Court Opinion

ID: 9425237
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:14:08.118982+00
Date Added: 2024-06-11T17:22:54.164154
License: Public Domain

Mr. Justice Douglas,
with whom Mr. Justice Brennan and Mr. Justice Stewart concur,
dissenting in part.
The power of Congress granted by Art. I, § 8 “[t]o regulate Commerce . . . with the Indian Tribes” is an exceedingly broad one. In the liquor cases the Court held that it reached acts even off Indian reservations in areas normally subject to the police power of the States. Perrin v. United States, 232 U. S. 478. The power gained breadth by reason of historic experiences that induced Congress to treat Indians as wards of the Nation. See Gritts v. Fisher, 224 U. S. 640, 642-643; United States v. Thomas, 151 U. S. 577, 585; United States v. McGowan, 302 U. S. 535, 538. The laws enacted by Congress varied from decade to decade. See U. S. Dept, of the Interior, Federal Indian Law 94-138 (1958), which is a revision of the monumental work, Handbook of Federal Indian Law prepared by Felix S. Cohen and published in 1940.
The present Act, 48 Stat. 984, 25 U. S. C. § 461 et seg., was enacted in 1934 with various purposes in mind, the ones most relevant being, first, “[t]o permit Indian tribes to equip themselves with the devices of modern business organization, through forming themselves into business corporations,” and second, “[t]o establish a system of financial credit for Indians.” S. Rep. No. 1080, 73d Cong., 2d Sess., 1.
Loans had been made by the federal agency to individual Indians, but the experience had not been satisfactory. Id., at 3-4. The 1934 Act precluded such loans and set up a $10 million revolving-credit fund for loans *160to incorporated tribes. The industry established pursuant to that Act and involved here is a ski enterprise, adjacent to the reservation and located on lands leased from the U. S. Forest Service.
The Court makes much of the fact that the ski enterprise is not on the reservation. But that seems irrelevant to me by reason of § 5 of the Act, which provides in part that “any lands or rights acquired” pursuant to the 1934 Act “shall be taken in the name of the United States in trust for the Indian tribe ... for which the land is acquired, and such lands or rights shall be exempt from State and local taxation.” 25 U. S. C. § 465. While the lease of Forest Service lands was not technically “acquired ... in trust for the Indian tribe,” the Court concedes that the lease arrangement was sufficient to bring the Tribe’s interest in the land within the immunity afforded by § 465. And so the question respecting income taxes comes down to whether these taxes are within the scope of “such lands or rights” as used in § 5.
I start from the premise made explicit in the Senate Report on the 1934 Act. It set forth the endorsement by President Roosevelt of “a new standard of dealing between the Federal Government and its Indian wards.” S. Rep., supra, at 3. Article 10 of the 1852 Treaty with the Apaches described the role of the guardian as respects these wards: “For and in consideration of the faithful performance of all the stipulations herein contained, by the said Apache’s Indians, the government of the United States will grant to said Indians such donations, presents, and implements, and adopt such other liberal and humane, measures as said government may deem meet and proper.” 10 Stat. 980.
The 1934 Act obviously is an effort by Congress to extend its control to Indian economic activities outside the reservation for the benefit of its Indian wards. The philosophy permeating the present Act was articulated *161by Mr. Chief Justice Marshall in Worcester v. Georgia, 6 Pet. 515, 556:
“From the commencement of our government, Congress has passed acts to regulate trade and intercourse with the Indians; which treat them as nations, respect their rights, and manifest a firm purpose to afford that protection which treaties stipulate.”
As noted in Warren Trading Post v. Tax Comm’n, 380 U. S. 685, most tax immunities of Indians have related to activities in reservations. But, as we stated in that case, the fact that the activities occurred on a reservation was not the controlling reason, “but rather because Congress in the exercise of its power granted in Art. I, § 8, has undertaken to regulate reservation trading in such a comprehensive way that there is no room for the States to legislate on the subject.” Id., at 691 n. 18.
The powers of Congress “over Indian affairs are as wide as State powers over non-Indians,” subject, of course, to the limitations of the Bill of Rights. Federal Indian Law 24. One illustration of its extent is shown by the liquor cases already cited. We deal here, however, with “tribal property” — a leasehold interest in federal lands adjoining the reservation. “The term tribal property . . . does not designate a single and definite legal institution, but rather a broad range within which important variations exist.” Federal Indian Law 590-591. There is no magic in the word “reservation.” United States v. McGowan, supra, held that land purchased by Congress for a tribe but outside a “reservation” was nonetheless “Indian country.” While that case involved application of liquor laws, the Court stated that “Congress alone has the right to determine the manner in which this country’s guardianship over the Indians shall be *162carried out,” id., at 538, and that it was immaterial what the tract of the land was called. Id., at 539.
In the present case, Congress has attempted to give this tribe an economic base which offers job opportunities, a higher standard of living, community stability, preservation of Indian culture, and the orientation of the tribe to commercial maturity. We deal only with a tribal-developed enterprise. State taxation of that enterprise interferes with the federal project. The ski resort, being a federal tool to aid the tribe, may not be taxed by the State without the consent of Congress. Congress by § 5 of the Act has made the “lands or rights” acquired for the tribe exempt from state and local taxation. Section 5, indeed, states that “lands or rights” acquired under the 1934 Act shall be held “in trust for the Indian tribe or individual Indian for which the land is acquired.” There is no more convincing way to tax “rights” in land than to impose an income tax on the gross or net income from those rights. If § 5 be thought to be ambiguous, we should resolve the ambiguity in favor of the tribe. As stated in Carpenter v. Shaw, 280 U. S. 363, 367, “Doubtful expressions are to be resolved in favor of the weak and defenseless people who are the wards of the nation, dependent upon its protection and good faith.” In Squire v. Capoeman, 351 U. S. 1, we resolved doubts respecting the federal income tax in favor of the Indian. There is the same reason for taking that course here.
The tribal ski enterprise, unlike the private entrepreneur in Helvering v. Mountain Producers Corp., 303 U. S. 376, on which the Court relies, is plainly a federal instrumentality — authorized and financed by Congress with the aim of starting the tribe on commercial ventures. This case has no relation to Oklahoma Tax Comm’n v. United States, 319 U. S. 598, which raised the question whether state inheritance taxes could be levied on re*163stricted property. The Court only held that restricted property, as created by Congress, carried no implication of estate tax exemption. Oklahoma Tax Comm’n v. Texas Co., 336 U. S. 342, also relied on by the Court, merely held that a lessee of mineral rights in Indian lands was not immunized from paying state gross production taxes and state excise taxes on petroleum produced from the lands. Those cases would be relevant here if the tribe had leased the ski resort to an outsider who sought the tribal tax immunity. We deal only with an income tax levied on a tribal corporate enterprise conducted by the tribe with federal funds on federal lands leased to the tribe. Federal Indian Law distinguished the Helvering and like cases relied on by the Court from an enterprise “organized solely to carry out governmental objectives, such as the tribal corporations organized” under the 1934 Act with which we now deal, id., at 852-853.
In my view, this state income tax is barred by § 5 through which Congress has given tax immunity to these new tribal enterprises.