Court Opinion

ID: 4303221
Source: CourtListenerOpinion
Date Created: 2018-08-13 17:00:25.948484+00
Date Added: 2024-06-11T14:32:11.280035
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA,                        Nos. 14-36055
                  Plaintiff-Appellee,                  16-35607

                      v.                              D.C. No.
                                                   2:12-cv-03089-
 KING MOUNTAIN TOBACCO                                  RMP
 COMPANY, INC.,
               Defendant-Appellant.                   OPINION

       Appeal from the United States District Court
         for the Eastern District of Washington
    Rosanna Malouf Peterson, District Judge, Presiding

            Argued and Submitted March 15, 2018
                 San Francisco, California

                      Filed August 13, 2018

 Before: Ferdinand F. Fernandez, M. Margaret McKeown,
          and Julio M. Fuentes, * Circuit Judges.

                  Opinion by Judge McKeown

    *
      The Honorable Julio M. Fuentes, United States Circuit Judge for
the U.S. Court of Appeals for the Third Circuit, sitting by designation.
2    UNITED STATES V. KING MOUNTAIN TOBACCO CO.

                          SUMMARY **

                                 Tax

    The panel affirmed the district court’s judgment in favor
of the United States in an action to collect delinquent federal
excise taxes and penalties for the manufacture of tobacco
products under 26 U.S.C. § 5701; and amended judgment
determining the amount of those taxes.

    The panel first held that it had jurisdiction over the
appeal of the amended judgment as a final judgment under
28 U.S.C. § 1291, because the amended judgment
sufficiently specified both the amount of money due the
plaintiff and a formula for computing that amount of money.

     The panel next held that a tobacco manufacturer located
on trust land is subject to a federal excise tax applicable to
all tobacco products manufactured in the United States under
26 U.S.C. § 5702. King Mountain Tobacco Company
manufactures tobacco products and grows some of its own
tobacco, on lands held in trust by the United States, within
the boundaries of the Yakama Nation. The panel was
unpersuaded by King Mountain’s claim of exemption based
on either the General Allotment Act of 1887 or the Treaty
with the Yakamas of 1855.

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
    UNITED STATES V. KING MOUNTAIN TOBACCO CO.             3

                        COUNSEL

Randolph H. Barnhouse (argued) and Justin J. Solimon,
Johnson Barnhouse & Keegan LLP, Los Ranchos de
Alburquerque, New Mexico; Timothy J. Carlson, Carlson
Boyd PLLC, Yakima, Washington; for Defendant-
Appellant.

Patrick J. Urda (argued), Teresa E. McLaughlin, and Gilbert
S. Rothenberg, Attorneys; David A. Hubbert, Acting
Assistant Attorney General; Tax Division, United States
Department of Justice, Washington, D.C.; for Plaintiff-
Appellee.

                        OPINION

McKEOWN, Circuit Judge:

    In this case of first impression, we consider whether
King Mountain Tobacco Company, Inc. (“King Mountain”),
a tribal manufacturer of tobacco products located on land
held in trust by the United States, is subject to the federal
excise tax on manufactured tobacco products. The district
court awarded the United States almost $58 million for
unpaid federal excise taxes, associated penalties, and
interest. Because we conclude that neither the General
Allotment Act of 1887, 4 Stat. 388 (codified as amended in
scattered sections of 25 U.S.C.), nor the Treaty with the
Yakamas of 1855, 12 Stat. 951, entitles King Mountain to an
exemption from the federal excise tax, we affirm the
judgment of the district court.
4       UNITED STATES V. KING MOUNTAIN TOBACCO CO.

                           BACKGROUND

    In 2006 the late Delbert Wheeler, Sr., a lifelong-enrolled
member of the Yakama Nation in Washington State,
purchased “80 acres of trust property . . . from the Yakama
Nation Land Enterprise, the agency of the Yakama Nation
which is charged with overseeing the maintenance of real
property held in trust by the United States for the benefit of
the Yakama Nation and its members.” Wheeler then opened
King Mountain Tobacco Company, which manufactures
cigarettes and roll-your-own tobacco in a plant located on
this trust land. After making significant investments to
improve and develop the trust property, Wheeler transferred
his interest in the property to King Mountain so that King
Mountain could commence farming, agricultural, and
manufacturing operations on Wheeler’s land. 1

    King Mountain received a federal tobacco
manufacturer’s permit in February 2007. Today, King
Mountain manufactures all of its tobacco products, and
grows some of its own tobacco, on trust lands within the
boundaries of the Yakama Nation. Some of those trust
lands—including those on which King Mountain is
located—are allotted to Wheeler, while others are allotted to
other Yakama members.

     King Mountain initially obtained all of the tobacco for
its products from an entity in North Carolina. But according
to King Mountain, “[t]obacco has historically grown on the
Yakama Nation Reservation.” Over time, King Mountain
    1
       Mr. Wheeler died in June 2016. According to King Mountain,
“[h]is estate is in probate, including his allotted lands, which must pass
to enrolled members of the Yakama Nation under federal probate
procedures, and all shares of King Mountain, which also will pass to his
Yakama[-]enrolled family members.”
        UNITED STATES V. KING MOUNTAIN TOBACCO CO.                     5

increased the proportion of tobacco grown on trust land and
incorporated into its manufactured products. In 2010 the
“approximately 3.1% of the tobacco used [in 2009 had] risen
to 9.5%. In 2011, it rose again, to 37.9%.” King Mountain
Tobacco Co., Inc. v. McKenna, 768 F.3d 989, 991 (9th Cir.
2014). By the end of 2013, King Mountain’s products were
composed “of at least 55 percent tobacco grown exclusively
on allotted land held in trust by the United States for the
beneficial use of . . . Wheeler.” The bulk of King
Mountain’s products are now manufactured by blending
“[t]rust-land grown tobacco . . . with non-trust-grown
tobacco.” King Mountain also manufactures a small amount
of “‘traditional use tobacco’ that is intended for Indian . . .
ceremonial use” and consists entirely of trust land-grown
tobacco.

