Opinion ID: 464880
Heading Depth: 4
Heading Rank: 1

Heading: Marketing an Exemption

Text: 25 In support of their contention that the Tribes are marketing an exemption from California law, the State cites Washington v. Confederated Tribes of the Colville Reservation, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980). 26 In Colville, the Indian tribes sought to bar the State of Washington from enforcing a cigarette excise tax and a general sales tax on cigarette sales by on-reservation tobacco outlets to non-Indian purchasers. The Supreme Court held that the imposition of these taxes on on-reservation purchases of cigarettes by non-Indians was valid. For the following reasons, we find that Colville does not support the State's contention. 27 First, the Supreme Court in Colville did not rule that a Tribe's marketing of a [tax] exemption enabled the state to prohibit the Tribe from engaging in the underlying activity, which is what the State is trying to accomplish in this case. Rather, the Court ruled that if all the Tribe is marketing to non-Indians is an exemption from state taxes which the state would otherwise use to provide off-reservation services to off-reservation residents, then the Tribe's legitimate interest in making those sales would not outweigh the state's legitimate interest in taxing those same transactions. In the current case, the tribal interest in providing revenue and jobs for its members outweighs the State's interest in protecting against the potential for intrusion of organized crime. 28 Second, in Colville, the Court recognized that the Tribe's interest in generating revenues for essential governmental programs is strongest when the revenues are derived from value generated on the reservation by activities involving the Tribes.... Colville, 447 U.S. at 156-57, 100 S.Ct. at 2082-83. See Mescalero Apache Tribe, 462 U.S. at 337, 103 S.Ct. at 2387-88. Even the State concedes that the revenues here are derived from value generated by on-reservation activities.... Appellant's Brief at 28, n. 11. Instead of merely importing products to resell in a manner which deprives the State of revenues which would be used to provide state services off-reservation, the Tribes in this case built and help operate gambling facilities, employ tribal members, regulate and conduct these activities wholly within their reservation, and utilize the funds to provide necessary governmental services for their members. We agree with both parties that the revenues here are derived from value generated on the reservation by activities involving the Tribes. We therefore find the Tribes' interest to be strong. 29