets and collect from the operators of those outlets both the wholesale distribution price and a tax of 40 to 50 cents per carton. The cigarettes remain the property of the Tribe until sale. The taxing ordinances specify that the tax is to be passed on to the ultimate consumer of the cigarettes. From 1972 through 1976, the Colville Tribe realized approximately $266,000 from its cigarette tax; the Lummi Tribe realized $54,000 and the Makah Tribe realized $13,000.
While the Colville, Lummi, and Mekah Tribes function as retailers, retaining possession of the cigarettes until their sale to consumers, the Yakima Tribe acts as a wholesaler. It purchases cigarettes from out-of-state dealers and then sells them to its licensed retailers. The Tribe receives a markup over the wholesale price from those retailers as well as a tax of 22.5 cents per carton. There is no requirement that this tax be added to the selling price. In 1975, the Yakima Tribe derived $278,000 from its cigarette business.
Indian tobacco dealers make a large majority of their sales to non-Indians—residents of nearby communities who journey to the reservation especially to take advantage of the claimed tribal exemption from the state cigarette and sales taxes. The purchaser saves more than a dollar on each carton, and that makes the trip worthwhile. All parties agree that if the State were able to tax sales by Indian smokeshops and eliminate that $1 saving, the stream of non-Indian bargain hunters would dry up. In short, the Indian retailer's business is to a substantial degree dependent upon his tax-exempt status, and if he loses that status his sales will fall off sharply.
"An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute . . . shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges . . . ."19
After the State filed its jurisdictional statement in this appeal, the United States moved to dismiss the Yakima case on the ground that it was not one required by § 2281 to be heard by a court of three judges and thus did not fall within the grant of appellate jurisdiction in § 1253. Although directed only to the Yakima case because that is the only one to which the Government is a party, this challenge is quite clearly germane to the Colville case as well.
Section 2281 does not require a three-judge court where a constitutional challenge to a state statute is grounded only in the Supremacy Clause. Swift & Co. v. Wickham, 382 U.S. 111, 128-129, 86 S.Ct. 258, 267-268, 15 L.Ed.2d 194 (1965). In addition, § 2281 is not brought into play by constitutional claims that are "insubstantial," Goosby v. Osser, 409 U.S. 512, 518, 93 S.Ct. 854, 858, 35 L.Ed.2d 36 (1973). The United States argues that the substantive tax claims raised by these cases fall into one or the other category, and thus failed to trigger § 2281.20 Further, the Government continues, the attacks on the State's seizure of cigarettes, while perhaps raising genuine Commerce Clause issues, are not properly characterized as challenges to the constitutionality of a state statute. Rather, the Government asserts, they go to the constitutionality of the result obtained by the use of the statute. We find neither contention persuasive.
The original complaints in these actions contended that the state taxes were unconstitutional under the Indian Commerce Clause as well as the Supremacy Clause. Relying primarily upon language in footnote 17 in Moe v. Salish & Kootenai Tribes, 425 U.S., at 481, 96 S.Ct., at 1645, the United States asserts that the Tribes' Commerce Clause claims were insubstantial.21 but Moe was decided in 1976—long after a three-judge court was convened to hear these cases—and it is thus apparent that footnote 17 alone cannot be dispositive, whatever its precise thrust. There is language in that footnote, however, which suggests that the insubstantiality of Commerce Clause claims such as those before us flows from Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973), and McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973)—both of which were decided before the present suits were filed.22 We think the United States reads too much into this language. Goosby v. Osser, supra, made it clear that constitutional claims will not lightly be found insubstantial for purposes of § 2281. Indeed, Goosby explicitly states that prior decisions are not sufficient to support a conclusion that certain claims are insubstantial unless those prior decisions "inescapably render the claims frivolous." 409 U.S., at 518, 93 S.Ct., at 858. We cannot cannot say here that the Goosby test has been met. Neither Mescalero nor McClanahan "inescapably render[s] the [Tribes' Commerce Clause] claims frivolous" because neither holds that that Clause is wholly without force in situations like the present. And even footnote 17 merely rejects the stark and rather unhelpful notion that the Commerce Clause provides an "automatic exemptio[n] 'as a matter of constitutional law' " in such cases. (Emphasis added.) It does not take that Clause entirely out of play in the field of state regulation of Indian affairs.