    The federal government imposes excise taxes on
manufactured tobacco products, including cigars, cigarettes,
and roll-your-own tobacco. See I.R.C. § 5701. 2 The current
tax rate for cigarettes, for example, is approximately $1 per
pack, or $10 per carton. Id. § 5701(b). The current tax rate
for roll-your-own tobacco is approximately $24.78 per
pound. Id. § 5701(g). Administered by the Treasury
Department’s Alcohol and Tobacco Tax and Trade Bureau
(“TTB”), these excise taxes are assessed on the privilege of
manufacturing tobacco products and determined at the time
the tobacco products are removed from a factory or bonded
warehouse. See id. §§ 5703(b), 5702(j).

    2
       An excise tax is “[a] tax imposed on the manufacture, sale, or use
of goods (such as a cigarette tax), or on an occupation or activity (such
as a license tax or an attorney occupation fee).” Excise Tax, BLACK’S
LAW DICTIONARY (West, 10th ed. 2014).
6    UNITED STATES V. KING MOUNTAIN TOBACCO CO.

    Although King Mountain initially paid federal excise
taxes on its tobacco products, it began to fall behind in 2009.
The Treasury gave King Mountain statutory notice, under
I.R.C. § 5703(d), of the delinquent taxes and afforded the
company an opportunity to show cause why the taxes should
not be assessed. King Mountain did not challenge the
statutory notice. Accordingly, the Treasury delegate timely
made assessments against King Mountain for unpaid excise
taxes, failure-to-pay penalties, failure-to-deposit penalties,
and interest for periods in October, November, and
December 2009. In February 2010, the Treasury issued
King Mountain a Notice and Demand for Payment pursuant
to I.R.C. § 6303. King Mountain paid the assessed taxes in
installments over a five-month period in 2010, but it failed
to pay the associated penalties and interest. Eventually,
King Mountain ceased paying federal excise taxes
altogether.

    This case has shuttled between the district court and our
court on both procedural and substantive grounds. Back in
2012, the United States brought suit against King Mountain
to collect the delinquent taxes. The suit was a companion to
an earlier-filed action brought by King Mountain, Wheeler,
and the Yakama Nation for declaratory and injunctive relief
against the imposition of the federal tobacco excise tax on
King Mountain’s products. See King Mountain Tobacco
Co., Inc. v. Alcohol & Tobacco Tax and Trade Bureau,
996 F. Supp. 2d 1061 (E.D. Wash. 2014) (the “Yakama
case”), vacated and remanded sub nom. Confederated
Tribes and Bands of the Yakama Indian Nation v. Alcohol &
Tobacco Tax and Trade Bureau, 843 F.3d 810 (9th Cir.
2016). The district court granted the Government’s motion
to dismiss as to King Mountain and Wheeler on the basis that
the claims were barred by the Anti-Injunction Act, 26 U.S.C.
§ 7421(a).      The court concluded, however, that the
    UNITED STATES V. KING MOUNTAIN TOBACCO CO.             7

Yakama’s claims fell within the exception to the Anti-
Injunction Act set forth in South Carolina v. Regan, 465 U.S.
367 (1984). See King Mountain Tobacco Co., Inc. v. Alcohol
& Tobacco Tax and Trade Bureau, No. CV-11-3038-RMP,
2012 WL 12951864, at *4 (E.D. Wash. Sept. 24, 2012).

    The district court then granted summary judgment in
favor of the United States on the merits, reasoning that
neither the General Allotment Act nor the Treaty with the
Yakamas precluded the imposition of federal excise taxes.
996 F. Supp. 2d at 1067–70.

    On appeal, we held that the Yakama Nation’s suit was
barred by the Anti-Injunction Act. 843 F.3d at 815–16. We
thus vacated the judgment and remanded with instructions to
dismiss the suit for lack of subject-matter jurisdiction. Id.

    Back in the district court, the court granted summary
judgment to the Government on King Mountain’s liability
for payment of the excise tax. Observing that the merits
issues were “essentially identical” to those presented in the
earlier Yakama case, the court expressly incorporated its
conclusions of law from the summary judgment order. The
district court reserved ruling on the amount of liabilities
owed by King Mountain, however, in order to enable King
Mountain to obtain additional discovery.

   After further discovery, the district court granted
summary judgment in favor of the government on the
amount of King Mountain’s liabilities—$57,914,811.27.
However, when the district court entered final judgment in
favor of the government, it accidentally omitted this amount
from its order. The government quickly moved to alter or
amend the judgment pursuant to Federal Rule of Civil
Procedure 59(e) to reflect that King Mountain owed “to the
United States federal tobacco excise tax liabilities totaling
8    UNITED STATES V. KING MOUNTAIN TOBACCO CO.

$57,914,811.27 as of June 11, 2013, plus interest and other
statutory additions accruing after that date until paid in full.”

    Before the district court could issue an amended
judgment, however, King Mountain filed a timely notice of
appeal. Citing Federal Rule of Civil Procedure 60(a), the
district court initially ruled that it lacked jurisdiction to
amend the judgment, but that it would do so if we remanded.
Three months later, the district court reconsidered its ruling
sua sponte, concluding that our precedent permitted it to
correct the omission of the amount of judgment as a mere
“clerical error.” Accordingly, the district court granted the
government’s motion and amended the judgment. Again,
King Mountain filed a timely notice of appeal, which is now
before us.

                          ANALYSIS

I. APPELLATE JURISDICTION

    Before considering the merits, we must resolve a
preliminary question of appellate jurisdiction. Sinochem
Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422,
430–31 (2007) (holding that a court “generally may not rule
on the merits of a case without first determining that it has
jurisdiction over the category of claim in the suit”). Under
28 U.S.C. § 1291, we have jurisdiction of appeals from all
“final decisions of the district courts,” except of course
where a direct appeal lies to the Supreme Court. As a result,
“an appeal ordinarily will not lie until after final judgment
has been entered in a case.” Cunningham v. Hamilton
County, Ohio, 527 U.S. 198, 203 (1999). According to King
Mountain, the district court’s amended judgment was not a
“final judgment,” and so we lack jurisdiction over the appeal
of that order. We disagree.
     UNITED STATES V. KING MOUNTAIN TOBACCO CO.              9

      The Supreme Court has cautioned that “no statute or rule
. . . specifies the essential elements of a final judgment,”
United States v. F. & M. Schaefer Brewing Co., 356 U.S.
227, 233 (1958), and “[n]o form of words and no peculiar
formal act is necessary to evince” a final judgment, United
States v. Hark, 320 U.S. 531, 534 (1944). But the Court has
held that “a final judgment for money must, at least[]
determine, or specify the means for determining, the
amount” of the judgment. 356 U.S. at 233. At the very least,
therefore, a money judgment lacks finality when it fails to
“specify either the amount of money due the plaintiff or a
formula by which the amount of money could be computed
in mechanical fashion.” Buchanan v. United States, 82 F.3d
706, 707 (7th Cir. 1996) (per curiam) (citing F. & M.
Schaefer Brewing Co., 356 U.S. at 227).

