Court Opinion

ID: 9557952
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:00:52.382663+00
Date Added: 2024-06-11T09:07:48.375022
License: Public Domain

SUTIN, Judge (specially concurring).. I concur in the result. Legal problems which involve disputes between Indian tribes and the State of New Mexico have reached an eruptive stage. One of the explosive factors is the gross receipts tax on non-Indians doing work on Indian land. A philosophical concept stated in 1832 is applicable today. Justice McLean, in a concurring opinion written in Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 8 L.Ed. 483 (1832) said: * * * [T]heir existence within a state, as a separate and independent community, may seriously embarrass or obstruct the operation of the state laws. If, therefore, it would be inconsistent with the political welfare of the states, and the social advance of their citizens that an independent and permanent power should exist within their limits, this power must give way to the greater power which surrounds it, or seek its exercise beyond the sphere of state authority. [Emphasis added] [31 U.S. at 594], The taxpayer is a foreign corporation authorized to do business in New Mexico. It strongly argues, (1) that it is protected from paying a gross receipts tax because it sits under the shelter of Nambe Pueblo to withstand the power of the state to tax; (2) that “The record is completely devoid of any State, County or City governmental services available to the Pueblo of Nambe, * * * The Bureau’s assessment * * * is an interference with the sovereignty of the Nambe * * *. Taxpayer’s activities * * * are subject to the taxing power of the Nambe Tribe * * *. The Nambe has not consented to the Bureau of Revenue assessment * * *. New Mexico’s attempt to tax the gross receipts * * * is an attempt to regulate what business may be carried on with the Pueblo * * *. The essential purpose of taxpayer’s activity is the enhancement of Indian property * * *. [T]he practical effect would be to discourage contractors from commencing projects on Indian land.” [Emphasis added]. These are strong moral arguments for the Nambe Pueblo to make to assist taxpayer. Taxpayer claimed the Pueblo was an indispensable party to this proceeding but that motion was denied. The Gross Receipts Tax Act does not tax Indians or Indian lands. It does not interfere with Indian sovereignty. The Nambe Pueblo did not employ taxpayer. Taxpayer is engaged in the construction of the Nambe Pueblo Dam pursuant to contract with the United States Department of Interior, Bureau of Reclamation. Its receipts come from the federal government for performing services in New Mexico. The time has come to state emphatically that Indian sovereignty does not exceed state authority to tax when a non-Indian corporation comes to New Mexico to work on Indian land for the federal government. Nambe Pueblo is greatly benefited by these construction activities. It does not suffer by state taxation. It may also tax with knowledge that “the power to tax involves the power to destroy” its economic development. It may suffer by double taxation, but it cannot claim that its power to tax can override the power of the state to tax to preserve the political welfare of the state. Pueblo Indians constitute a tribe. Pueblo lands are Indian Country. Pueblo Indians are wards of the United States occupying a special status of tutelage. Sangre De Cristo Dev. Corp., Inc. v. City of Santa Fe, 84 N.M. 343, 503 P.2d 323 (1972). Taxpayer relies on Your Food Stores, Inc. (NSL) v. Village of Espanola, 68 N.M. 327, 361 P.2d 950 (1961). This case does hold that New Mexico has no governmental power over Indians or Indian lands, except where such jurisdiction has been specifically granted by Act of Congress, or sanctioned by the decisions of the Supreme Court of the United States. It said: We think that the Pueblo Indian tribes possess inherent sovereignty except where it has been specifically taken from them by congressional action. [68 N.M. at 331, 361 P.2d at 954]. What is meant by “inherent sovereignty”? Your Food Stores said that the state cannot annex Indian land leased by the Pueblo to a corporation for use as a supermarket and variety store. The lease was void because the land was not within the corporate limits of the Village of Española. Sangre De Cristo holds that where Congress has preempted all control over the leasing of Indian lands, which included the subdivision thereof, there is no room for the state to impose additional or conflicting controls relating to the subdivision, even though the Indian land lies within the corporate limits of the City of Santa Fe, and the land is leased to a domestic corporation. “Inherent sovereignty’’ means that the tribe has full control over its land, its use and development, and its