In addition, it seems quite clear that the Tribes' attack on the official seizure of cigarettes bound for the reservations also triggers the three-judge requirement of § 2281. The United States concedes that that attack raised Commerce Clause issues, but maintains that the Tribes' target was not really the state enforcement statutes themselves, but rather the discretionary official conduct undertaken pursuant to those statutes. We have no quarrel with the proposition that the mere fact that executives seek shelter under various state statutes will not necessarily convert a suit to restrain their lawless behavior into a § 2281 case, Phillips v. United States, 312 U.S. 246, 248-253, 61 S.Ct. 480, 481-484, 85 L.Ed. 800 (1941). But this is not a situation in which the only connection with state statutes arises when officials accused of taking various ultra vires actions seek to trace their conduct back to vague statutes granting them broad executive discretion. Here the state officials involved were attempting to enforce the state tax laws by using the tools authorized for such enforcement by the state legislature. They manifested an intention to continue to use those tools for that purpose. And it is those tools, as applied to cigarettes in Indian commerce, which the Tribes challenged.23 We hold that this suffices to bring these cases within § 2281.
The other jurisdictional question postponed in 1979 is relevant only to the Colville case. It concerns the timeliness under 28 U.S.C. § 2101(b) of the State's appeal from the District Court's resolution of the motor-vehicle-tax and assumption-of-jurisdiction issues. Basically, the problem is this: the notice of appeal on these two issues was filed more than 60 days after the District Court's decision, but within 60 days of the denial of a state motion for partial new trial—a motion that was not addressed to the motor-vehicle-tax and assumption-of-jurisdiction issues. The question is whether a motion for partial new trial renders nonfinal the District Court's holding on all issues between the parties, or merely renders nonfinal the disposition of those issues actually raised in the new trial motion. If the former, the State's notice of appeal on the vehicle-taxes and assumption-of-jurisdiction issues was timely. If the latter, that notice was filed out of time and to that extent the appeal is jurisdictionally time-barred.24
In Moe v. Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976), we considered a state taxing scheme remarkably similar to the cigarette and sales25 taxes at issue in the present cases. Montana there sought to impose a cigarette tax on sales by smokeshops operated by tribal members and located on leased trust lands within the reservation, and sought to require the smokeshop operators to collect the tax. We upheld the tax, insofar as sales to non-Indians were concerned,26 because its legal incidence fell on the non-Indian purchaser. Hence, "the competitive advantage which the Indian seller doing business on tribal land enjoys over all other cigarette retailers, within and without the reservation, is dependent on the extent to which the non-Indian purchaser is willing to flout his legal obligation to pay the tax." Id., at 482, 96 S.Ct., at 1645 (emphasis in original). We upheld the collection requirement, as applied to purchases by non-Indians, on the ground that it was a "minimal burden" designed to aid the State in collecting an otherwise valid tax. Id., at 48, 96 S.Ct., at 1645.
Moe establishes several principles relevant to the present cases. The State may sometimes impose a nondiscriminatory tax on non-Indian customers of Indian retailers doing business on the reservation. Such a tax may be valid even if it seriously disadvantages or eliminates the Indian retailer's business with non-Indians.27 And the State may impose at least "minimal" burdens on the Indian retailer to aid in enforcing and collecting the tax. There is no automatic bar, therefore, to Washington's extending its tax and collection and recordkeeping requirements onto the reservation in the present cases.
Although it narrows the issues in the present cases, Moe does not definitively resolve several important questions. First, unlike in Moe, each of the Tribes imposes its own tax on cigarette sales, and obtains further revenues by participating in the cigarette enterprise at the wholesale or retail level. Second, Washington requires the Indian retailer to keep detailed records of exempt and nonexempt sales in addition to simply precollecting the tax. Moe expressed no opinion regarding the "complicated problems" of enforcement that distinctions between exempt and nonexempt purchasers might entail. Id., at 468, n. 6, 96 S.Ct., at 1638. Third, Moe left unresolved the question of whether a State can tax purchases by on-reservation Indians not members of the governing tribe, as Washington seeks to do in the present cases. Id., at 480-481, n. 16, 96 S.Ct., at 1644-1645. Finally, unlike in Moe, Washington has seized, and threatens to continue seizing, shipments of unstamped cigarettes en route to the reservations from wholesalers outside the State. We address each of these questions.