    In this case, the amended judgment states that the United
States is entitled to “57,914,811.27 as of June 11, 2013, plus
interest and other statutory additions accruing after that date
until paid in full.” King Mountain does not dispute that the
judgment adequately “specif[ies] the amount of money due”
as of June 11, 2013. And King Mountain concedes that the
Internal Revenue Code provides “highly mechanical”
formulas for computing the statutory additions accruing
thereafter. King Mountain objects, however, to the amended
judgment’s failure to specify the portions of the
$57,914,811.27 award that are attributable to unpaid taxes,
to unpaid penalties, and to unpaid interest, because King
Mountain claims that it cannot determine how much it owes
in statutory additions without those figures.

    Assuming without deciding that the determination of the
statutory additions depends on these figures, we conclude
that the amended judgment sufficiently provides them. In
the district court, the Government submitted the
10 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

“Transaction History Report,” “Corrected Final Notice &
Demand of Taxes Due / Notice of Intent to Levy,” and
“Second Corrected Final Notice & Demand of Taxes Due /
Notice of Intent to Levy” that it had issued to King
Mountain, collectively referred to as the “Blue Ribbon
Transcript.” For each taxable period, the TTB’s Blue
Ribbon Transcript detailed the additional penalties and
interest for failure to pay the amounts due. The Government
also introduced three binders containing “detailed copies of
the computations done in connection with” the Blue Ribbon
Transcript. In granting the Government’s renewed motion
for summary judgment, the district court held that “the Blue
Ribbon Transcript constitutes presumptive proof of a valid
assessment.”

      The district court expressly entered the amended
judgment “pursuant to” its order granting the United States’
renewed motion for summary judgment, which ruled that the
Government’s Blue Ribbon Transcript “establishes [that] the
. . . sum” of King Mountain’s liability, as of June 11, 2013,
was $57,914,811.27. As explained above, the Blue Ribbon
Transcript did not pull that sum from thin air. Rather, it
specified the exact amounts of King Mountain’s unpaid
taxes, unpaid penalties, and unpaid interest for each taxable
period, and then added all of those amounts together. 3 In
other words, the amended judgment reduced the amounts of
unpaid taxes, unpaid penalties, and unpaid interest in the
Blue Ribbon Transcript to judgment. Hence, a “remand to
effectuate that intent is a matter of ‘mere form.’” See Huey
v. Teledyne, Inc., 608 F.2d 1234, 1237 (9th Cir. 1979)
(quoting Crosby v. Pac. S.S. Lines, Ltd., 133 F.2d 470, 474
(9th Cir. 1943)). After all, King Mountain can easily

     3
       King Mountain does not dispute the accuracy of the amounts listed
in the Blue Ribbon Transcript.
    UNITED STATES V. KING MOUNTAIN TOBACCO CO. 11

calculate for itself how much of the $57,914,811.27 award is
attributable to taxes, to penalties, and to interest by
consulting the Blue Ribbon Transcript and compute the
statutory additions accordingly. Finality does not require the
court to do all of the math.

    Because the amended judgment sufficiently specified
both “the amount of money due the plaintiff” as of June 13,
2013 and “a formula by which that amount of money” owed
in statutory additions accruing thereafter “could be
computed in mechanical fashion,” Buchanan, 82 F.3d at 707,
the amended judgment did not lack finality and we have
jurisdiction of this appeal. 28 U.S.C. § 1291.

II. IMPOSITION OF FEDERAL EXCISE TAX FOR TOBACCO
    PRODUCTS

    The merits of King Mountain’s tax appeal require us to
decide whether a tobacco manufacturer located on trust land
is subject to a federal excise tax applicable to all tobacco
products “manufactured in . . . the United States.” I.R.C.
§ 5702. The presumptive answer to that question is yes.
After all, the federal government enjoys plenary and
exclusive power over Indian tribes. Bryan v. Itasca County,
426 U.S. 373, 376 n.2 (1976). And “[t]he right to tribal self-
government is ultimately dependent on and subject to the
broad power of Congress.” White Mountain Apache Tribe
v. Bracker, 448 U.S. 136, 143 (1980). For those reasons,
Indians—like all citizens—are subject to federal taxation
unless expressly exempted by a treaty or congressional
12 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

statute. Hoptowit v. Comm’r, 709 F.2d 564, 565 (9th Cir.
1983). 4

   King Mountain claims an exemption based on both a
congressional statute—the General Allotment Act of 1887—
and the Treaty with the Yakamas of 1855.

                A. GENERAL ALLOTMENT ACT

    Congress passed the General Allotment Act of 1887, 24
Stat. 388 (codified as amended in scattered sections of
25 U.S.C.), in the midst of a major shift in national policy
toward Indian tribes. By the late nineteenth century, the
prevailing policy of segregating lands for the exclusive use
and control of tribes had given way to a new policy of
allotting those lands to tribe members individually. See
Affiliated Ute Citizens v. United States, 406 U.S. 128, 142
(1972) (“Allotment is a term of art in Indian law . . . . It
means a selection of specific land awarded to an individual
allottee from a common holding.”) (citations omitted). The
objectives of allotment were simple: to extinguish tribal
sovereignty, erase reservation boundaries, and force the
assimilation of Indians into society at large. See, e.g., In re
Heff, 197 U.S. 488, 499 (1905); Blackfeet Tribe of Indians v.
Montana, 729 F.2d 1192, 1195 (9th Cir. 1984) (en banc)
(observing that the “primary purpose” of allotment was the

    4
       A state’s authority to tax tribal members, on the other hand, is
limited depending on the subject and location of the tax. See
McClanahan v. State Tax Comm’n, 411 U.S. 164, 170–71 (1973);
Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148–49 (1973). “The
different standards stem from the state and federal government’s distinct
relationships with Indian tribes.” Ramsey v. United States, 302 F.3d
1074, 1078 (9th Cir. 2002).
     UNITED STATES V. KING MOUNTAIN TOBACCO CO. 13

“speedy assimilation of the Indians”), aff’d, 471 U.S. 759
(1985).