people until this power is specifically taken away by Congress. It has power to adopt a constitution, with executive, legislative and judicial authority to govern its people. It may develop an Indian society in keeping with its traditions. It may develop its lands, industrialize its economy, assess taxes' and live in complete freedom of thought, ideas and culture on its own territory. New Mexico cannot exercise any governmental power over the Indians or their land. However, where the activity of the Indians obstructs the operation of state laws and is inconsistent with the political welfare of the state and the social advance of its citizens, Indian “inherent sovereignty” must give way to the power of the state to enact legislation. The power of the state to tax gross receipts of non-Indian corporations that do business on Indian lands within the territorial boundaries of the state, are essential to the political welfare and social development of the citizens in this state. The Indian tribe and the federal government cannot allow the non-Indian corporation to escape taxation unless Congress or New Mexico exempt it from taxation. No deviations by contract, no process of anamorphosis, no misinterpretation of the tax laws, no speculation on Indian development, can assist non-Indians to escape the burdens of taxation. To solve this problem, Indians must look to the Congress of the United States or the Legislature of New Mexico to exempt non-Indians who fall within the meaning of the Gross Receipts Tax Act. “We find no federal preemption.” Palm Springs Spa, Inc. v. County of Riverside, 18 Cal.App.3d 372, 95 Cal.Rptr. 879, 883 (1971). Taxpayer stated at the hearing that it reviewed the bid items of the Bureau of Reclamation. It concluded that the contract was not subject to the New Mexico Gross Receipts Tax Act based upon the advice of its vice-president and a national C.P.A. firm. Taxpayer could have submitted its problem to the Attorney General of New Mexico or the Commissioner of Revenue to determine whether the burden of taxation was a reality. It cannot now seek succor by reliance on Indian sovereign immunity. It must establish that its activity in New Mexico is not subject to the Gross Receipts Tax Act. Indian sovereignty vs. state sovereignty has been a long, controversial, complex legal problem. This problem will continue as long as the Indian people desire to remain wards of the United States. Taxpayer seeks two additional avenues of escape from taxation not mentioned in the majority opinion. First, it says that “the tax would be an impediment to the free flow of commerce and to the ‘discernable Federal policy’ of encouraging Indians to be economically self-sufficient on the reservation.” It cites as authority Makah Indian Tribe v. Clallami County, 73 Wash.2d 677, 440 P.2d 442 (1968) and the United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478, 47 L.Ed. 532 (1903). Makah Indian Tribe holds: Congress neither having specifically provided for the taxation by the state * * * of personal property owned by a Makah Indian, nor having impliedly granted such power, the ad valorem personal property tax by Clallam County may not be imposed upon personal property which is continuously used, kept and maintained on the Makah Reservation by a Makah Indian. [440 P.2d at 448], ' I agree. This quotation is followed by a dissertation on the natural dignity of the American Indian with which I agree. It says that the resolution of the problem of benefits and correlative responsibilities of Indian citizenship is one for the Congress and the President to solve, with which I agree. Rickert holds that lands held by allottees and the other Indians named in the General Allotment Act of 1887, with permanent improvements, and personal property thereon, are not subject to assessment and taxation by the taxing authorities of South Dakota. The quarrel between Indian tribes and states over the duty of Indians, with full citizenship rights, to share the burden of government with other citizens of the state are considerations to be addressed to Congress. Taxpayer’s reliance on these cases suffers the pangs of weakness in its position. Second, taxpayer contends that state taxation of the taxpayer is interference with the self-government power of the Nambe Pueblo to tax. Taxpayer relies on Littell v. Nakai, 344 F.2d 486 (9th Cir. 1965), and Iron Crow v. Ogallala Sioux Tribe, 129 F.Supp. 15 (D.S.D.1955). These cases involve internal Indian quarrels within the jurisdiction of the Indian tribal courts, and not the federal courts. They establish the self-governing power of Indian tribes to settle their own problems. They have the power to tax. Taxpayer’s last stand meets with defeat. Cicero said long ago that “Taxes are the sinews of the state.” Taxpayer cannot destroy that power.