Court Opinion

ID: 9428047
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:22:38.298932+00
Date Added: 2024-06-11T17:23:11.396660
License: Public Domain

Mr. Justice Stewart,
with whom Mr. Justice Powell, Mr. Justice Rehnquist, and Mr. Justice Stevens join, dissenting.
The question before us is whether the appellant is immune from a state tax imposed on the proceeds of the sale by it of farm machinery to an Indian tribe. The Court concludes that an affirmative answer is required by the rationale of Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685, a case that is similar in some respects to this one. While I agree that Warren Trading Post states the relevant legal principles, I cannot agree that those principles lead to the result reached by the Court in this case. Accordingly, I dissent.
In Warren Trading Post, the Court held that the State of Arizona may not impose the same tax involved here on the operator of a federally licensed retail trading business located on an Indian reservation. The Court determined that *167the “apparently all-inclusive [federal] regulations and the statutes authorizing them,” id., at 690, under which the trader in that case had been licensed, were “in themselves sufficient to show that Congress has taken the business of trading on reservations so fully in hand that no room remains for state laws imposing additional burdens on traders,” ibid.
As the Court recognizes, the circumstances of this case differ from those presented by Warren Trading Post. Specifically, the appellant here is not a licensed Indian trader and does not have a permanent place of business on the reservation. See ante, at 164. The Court considers these differences immaterial, however, apparently because, as it reads the relevant statutes, the appellant could have been subjected to regulation somewhat like that in Warren Trading Post, though in fact it was not. Thus the Court relies on 25 U. S. C. § 264, which makes it unlawful for “[a]ny person .. . to introduce goods, or to trade” without a license “in the Indian country, or on any Indian reservation.”
Even assuming that the Court correctly reads the statutory language to reach anybody who sells goods “on any Indian reservation,” I cannot understand why the Court ascribes to that fact the significance that it does. The question, after all, is not whether the appellant may be required to have a license, but rather, as the Arizona Supreme Court correctly believed, whether the state tax “runs afoul of any congressional enactments” dealing with the affairs of reservation Indians, State v. Central Machinery Co., 121 Ariz. 183, 184, 589 P. 2d 426, 427 (1978). This Court has consistently recognized that “ ‘[e]nactments of the federal government passed to protect and guard its Indian wards only affect the operation, within the [reservation,] of such state laws as conflict with the federal enactments,’ ” Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 483, quoting United States v. McGowan, 302 U. S. 535, 539.1 With regard to the determinative issue *168whether Arizona’s tax in this case is inconsistent with federal law, the Court says only that “[i]t is the existence of the Indian trader statutes . . . that pre-empts the field of transactions with Indians occurring on reservations,” ante, at 165, and that those statutes must be given “ 'a sweep as broad as [their] language,’ ” ante, at 166, quoting United States v. Price, 383 U. S. 787, 801.2
But the rationale of the decision in Warren Trading Post, supra, was not so simple as this. The grounds of that decision were twofold. First, as the Court today reiterates, a tax on the gross income of a licensed trader residing on the reservation could “disturb and disarrange the statutory plan Congress set up in order to protect Indians against prices deemed unfair or unreasonable,” id., at 691. Second, the Court saw in that case no governmental justification to support the State’s “put[ting] financial burdens on [the trader] or the Indians with whom it deals in addition to those Congress or the tribes have prescribed,” ibid. Because Congress for nearly a century had “left the Indians . . . free to run the reservation and its affairs without state control,” Arizona had been “automatically relieved ... of all burdens for carrying on those same responsibilities,” id., at 690. That being so, the Court did not “believe that Congress intended to leave to the State the privilege of levying this tax,” id., at 691.
Neither of these considerations is present here. First, although the appellant was obliged to obtain federal approval of the sale transaction in this case, see 25 U. S. C. §§ 262, 264, it was not subjected to the much more comprehensive regulation that governs licensed traders engaged in a continuous course of dealing with reservation Indians. See 25 CFR *169Part 251 (1979). In these circumstances, the Court’s expressed belief that the minimal regulation to which the appellant was subject “leaves no room” for the state tax in this case strikes me as hyperbolic. Even were the appellant administratively required to possess a license, taxation of an isolated sale by it to the Indians simply would not jeopardize those federal and tribal interests involved in the thorough regulation of on-reservation merchants trading continuously with the Indians — the situation dealt with in Warren Trading Post. There the financial burdens of state taxation would have impaired the Commissioner’s ability to prescribe “the kind and quantity of goods and the prices at which such goods shall be sold to the Indians,” 25 U. S. C. § 261, and might have threatened the very existence of the resident trader’s enterprise, on which the tribe depended for its essential commerce. No similar risks exist in a case such as this one, involving an isolated sales transaction. The viability of the seller may be assumed from its willingness to trade, and the reasonableness of the terms of sale may be guaranteed, as they were in this case, by the Commissioner’s review of them. It is true that the prices paid by the Indians might be lower if the appellant is immune from the tax. But that is hardly relevant. The Court has on more than one occasion sustained state taxation of transactions occurring on Indian reservations, notwithstanding the fact that the economic burden of the tax fell indirectly on the Indian tribe or its members. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 151, 156-157; Moe v. Salish & Kootenai Tribes, supra. Cf. Mescalero Apache Tribe v. Jones, 411 U. S. 145, 148.
Second, the Court inexplicably ignores the State’s wholly legitimate purpose in taxing the appellant, a corporation that does business within the State at large and presumably derives substantial benefits from the services provided by the State at taxpayer’s expense.3 Aside from entering the reser*170vation to solicit and execute the contract of sale and to receive payment, circumstances that are certain to characterize all sales to reservation Indians after today’s decision, the appellant conducts its affairs in all respects like any other business to which the State’s nondiscriminatory tax con-cededly applies. Thus, quite unlike the circumstances in Warren Trading Post, the State in this case has not been relieved of all duties or responsibilities respecting the business it would tax. Yet, despite the settled teaching of the Court’s decisions in this area that every relevant state interest is to be given weight, see Washington v. Confederated Tribes of Colville Indian Reservation, supra; McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164, 171; cf. White Mountain Apache Tribe v. Bracker, ante, at 144, the Court does not even consider the State’s valid governmental justification for taxing the transaction here involved.
It is important to recognize the limits inherent in the principles of federal pre-emption on which the Warren Trading Post decision rests. Those limits make necessary in every case such as this a careful inquiry into pertinent federal, tribal, and state interests, without which a rational accommodation of those interests is not possible. Had such an inquiry been made in this case, I am convinced the Court could not have concluded that Arizona’s exercise of the sovereign power to tax its non-Indian citizens had been pre-empted by federal law.

 As Mr. Justice Powell observes in his dissenting opinion, post, at 172, the Court in Moe v. Salish & Kootenai Tribes rejected the contention that *168the Indian trader statutes occupy the field so completely as to pre-empt all state laws affecting those who trade on the reservation with reservation Indians.

 The Court’s construction of the trader statutes, in fact, sweeps far more broadly than their language, no portion of which indicates a congressional intention to immunize anybody from state taxation.

 “The State also has a legitimate governmental interest in raising *170revenues, and that interest is likewise strongest when the tax is directed at [economic value created off of the reservation] and when the taxpayer is the recipient of state services.” Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 157,