    Congress was selective at first, allotting lands under
differing approaches on a tribe-by-tribe basis. See Cohen’s
Handbook of Federal Indian Law § 3.04 (Nell Jessup
Newton ed., 2012) (hereinafter “Cohen’s Handbook”); Paul
W. Gates, Indian Allotments Preceding the Dawes Act, in
The Frontier Challenge: Responses to the Trans-Mississippi
West 141 (J. Clark ed. 1971). But the results of this initial
policy proved unsatisfactory. Because allotted land could be
sold immediately after it was received, many early allottees
quickly lost their parcels through transactions that were
unwise or even fraudulent. See Cohen’s Handbook § 1.04.
And even if sales were for fair value, allottees divested of
their land were deprived of opportunities to acquire self-
sustaining economic skills as landowners, which thwarted
the congressional goal of assimilation.

    Congress tried to address some of these problems in the
General Allotment Act, which empowered the President to
allot most tribal lands nationwide without the consent of the
Indian nations involved. Section 5 of the Act, 25 U.S.C.
§ 348, for example, prohibited alienation or encumbrance of
allotments by providing that each parcel would be held by
the United States in trust for a twenty-five year period. Upon
expiration of the trust period, which the President could
extend at his discretion, the United States was to convey the
land by patent “discharged of said trust and free of all charge
or incumbrance whatsoever.” 25 U.S.C. § 348. Only then
would a fee patent issue to the allottee. See United States v.
Mitchell, 445 U.S. 535, 543–44 (1980). Congress added
Section 6, 25 U.S.C. § 349, as a later amendment to
authorize the Secretary of the Interior to issue a patent in fee
simple upon satisfaction that any Indian allottee is
14 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

“competent and capable of managing his or her affairs.” At
that point, all “restrictions as to sale, incumbrance, or
taxation of [the allotment] land” were to “be removed.” Id. 5

    The first (and only) Supreme Court decision recognizing
a tax exemption under the General Allotment Act is Squire
v. Capoeman, 351 U.S. 1 (1956). In Capoeman, the Court
held that the General Allotment Act exempted a
“noncompetent Indian” 6 from federal capital-gains taxes on
the proceeds of a sale of timber from his allotted land. The
taxpayer claimed that the tax constituted a “charge or
incumbrance” on his land in violation of Section 5. See
25 U.S.C. § 348. The Supreme Court conceded that “the
general words [of] ‘charge or incumbrance’ might well be
sufficient to include taxation,” 351 U.S. at 7, and observed
that Congress “gave additional force to” that position when

    5
      By 1934, however, Congress had abandoned the Act’s emphasis
on individual ownership and passed the Indian Reorganization Act, ch.
576, 48 Stat. 984 (1934) (codified at 25 U.S.C. §§ 461–479) (the “IRA”).
“One of the purposes of the [IRA] was to put an end to the allotment
system[,] which had resulted in a serious diminution of [the] Indian land
base and which, through the process of intestate succession, had resulted
in many Indians holding uneconomic fractional interests of the original
allotments.” Stevens v. Comm’r, 452 F.2d 741, 748 (9th Cir. 1971).
Accordingly, the IRA prohibited further allotment of Indian land,
extended indefinitely existing periods of trust and restrictions on
alienation of Indian lands, prohibited transfers of restricted lands except
to Indian tribes, and limited testamentary disposition of such lands. The
IRA also authorized the Secretary of the Interior to acquire land in trust
for Indians, restore remaining surplus lands to tribes, promulgate
conservation regulations, and declare lands as new reservations or
extensions of existing ones. COHEN’S HANDBOOK § 1.05.

    6
      The term “noncompetent Indian” refers to one who holds allotted
land under a trust patent and who may not alienate or encumber that land
without the consent of the United States. See Hoptowit, 709 F.2d at 565
n.1.
        UNITED STATES V. KING MOUNTAIN TOBACCO CO. 15

it passed section 6, which provides for the “removal” of all
restrictions “as to sale, incumbrance, or taxation of”
allotment land upon the Secretary’s issue of a fee patent. Id.
(quoting 25 U.S.C. § 349) (emphases added). “The literal
language of [section 6],” the Court noted, “evinces a
congressional intent to subject an Indian allotment to all
taxes only after a patent in fee is issued to the allottee. This,
in turn, implies that, until such time as the patent is issued,
the allotment shall be free from all taxes, both those in being
and those which might in the future be enacted.” Id. at 7–8.

     But the Court concluded that the Act’s tax exemption for
trust land must also “extend[] to the income derived directly
therefrom.” Id. at 9 (quoting F. Cohen, Handbook of Federal
Indian Law 265) (emphasis added) (footnote omitted).
Noting that “[t]he purpose of the allotment system was to
protect the Indians’ interest and ‘to prepare the Indians to
take their place as independent, qualified members of the
modern body politic,’” id. (quoting Bd. of Comm’rs v. Seber,
318 U.S. 705, 715 (1943)), the Court deemed it “necessary
to preserve the trust and income derived directly therefrom”
from taxation. Id. But it affirmed that it was unnecessary
“to exempt reinvestment income from tax burdens.” Id.
(citing Superintendent of Five Civilized Tribes v. Comm’r,
295 U.S. 418 (1935)). 7

    Relying on Capoeman’s language and the General
Allotment Act, several circuits—including ours—have
recognized federal tax exemptions for allotment land or the
“income derived directly” from such land. See, e.g.,
Kirschling v. United States, 746 F.2d 512, 513 (9th Cir.

    7
       That was particularly true considering that Capoeman’s allotment
land “was not adaptable to agricultural purposes, and was of little value
after the timber was cut.” Id. at 4; see also id. at 10.
16 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

1984) (holding that an allottee “Indian’s gift to a non-Indian
of the proceeds from [allotted] timber lands” is exempt from
the federal gift tax); Stevens, 452 F.2d at 746 (holding that
“income derived from farming and ranching operations” on
an allottee’s lands is exempt from the federal income tax);
United States v. Daney, 370 F.2d 791, 795 (10th Cir. 1966)
(holding that bonuses from oil and gas leases of an Indian’s
allotted land are exempt from the federal income tax).

