Opinion ID: 216352
Heading Depth: 4
Heading Rank: 1

Heading: Law Regarding Precollection of the Tax

Text: In Moe v. Confederated Salish & Kootenai Tribes of Flathead Reservation , the Court upheld a Montana tax law that required the cigarette seller to prepay the tax and add the tax to the cigarette's retail price. 425 U.S. 463, 483, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976); see also Confederated Salish & Kootenai Tribes of Flathead Reservation v. Moe, 392 F.Supp. 1297, 1308 (D.Mont.1974) (describing the tax as an advance payment [which] shall be added to the price of the cigarettes and recovered from the ultimate consumer or user.) (internal quotation marks omitted). There, like here, the tribe argued that precollection of the tax infringed tribal sovereignty because the tribal retailer has been taxed, and . . . has suffered a measurable out-of-pocket loss. Moe, 425 U.S. at 481, 96 S.Ct. 1634. The Court rejected this argument because the legal incidence of the tax fell upon non-member purchasers. Id. at 481-82, 96 S.Ct. 1634. The Court reasoned that prepayment was not, strictly speaking, a tax at all, but rather constituted the simpl[e] requirement that the Indian proprietor . . . add the tax to the sales price and thereby aid the State's collection effort. Id. at 483, 96 S.Ct. 1634. Consequently, the Court held that Montana's requirement that the Indian tribal seller collect a tax validly imposed on non-Indians is a minimal burden designed to avoid the likelihood that in its absence non-Indians purchasing from the tribal seller will avoid payment of a concededly lawful tax. Id. Similarly, in Colville, the Court upheld a Washington precollection scheme that required retailers to either purchase prestamped cigarettes from wholesalers or purchase tax stamps directly from the state and affix them to cigarette packs before sale. Colville, 447 U.S. at 141-42, 100 S.Ct. 2069; see also Confederated Tribes of Colville Indian Reservation v. Washington, 446 F.Supp. 1339, 1346 (E.D.Wash.1978) (describing the precollection mechanism). As in Moe, the Court characterized precollection as a simple collection burden imposed . . . on tribal smokeshops and held that Washington may validly require 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. Colville, 447 U.S. at 159, 100 S.Ct. 2069. [15]