Opinion ID: 110329
Heading Depth: 1
Heading Rank: 1

Heading: Central Machinery

Text: Warren Trading Post held that Arizona could not levy its transaction privilege tax against a company regularly engaged in retail trading with the Indians upon a reservation. The company operated under a federal license, and it was subject to the federal regulatory scheme authorized by 25 U. S. C. §§ 261-264. These apparently all-inclusive regulations, the Court concluded, show that Congress has taken the business of Indian trading on reservations so fully in hand that no room remains for state laws imposing additional burdens upon traders. 380 U. S., at 690. The Court today is too much persuaded by the superficial similarity between Warren Trading Post and Central Machinery. The Court mistakenly concludes that a company having no license to trade with the Indians and no place of business within a reservation is engaged in the business of Indian trading on reservations. . . . 380 U. S., at 690. Although [a]ny person desiring to sell goods to Indians inside a reservation must secure federal approval, see 25 U. S. C. §§ 262, 264, the federal regulationsand the facts of this caseshow that a person who makes a single approved sale need not become a fully regulated Indian trader. Even itinerant peddlers who engage in a pattern of selling within a reservation are merely considered as traders for purposes of the licensing requirement. 25 CFR § 251.9 (b) (1979). The business of a licensed trader, in fact, must be managed by the bonded principal, who must habitually reside upon the reservation. . . . 25 CFR § 251.14 (1979). [1] Since Warren Trading Post involved a resident trader subject to the complete range of federal regulation, the Court had no occasion to consider whether federal regulation also pre-empts state taxation of a seller who enters a reservation to make a single transaction. [2] Our most recent cases undermine the notion that 25 U. S. C. §§ 261-264 occupy the field so as to pre-empt all state regulation affecting licensed Indian traders. The unanimous Court in Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 481-483 (1976), concluded that a State could require tribal retailers to prepay a tax validly imposed on non-Indian customers. Rejecting an argument based on Warren Trading Post, the Court concluded that federal laws `passed to protect and guard [the Indians] only affect the operation, within the [reservation], of such state laws as conflict with the federal enactments.' 425 U. S., at 483, quoting United States v. McGowan, 302 U. S. 535, 539 (1938). In Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 159-160 (1980), the Court holds that a State can require licensed traders to keep detailed tax records of their sales to both Indians and non-Indians. Cf. Confederated Tribes v. Washington, 446 F. Supp. 1339, 1347, 1358-1359 (ED Wash. 1978) (three-judge court). Finally, unlike taxes imposed upon an Indian trader engaged in a continuous course of dealing within the reservation, the tax assessed against Central Machinery does not to a substantial extent frustrate the evident congressional purpose of ensuring that no burden shall be imposed upon Indian traders for trading with Indians . . . except as authorized by Acts of Congress or by valid regulations promulgated under those Acts. Warren Trading Post, supra, at 691. In this case, the Bureau of Indian Affairs approved all aspects of the only sale Central Machinery made to the Gila River Indian Tribe. The contract price approved by the Bureau included costs attributable to the very tax that Central Machinery now seeks to recover. Ante, at 161-162. Thus, the State's tax did not interfere with the statutory plan Congress set up in order to protect Indians against prices deemed unfair or unreasonable. . . . Warren Trading Post, supra, at 691. Since a seller not licensed to trade with the Indians must secure specific federal approval for each isolated transaction, there is no danger that ordinary state business taxes upon the seller will impair the Bureau's ability to prevent fraudulent or excessive pricing. To hold the seller immune from state taxes otherwise due upon a single transaction with the Indians gives the non-Indian seller a windfall or the Indian buyer an unwarranted advantage over all others who deal with the seller.