    None of these cases, however, supports King Mountain’s
exemption from a federal tax on manufactured tobacco
products at issue in this appeal. First, that tax is an excise
tax, not a tax on land or income. See Patton v. Brady,
184 U.S. 608, 615 (1902) (holding that the federal tax on
tobacco products, which was the precursor to I.R.C. § 5701
et seq., is an excise tax). King Mountain concedes as much.
But no court has held that the General Allotment Act’s tax
exemption extends to a federal excise tax of any kind.
Indeed, our decisions explicitly recognize the limited “scope
of [Capoeman’s] exemption” as extending only to “Indian
lands” and “the income derived directly therefrom.” Dillon
v. United States, 792 F.2d 849, 854 (9th Cir. 1986).

    That distinction makes good sense. Unlike an income or
property tax, an excise tax is “[a] tax imposed on the
manufacture, sale, or use of goods (such as a cigarette tax),
or on an occupation or activity (such as a license tax or an
attorney occupation fee).” Black’s Law Dictionary (West,
10th ed. 2014); see also Flint v. Stone Tracy Co., 220 U.S.
107, 151–52 (1911) (“[T]he requirement to pay such taxes
involves the exercise of privileges . . . .”), overruled on other
grounds as stated in Garcia v. San Antonio Metro. Transit
Auth., 469 U.S. 528 (1985); United States v. 4,432
Mastercases of Cigarettes, 448 F.3d 1168, 1185 (9th Cir.
2006) (“An excise tax . . . is one imposed on the performance
      UNITED STATES V. KING MOUNTAIN TOBACCO CO. 17

of an act . . . or the enjoyment of a privilege.”) (second
alteration in original) (citation and internal quotation marks
omitted). 8 In other words, the “obligation to pay an excise
tax is usually based upon the voluntary action of the person
taxed either for enjoying the privilege or engaging in the
occupation which is the subject of the excise, and the
element of absolute and unavoidable demand as in the case
of property tax,” or an income tax, “is lacking.” Munn v.
Bowers, 47 F.2d 204, 205 (2d Cir. 1931) (emphases added).
And, quite unlike a property or income tax, the cost of an
excise tax is easily—and in the case of tobacco products,
virtually always—passed along to consumers. The unique
characteristics of excise taxes implicate few, if any, of the
purposes of a tax on land or on income derived directly from
the land.

    Since Capoeman, the Supreme Court has hinted that
federal excise taxes are categorically distinct from the sort
of taxes from which trust lands are exempt under the General
Allotment Act. In County of Yakima v. Confederated Tribes
and Bands of the Yakima Indian Nation, 502 U.S. 251
(1992), for example, the Court addressed whether a state
could validly impose an excise tax on the sale of fee-patented
lands—i.e., allotments no longer held in trust by the United
States. Id. at 253. The Court reiterated its longstanding,
“per se rule” that “categorical[ly] prohibit[s] . . . state
taxation” of Indians absent congressional authorization. Id.
at 267 (quoting California v. Cabazon Band of Mission

    8
      The federal excise tax in this case, for example, is assessed on King
Mountain’s tobacco products upon removal from King Mountain’s
warehouse, regardless of whether those products are ultimately sold for
a profit. See I.R.C. § 5703(b)(1) (imposing excise tax “at the time of
removal of the tobacco products and cigarette papers and tubes”).
18 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

Indians, 480 U.S. 202, 215 n.7 (1987)). 9 Applying that rule,
the Court held that section 6 of the General Allotment Act
does not authorize the state to impose an excise tax on sales
of fee-patented land.

     The Court acknowledged Capoeman’s dictum that “‘the
literal language of [section 6] evinces a congressional intent
to subject an Indian allotment to all taxes’ after it has been
patented in fee.” Id. at 268 (quoting 351 U.S. at 7–8); see
also 25 U.S.C. § 349 (providing that upon issue of the fee
patent, “all restrictions as to sale, incumbrance, or taxation
of said land shall be removed”). But the Court explained that
the phrase “‘[a]ll taxes,’ in the sense of federal as well as
local, in no way expands the text [of the statute] beyond
‘taxation of . . . land.’” 502 U.S. at 268. (first emphasis
added). The Court observed that the excise tax on land sales
was not a tax “of . . . land,” but rather a tax on “the Indian’s
activity of selling the land.” Id. at 269 (emphasis added).
Thus, it did not qualify as the sort of taxation that section 6
of the Act authorizes states to impose on fee-patented land.
Id. (“The short of the matter is that the General Allotment
Act explicitly authorizes only ‘taxation of . . . land,’ not
‘taxation with respect to land,’ [or] ‘taxation of transactions
involving land.’”).

    Importantly, the Court in Capoeman was only able to
imply a tax exemption into the General Allotment Act by
reading sections 5 and 6 together. See generally 351 U.S. at
7 (reading section 6’s termination of “all restrictions as to
sale, incumbrance, or taxation” into section 5’s prohibition
on any “charge or incumbrance”). If excise taxes are not

    9
        The federal government—unlike the states—is categorically
permitted to tax Indians unless expressly prohibited from doing so by a
statute or treaty. See COHEN’S HANDBOOK § 8.02.
    UNITED STATES V. KING MOUNTAIN TOBACCO CO. 19

taxes “on . . . land” within the meaning of section 6, see
County of Yakima, 502 U.S. at 268, it follows that they are
not taxes “on land” encompassed by “the general words
‘charge or incumbrance’” in section 5. See Capoeman,
351 U.S. at 7; 25 U.S.C. § 349 (providing that upon issuance
of a fee patent, “all restrictions as to sale, incumbrance, or
taxation of said land shall be removed” (emphasis added)).
And since the federal government, unlike the states, is
categorically permitted to tax Indians unless expressly
prohibited from doing so by a statute or treaty, see Cohen’s
Handbook § 8.02, County of Yakima is consistent with
federal excise taxation of products manufactured on trust
land. Cf. Confederated Tribes of Warm Springs Reservation
of Or. v. Kurtz, 691 F.2d 878, 881–82 (9th Cir. 1982)
(holding tribe was liable for federal excise tax on
manufacture of truck chassis under I.R.C. § 4061 (repealed
1984)).

