Court Opinion

ID: 9427967
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:22:26.750063+00
Date Added: 2024-06-11T17:23:10.843993
License: Public Domain

Mr. Justice Stewart,
concurring in part and dissenting in part.
I join all but Part IV-B (2) and Part V of the Court’s opinion. My disagreement with Part V is for the reasons stated in Part III of Mr. Justice Rehnquist’s separate opinion. My disagreement with Part IV-B (2) stems from the belief that the State of Washington cannot impose the full combined measure of its cigarette and sales taxes on purchases by nontribal members of cigarettes from tobacco outlets on the Colville, Lummi, and Makah Reservations.
In Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 481-483, the Court held that a State has the power to tax sales of cigarettes to non-Indians by Indian tobacco outlets, despite the exemptions from state taxes possessed by an Indian tribe and its members themselves. The State may exert this power, according to Moe, even if it thereby deprives the tribe or the enterprises the tribe operates of substantial revenues. Cf., Thomas v. Gay, 169 U. S. 264. The cigarette and sales tax aspects of this case would, therefore, be wholly controlled by the Moe decision, but for the fact that all of the appellee Tribes levy their own cigarette excise taxes on the on-reservation distribution of cigarettes to non-Indians.
It seems clear to me that the appellee Tribes enjoy a power at least equal to that of the State to tax the on-reserva*175tion sales of cigarettes to nontribal members. Those sales are entered into and consummated in places and circumstances subject to the Tribes’ protection and control. Furthermore, the taxation of such transactions effectuates recognized federal policies by providing funds for the maintenance and operation of tribal self-government. See generally Indian Reorganization Act of 1934, 25 U. S. C. § 461 et seq; McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164, 179-181; Williams v. Lee, 358 U. S. 217.
Consequently, when a State and an Indian tribe tax in a functionally identical manner the same on-reservation sales to nontribal members, it is my view that congressional policy conjoined with the Indian Commerce Clause requires the State to credit against its own tax the amount of the tribe’s tax. This solution fully effectuates the State’s goal of assuring that its citizens who are not tribal members do not cash in on the exemption from state taxation that the tribe and its members enjoy. On the other hand, it permits the tribe to share with the State in the tax revenues from cigarette sales, without at the same time placing the tribe’s federally encouraged enterprises at a competitive disadvantage compared to similarly situated off-reservation businesses.
Turning to the case at hand, the approach I have outlined leads me to one conclusion with respect to sales on the Colville, Lummi, and Makah Reservations, and another with respect to sales on the Yakima Reservation. The Colville, Lummi, and Makah Tribes each collect from the operators of on-reservation tobacco outlets a tax of 40 to 50 cents per carton. Although in each case the tax is imposed at the time the cigarettes are distributed by the Tribe to the retail outlets, the pertinent taxing ordinance requires that the tax be passed on to the ultimate consumer. Thus, the actual event taxed, as with the State’s cigarette excise tax and general sales tax, is the sale to the nontribal purchaser. Since the Tribe’s cigarette tax operates in functionally the same way as do the State’s cigarette excise and general sales taxes, I would hold that the *176State must credit the tribal tax against the combination of its cigarette excise tax and general sales tax.
The tax imposed by the Yakima Tribe operates differently. The Tribe purchases cigarettes from out-of-state dealers and sells them to its licensed retailers. In connection with this transaction, the Tribe receives from its licensed retailers a tax of 22.5 cents per cigarette carton. Unlike the situation with the Colville, Lummi, and Makah taxes, however, there is no requirement that the tax then be added to the ultimate retail selling price. As a consequence, the event taxed is not the sale to the ultimate cigarette purchaser, and for this reason I believe that the State has no obligation to credit the Indian tax against the combination of its cigarette excise and general sales taxes.
Accordingly, I would vacate the judgment of the District Court insofar as it invalidates in toto the imposition of the State’s cigarette excise and general sales taxes upon cigarette sales on the Colville, Lummi, and Makah Reservations, and remand the case for further proceedings. I would reverse the judgment of the District Court insofar as it bars the imposition of the State’s taxes upon sales of cigarettes on the Yakima Reservation.