At the outset, the State argues that the Colville, Makah, and Lummi Tribes have no power to impose their cigarette taxes on nontribal purchasers.28 We disagree. The power to tax transactions occurring on trust lands and significantly involving a tribe or its members is a fundamental attribute of sovereignty which the tribes retain unless divested of it by federal law or necessary implication of their dependent status. Cf. United States v. Wheeler, 435 U.S. 313, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978).
The widely held understanding within the Federal Government has always been that federal law to date has not worked a divestiture of Indian taxing power. Executive branch officials have consistently recognized that Indian tribes possess a broad measure of civil jurisdiction over the activities of non-Indians on Indian reservation lands in which the tribes have a significant interest, 17 Op.Atty.Gen. 134 (1881); 7 Op. Atty.Gen. 174 (1855), including jurisdiction to tax, 23 Op.Atty.Gen. 214 (1900); Powers of Indian Tribes, 55 I.D. 14, 46 (1934). According to the Solicitor of the Department of the Interior:
"Chief among the powers of sovereignty recognized as pertaining to an Indian tribe is the power of taxation. Except where Congress has provided otherwise, this power may be exercised over members of the tribe and over nonmembers, so far as such nonmembers may accept privileges of trade, residence, etc., to which taxes may be attached as conditions." Ibid. (emphasis added).
Federal courts also have acknowledged tribal power to tax non-Indians entering the reservation to engage in economic activity. Buster v. Wright, 135 F. 947, 950 (CA8 1905), appeal dism'd, 203 U.S. 599, 27 S.Ct. 777, 51 L.Ed. 334 (1906); Iron Crow v. Oglala Sioux Tribe, 231 F.2d 89 (CA8 1956); cf. Morris v. Hitchcock, 194 U.S. 384, 393, 24 S.Ct. 712, 715, 48 L.Ed. 1030 (1904). No federal statute cited to us shows any congressional departure from this view. To the contrary, authority to tax the activities or property of non-Indians taking place or situated on Indian lands, in cases where the tribe has a significant interest in the subject matter, was very probably one of the tribal powers under "existing law" confirmed by § 16 of the Indian Reorganization Act of 1934, 48 Stat. 987, 25 U.S.C. § 476. In these respects the present cases differ sharply from Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209 (1978), in which we stressed the shared assumptions of the Executive, Judicial, and Legislative Departments that Indian tribes could not exercise criminal jurisdiction over non-Indians.
Tribal powers are not implicitly divested by virtue of the tribes' dependent status. This Court has found such a divestiture in cases where the exercise of tribal sovereignty would be inconsistent with the overriding interests of the National Government, as when the tribes seek to engage in foreign relations, alienate their lands to non-Indians without federal consent, or prosecute non-Indians in tribal courts which do not accord the full protections of the Bill of Rights. See id., at 208-210, 98 S.Ct., at 1020-1021; United States v. Wheeler, supra, 435 U.S., at 326, 98 S.Ct., at 1087. In the present cases, we can see no overriding federal interest that would necessarily be frustrated by tribal taxation. And even if the State's interests were implicated by the tribal taxes, a question we need not decide, it must be remembered that tribal sovereignty is dependent on, and subordinate to, only the Federal Government, not the States.
The Tribes contend that their involvement in the operation and taxation of cigarette marketing on the reservation ousts the State from any power to exact its sales and cigarette taxes from nonmembers purchasing cigarettes at tribal smokeshops. The primary argument is economic. It is asserted that smokeshop cigarette sales generate substantial revenues for the Tribes which they expend for essential governmental services, including programs to combat severe poverty and underdevelopment at the reservations. Most cigarette purchasers are outsiders attracted onto the reservations by the bargain prices the smokeshops charge by virtue of their claimed exemption from state taxation. If the State is permitted to impose its taxes, the Tribes will no longer enjoy any competitive advantage vis-a-vis businesses in surrounding areas. Indeed, because the Tribes themselves impose a tax on the transaction, if the state tax is also collected the price charged will necessarily be higher and the Tribes will be placed at a competitive disadvantage as compared to businesses elsewhere. Tribal smokeshops will lose a large percentage of their cigarette sales and the Tribes will forfeit substantial revenues. Because of this economic impact, it i