    Additionally, we note that King Mountain’s
interpretation of the General Allotment Act as extending to
federal excise taxes raises serious constitutional questions.
The Constitution grants Congress the “power to lay and
collect taxes, duties, imposts and excises,” but guarantees
that “all duties, imposts and excises shall be uniform
throughout the United States.” U.S. Const. art. I, § 8.
Legally speaking, allotments are part of the United States;
they are land held by the federal government in trust for the
benefit of individual Indians or tribes. See 25 U.S.C. § 348.
Exempting allotments as King Mountain urges would,
therefore, result in a federal excise tax on tobacco products
that is not “uniform throughout the United States.” Cf. Head
Money Cases, 112 U.S. 580, 594 (1884) (holding that a “tax
is uniform when it operates with the same force and effect in
every place where the subject of it is found”). Under the
circumstances, the constitutional avoidance canon favors the
20 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

Government’s interpretation of the Act, which exempts only
the trust land and income derived directly therefrom from
federal taxation. That interpretation is not inconsistent with
our case law and would in no way jeopardize the uniformity
of congressional excises “throughout the United States.” See
Clark v. Martinez, 543 U.S. 371, 381 (2005) (“[O]ne of the
canon’s chief justifications is that it allows courts to avoid
the decision of constitutional questions. It is a tool for
choosing between competing plausible interpretations of a
statutory text, resting on the reasonable presumption that
Congress did not intend the alternative which raises serious
constitutional doubts.”).

    Furthermore, even assuming that the General Allotment
Act’s exemption extends to federal excise taxes, King
Mountain cannot prevail because the excise tax in this case
does not “encumber” any allotment land. See United States
v. Anderson, 625 F.2d 910, 914 (9th Cir. 1980) (“[W]e
recognized that Capoeman’s point was that if an Indian’s
allotted land (or the income directly derived from it) was
taxed, and the tax was not paid, the resulting tax lien on the
land would make it impossible for him to receive the land
free of ‘incumbrance’ at the end of the trust period.”).

    For one thing, King Mountain is not the allottee of any
trust land. The land on which King Mountain operates was
allotted to and held in trust for Delbert Wheeler (and now for
his estate)—not King Mountain. The only trust land used to
grow tobacco for King Mountain’s products was allotted to
Wheeler or to other Yakama members—not King Mountain.
In the context of income taxation, we have held that “the
General Allotment Act provides no tax exemption for the
income a noncompetent Indian derives from other Indians’
[trust land], or his tribe’s trust land.” Id.; see also Fry v.
United States, 557 F.2d 646, 648 (9th Cir. 1977). That
     UNITED STATES V. KING MOUNTAIN TOBACCO CO. 21

principle recognizes that because “taxation of the taxpayer’s
individual profit derived from his lease of tribal (or other
allottees’ trust) land cannot possibly represent a burden or
encumbrance upon the tribe’s (or other allottees’) interest in
such land.” Anderson, 625 F.2d at 914. Anderson’s
reasoning applies with equal force to products that a
corporation manufactures on, or with the fruits of, trust land
allotted to others. Since no allottee of trust land is liable for
the excise tax in this case, an exemption would be
inconsistent with Anderson’s logic.

     Additionally, I.R.C. § 5763(d)’s threat of property
forfeiture “to the United States” does not apply to allotment
land. Most obviously, the United States is already the
titleholder of those lands. See 25 U.S.C. § 348 (providing
that “the United States does and will hold the land . . .
allotted” under the Act). King Mountain fails to explain how
it is possible to “forfeit” land to the existing titleholder. And
again, King Mountain is not the allottee of the trust land on
which it operates. Thus, King Mountain itself has no land,
or even a trust relationship with the United States, to
“forfeit” as a penalty for nonpayment. Any liability incurred
by King Mountain cannot result in a lien on or forfeiture of
allotment land, because the allotment on which King
Mountain operates is held in trust for Wheeler’s estate. See
Trust, Black’s Law Dictionary (West, 10th ed. 2014) (“The
right, enforceable solely in equity, to the beneficial
enjoyment of property to which another person holds the
legal title; a property interest held by one person . . . for the
benefit of a third party. . . .”) (emphasis added). The same
is true of allotments held in trust for other Indians that are
used to grow tobacco for King Mountain’s products.

    Notably, IRS regulations expressly prohibit forfeiture or
attachment of tax liens to property held in trust “by the
22 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

United States for an individual incompetent Indian.” See
26 C.F.R. § 301.6321-1 (2017). That is because the
regulations exclude allotment land from the definition of
“property” in which rights are extinguished, and which may
be subject to forfeiture or lien, under the Code. See
26 C.F.R. § 301.6321-1 (2017). Like the district court, we
are aware of no authority “permitting the forfeiture of
allotment land under any statute” or even “applying [the
forfeiture provisions of the Code] to . . . real property, as
opposed to personal property, even real property belonging
to non-Indians.”

   We thus hold that the General Allotment Act does not
provide a tax exemption from the federal excise tax on
manufactured tobacco products. King Mountain is liable for
payment of the tax and associated penalties and interest.

             B. TREATY WITH THE YAKAMAS

    In the 1850s, the United States entered into a series of
treaties with Indian tribes to extinguish the last set of
conflicting claims to lands lying west of the Cascade
Mountains and north of the Columbia River in what is now
the State of Washington. Washington v. Wash. State
Commercial Passenger Fishing Vessel Ass’n, 443 U.S. 658,
661–62 (1979). The Treaty with the Yakamas, 12 Stat. 951
(1855) (the “Treaty”) was among those treaties. Under the
Treaty, the Yakama ceded certain lands to the United States,
while other lands—and attendant rights therein—were
reserved to the Yakama. 12 Stat. at 951–52. The latter lands
now comprise the Yakama Indian Reservation in southern
Washington State, where King Mountain operates.

    Courts have recognized that the “Treaty embodies
spiritual as well as legal meaning for the [Yakama]; it
enumerates basic rights secured to the Yakama[] that
     UNITED STATES V. KING MOUNTAIN TOBACCO CO. 23

encompass their entire way of life.” Yakama Indian Nation
v. Flores, 955 F. Supp. 1229, 1238 (E.D. Wash. 1997).
Those “basic rights” appear in each of the Treaty’s eleven
articles. This appeal implicates Articles II, III, and VI.

    Article II of the Treaty establishes the physical
boundaries of the Yakama reservation in Washington State
and prohibits non-Indians from inhabiting reservation land
unless an exception applies.           After delineating the
reservation’s boundaries, Article II provides that “[a]ll . . .
tract [land] shall be set apart . . .for the exclusive use and
benefit of said confederated tribes and bands of Indians, as
an Indian reservation . . . .” 12 Stat. at 952. Article II also
affords compensation to the Yakama for their improvements
to lands that were ceded to the United States. Id.

    Article III addresses the Yakama’s right to travel. Prior
to the signing of the Treaty, the Yakama traveled
extensively. “Travel was significant for many reasons,
including trade, subsistence, and maintenance of religious
and cultural practices.” Flores, 955 F. Supp. at 1238. The
most important of these reasons, however, was trade. The
Yakama’s “way of life depended on goods that were not
available in the immediate area; therefore, they were
required to travel to the Pacific Coast, the Columbia River,
the Willamette Valley, California, and the plains of
Wyoming and Montana to engage in trade.” Id. Thus,
Article III of the Treaty reserves to the Yakama the right to
travel on public highways and the right to fish and hunt. In
relevant part, Article III reads:

       And provided, That, if necessary for the
       public convenience, roads may be run
       through the said reservation; and on the other
       hand, the right of way, with free access from
       the same to the nearest public highway, is
24 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

       secured to them; as also the right, in common
       with citizens of the United States, to travel
       upon all public highways.

12 Stat. at 952–53. During Treaty negotiations, then-
Governor of the newly created Washington Territory, Isaac
Stevens, made explicit the economic purpose of the
Yakama’s right to travel:

       You will be allowed to go on the roads to take
       your things to market, your horses and cattle.
       You will be allowed to go to the usual fishing
       places and fish in common with the whites,
       and to get roots and berries and to kill game
       on land not occupied by the whites. All that
       outside the reservation.

In the years after the Treaty was negotiated and ratified, the
Yakama continued to travel off-reservation extensively for
trading purposes. Flores, 955 F. Supp. at 1245.

   Finally, Article VI of the Treaty provides for the division
of reservation lands into individual lots, much like the
General Allotment Act:

       The President may, from time to time, at his
       discretion, cause the whole or such portions
       of such reservation as he may think proper, to
       be surveyed into lots, and assign the same to
       such individuals or families of the said
       confederated tribes and bands of Indians as
       are willing to avail themselves of the
       privilege, and will locate on the same as a
       permanent home.
        UNITED STATES V. KING MOUNTAIN TOBACCO CO. 25

12 Stat. at 954. 10 Article VI further guarantees that any such
division will occur “on the same terms and subject to the
same regulations as are provided in the sixth article of the
treaty with the Omahas.” Id. In turn, the Treaty with the
Omaha provides that individual lots “shall not be aliened or
leased for a longer term than two years; and shall be exempt
from levy, sale, or forfeiture . . . .” 10 Stat. 1043, 1044–45
(1854).

    King Mountain contends that each of these provisions
bestows an exemption from the federal excise tax on
manufactured tobacco products. “The applicability of a
federal tax to Indians depends on whether express exemptive
language exists within the text of the . . . treaty.” Ramsey,
302 F.3d at 1078. The requisite “language need not
explicitly state that Indians are exempt from the specific tax
at issue; it must only provide evidence of the federal
government’s intent to exempt Indians from taxation.” Id.
(emphasis added).

    As explained below, the Treaty with the Yakamas does
not contain “express exemptive language” sufficient to
relieve King Mountain of its liability for the federal excise
tax on manufactured tobacco products. For that reason, we
also decline to apply the Indian canons of construction when
analyzing the Treaty’s provisions. See Carpenter v. Shaw,
280 U.S. 363, 367 (1930) (“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.”).

       10
            In this sense, Article VI was a harbinger of the General Allotment
Act.
26 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

    The canon of construction favoring Indians “when
ambiguities are present in a statute or treaty does not come
into play absent [express exemptive] language.” Ramsey,
302 F.3d at 1079. King Mountain contends that Capoeman
“held that when both Treaty and General Allotment Act
claims are at issue, the court applies the Indian canons of
treaty construction.” But Capoeman did not so hold. To be
sure, Capoeman did apply the Indian canon, but it
exclusively analyzed a General Allotment Act issue.
Capoeman did not, however, establish a different analytical
framework for treaty interpretation where, as in this case,
potential exemptions under both the General Allotment Act
and a treaty are at issue. And in Dillon, we analyzed the
Treaty and the General Allotment Act issues separately,
refusing to employ the Indian canons to the Treaty claims
absent “definitively expressed” exemptive language.
792 F.2d at 853. Like the district court, we therefore decline
to apply the Indian canons of construction to King
Mountain’s treaty claims.

    1. Article II

    Article II of the Treaty provides that “[a]ll . . . tract land
shall be set apart[] for the exclusive use and benefit of said
confederated tribes and bands of Indians, as an Indian
reservation . . . .” 12 Stat. at 952. King Mountain’s
argument that this language provides an exemption the
federal excise tax is foreclosed by our decision in Hoptowit.
See 709 F.2d at 566. In Hoptowit, we held that “any tax
exemption created by” the “exclusive use and benefit”
language in Article II of the Treaty tracks the exemption
recognized in Capoeman for land or “income derived
directly from the land.”          Id.   As King Mountain
acknowledges, the federal excise tax applies to neither of
those.
     UNITED STATES V. KING MOUNTAIN TOBACCO CO. 27

    King Mountain goes on to claim that Hoptowit is
distinguishable because it “only addressed per diem
payments received by a Tribal Council member that were not
related to an allotment or manufacture of a product on an
allotment.” But Hoptowit’s language is clear: the scope of
“any exemption” under Article II is “limited to the income
derived directly from the land.” 709 F.2d at 566 (emphases
added). To the extent Article II contains “express exemptive
language,” Hoptowit confirms that such language does not
afford an exemption from federal excise taxes, including
those on manufactured tobacco products.

   2. Article III

    Article III of the Treaty provides “[t]hat, if necessary for
the public convenience, roads may be run through the
[Yakama] reservation,” but that “the right of way, with free
access from the same to the nearest public highway, is
secured to [the Yakama]; as also the right, in common with
citizens of the United States, to travel upon all public
highways.” 12 Stat. at 952–53.

    With respect to Article III, King Mountain’s argument is
foreclosed by Ramsey. In Ramsey, we held that the Treaty
with the Yakamas does not exempt Yakama Indians from
federal excise taxes on heavy-vehicle and diesel-fuel use.
302 F.3d at 1080. We reasoned that Article III’s guarantees
of “free access from the [reservation] to the nearest public
highway” and of the “right, in common with citizens of the
United States, to travel upon all public highways,” 12 Stat.
at 953, do not “provide express language from which we can
discern an intent to exempt the Yakama from federal heavy
vehicle and diesel fuel taxation.” 302 F.3d at 1079–80.

   The threshold inquiry is whether the language of the
Treaty “provide[s] evidence of the federal government’s
28 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

intent to exempt Indians from taxation,” id. at 1078
(emphasis added)—not whether the language of the Treaty
evinces the Government’s intent to exempt Indians from a
particular tax. Ramsey, 302 F.3d at 1079 (“Only if express
exemptive language is found in the text of the . . . treaty
should the court determine if the exemption applies to the
tax at issue.”). If the language of Article III did not provide
sufficient evidence of the Government’s intent to exempt the
Yakama from federal taxation in Ramsey, it surely does not
provide sufficient evidence of an intent to exempt the
Yakama from federal taxation here. See id. at 1080 (“[W]e
hold that [Article III] contains no ‘express exemptive
language.’”).      That Ramsey involved “off-reservation
activities” and a different federal tax, is immaterial. 11 The
language in Article III simply does not implicate taxation by
the federal government.

    King Mountain’s reliance on United States v. Smiskin,
487 F.3d 1260 (9th Cir. 2007), is misplaced. Smiskin
involved a criminal prosecution of two Yakama Indians
under the federal Contraband Cigarette Trafficking Act,
which expressly incorporates state law requirements related
to cigarette taxation. Id. at 1262. The Washington law at
issue in Smiskin, for example, requires that “individuals give
notice to state officials prior to transporting unstamped
cigarettes within the State.” Id. at 1262. The defendants in
Smiskin had not done so. Id. Thus, “[t]he critical question”
was “whether applying the State of Washington’s pre-
notification requirement to Yakama tribal members who

    11
        Contrary to King Mountain’s assertions, this case does not
“involve[] an excise tax on the right to travel.” See Flint, 220 U.S. at
162 (noting that, with respect to an excise tax, “[i]t is [the] distinctive
privilege which is the subject of taxation,” not discrete acts associated
with the privilege) (emphasis added).
     UNITED STATES V. KING MOUNTAIN TOBACCO CO. 29

possess and transport unstamped cigarettes violates the
Yakama Treaty of 1855.” Id. at 1264 (emphasis added). The
“express exemptive language” required to relieve Indians
from federal taxation was not at issue.

   3. Article VI

    Article VI of the Treaty authorizes the President to
“cause the whole or such portions of such reservation as he
may think proper, to be surveyed into lots,” and guarantees
that such division would occur “on the same terms and
subject to the same regulations as are provided in the sixth
article of the treaty with the Omahas.” 12 Stat. at 954.
Article VI of the Treaty with the Omaha, 10 Stat. 1043, in
turn, provides that such lots “shall not be aliened or leased
for a longer term than two years; and shall be exempt from
levy, sale, or forfeiture . . . .” Id. at 1044–45 (emphasis
added).

    With respect to Article VI, King Mountain’s argument
fails under Dillon. In Dillon, we concluded that “[t]he
suggestion that an income tax exemption can be inferred
from the alienation restrictions in Article 6 of the Treaty is
not well founded.” 792 F.2d at 853. The Supreme Court
appears to take the same position. See Superintendent of
Five Civilized Tribes, 295 U.S. at 421 (“Non-taxability and
restriction upon alienation are distinct things.”); see also id.
(noting that an Indian’s “wardship [status] with limited
power over his property does not, without more, render him
immune from the common burden”). Although this case
involves an excise tax, rather than an income tax, the
distinction that the Supreme Court, and we, have drawn
between “non-taxability” and “restrictions upon alienation”
applies with equal force. Simply put, we have concluded
that the restrictions on alienation in Article VI do not
implicate federal taxation. Dillon, 792 F.2d at 853.
30 UNITED STATES V. KING MOUNTAIN TOBACCO CO.

    King Mountain argues that Capoeman “confirmed that
the phrase in the text of the General Allotment Act
prohibiting any ‘charge or incumbrance’ on allotted lands
was sufficient to include taxation,” and that the “same
approach is required under the similar language contained in
Article VI.” But Article VI’s language is not so similar.
Indeed, the phrase “exempt from levy, sale, or forfeiture”
that is incorporated by reference into Article VI of the Treaty
is considerably more specific than the phrase all “charge and
incumbrance” in the General Allotment Act. “Exempt from
levy, sale or forfeiture” distinctly imposes a few enumerated
“restrictions upon alienation,” Superintendent of Five
Civilized Tribes, 295 U.S. at 421, while “charge and
incumbrance” does not. 12 For that reason, Dillon, and not
Capoeman, controls, and King Mountain is not entitled to an
exemption under Article VI. 13

   In sum, we hold that no provision of the Treaty with the
Yakamas contains “express exemptive language” sufficient
to exempt King Mountain from liability for the federal
excise tax on manufactured tobacco products.

                          CONCLUSION

    We affirm our longstanding rule that Indians—like all
citizens—are subject to federal taxation unless expressly
exempted by a treaty or congressional statute. Hoptowit,
709 F.2d at 566. In this case, neither the General Allotment

    12
       Moreover, as already noted, I.R.C. § 5763(d) does not apply to
allotment land.

    13
        In any event, Capoeman only recognizes that the language
“charge or incumbrance” is sufficient for an exemption from federal
taxation of the land or income derived directly therefrom, not from a
federal excise tax. 351 U.S. at 7–8.
    UNITED STATES V. KING MOUNTAIN TOBACCO CO. 31

Act nor the Treaty with the Yakamas expressly exempts
King Mountain from the federal excise tax on manufactured
tobacco products. King Mountain is therefore liable for
payment of the tax and associated penalties and interest.

   AFFIRMED.