Court Opinion

ID: 9428045
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:22:38.028131+00
Date Added: 2024-06-11T17:23:11.390233
License: Public Domain

Mr. Justice Stevens,
with whom Mr. Justice Stewart and Mr. Justice Rehnquist join, dissenting.
The State of Arizona imposes use fuel and motor carrier license taxes on certain businesses in order to compensate it for their greater than normal use of public roads. See post, at 174, n. 3 (Powell, J., concurring). The issue originally presented to this Court was whether the State was prohibited from imposing such taxes on a non-Indian joint venture (Pinetop Logging Co.) hired by the petitioner Tribe to perform logging operations on the Fort Apache Reservation, when the taxes were based on Pinetop’s use of roads located solely within the reservation. In light of the concessions made by both sides at various stages of the litigation, however, I doubt that we should reach that issue in this case.. Moreover, even if the merits were properly before us, I could not agree with the Court’s determination that the state taxes are pre-empted by federal law.
Between November 1971 and May 1976, Pinetop paid under protest use fuel taxes of $19,114.59 and motor carrier license taxes of $14,701.42. The Arizona Court of Appeals determined that the latter assessment improperly denied Pinetop a 60% credit to which it was entitled under state law.1 After allowance for that credit, the total amount of the disputed taxes for the 4%-year period is reduced to about $25,000 or $5,000-$6,000 per year.
*154The taxes actually in dispute, however, are considerably less. Pinetop concedes that some of its operations are subject to tax and the State concedes that Pinetop is entitled to additional credits. To understand these concessions it is necessary to note that Pinetop’s vehicles operate on four different kinds of roads within the Fort Apache Reservation: (1) state highways; (2) federally funded (Bureau of Indian Affairs) roads serving recreational public needs; (3) tribal roads exclusively financed and maintained by the Indians; and (4) private logging roads built and maintained by loggers such as Pinetop.2
Although Pinetop represents that its use of the Arizona state highways within the reservation is extremely limited, it does not dispute its tax liability for such use. On the other hand, in this Court the State expressly conceded that its assessments were improper under state law to the extent that they applied to operations on either private logging roads3 *155or tribal roads.4 If it is conceded that the State may tax Pinetop’s use of public roads maintained by the State and may not tax the use of tribal or private roads, the question that arises is whether the public roads maintained by the *156Bureau of Indian Affairs are more akin to the former or to the latter. It appears that the BIA roads are like the state highways insofar as they are open to use by the general public.5 On the other hand, it also appears that they were constructed *157and maintained by the Federal Government and are policed by federal and tribal officers.6
Under these circumstances I think the most appropriate disposition would be to vacate the judgment of the Arizona Court of Appeals and remand for further consideration in light of the concessions made on behalf of the State in this Court. As the Court and Mr. Justice Powell point out, it is difficult to see why those concessions are not an acknowledgment that the State has no authority to tax the use of roads in which it has no interest. See ante, at 148, n. 14 (opinion of the Court); post, at 174 (Powell, J., concurring). If the state court were given an opportunity to focus on this point, we might well find that there is no remaining federal issue to be decided.
Even assuming, however, that the state courts would uphold the imposition of taxes based on the use of BIA roads, despite their similarities to private and tribal roads, I would not find those taxes to be pre-empted by federal law. In Warren Trading Post v. Arizona Tax Comm’n, 380 U. S. 685, the Court held that state taxation of a non-Indian doing business with a tribe on the reservation was pre-empted because the taxes threatened to “disturb and disarrange” a pervasive scheme of federal regulation and because there was no governmental interest on the State’s part in imposing such a burden. See Central Machinery Co. v. Arizona State Tax Comm’n, post, at 168 (Stewart, J., dissenting). In this case we may assume, arguendo, that the second factor relied *158upon in Warren Trading Post is present. As a result, Pine-top may well have a right to be free from taxation as a matter of due process or equal protection.7 But I cannot agree that it has a right to be free from taxation because of its business relationship with the petitioner Tribe.
As the Court points out, the Federal Government has imposed a detailed scheme of regulation on the tribal logging business. Thus, among other things, the BIA approves and sometimes drafts contracts between the Tribe and non-Indian logging companies such as Pinetop and requires the Tribe and its contractors to follow BIA’s dictates as to where to cut, haul, and mark timber, and as to which roads to construct and repair. Ante, at 148, n. 14. The Court reasons that, because the imposition of state taxes on non-Indian contractors is likely to increase the price of their services to the Tribe and thus decrease the profitability of the tribal enterprise, the taxes would substantially interfere with this scheme. Thus, the Court states that the taxes threaten the “overriding federal objective” of guaranteeing Indians all the profits the forest is capable of yielding, “undermine” the Federal Government’s ability to set fees and rates with respect to non-Indian contractors, and “adversely affect the Tribe’s ability to comply with the sustained-yield management policies imposed by federal law.” Ante, at 149-150.
From a practical standpoint, the Court’s prediction of massive interference with federal forest-management programs seems overdrawn, to say the least. The logging operations involved in this case produced a profit of $1,508,713 for the Indian tribal enterprise in 1973. As noted above, the maximum annual taxes Pinetop would be required to pay would *159be $5,000-$6,000 or less than 1% of the total annual profits. Given the State’s concession in this Court that the use of certain roads should not have been taxed as a matter of state law, the actual taxes Pinetop would be required to pay would probably be considerably less.8 It is difficult to believe that these relatively trivial taxes could impose an economic burden that would threaten to “obstruct federal policies.”
Under these circumstances I find the Court’s reliance on the indirect financial burden imposed on the Indian Tribe by state taxation of its contractors disturbing. As a general rule, a tax is not invalid simply because a nonexempt taxpayer may be expected to pass all or part of the cost of the tax through to a person who is exempt from tax. See United States v. Detroit, 355 U. S. 466, 469; cf. Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134. In Warren Trading Post the Court found an exception to this rule where Congress had chosen to regulate the relationship between an Indian tribe and a non-Indian trader to such an extent that there was no room for the additional burden of state taxation. In this case, since the state tax is unlikely to have a serious adverse impact on the tribal business, I would not infer the same congressional intent to confer a tax immunity. Although this may be an appropriate way in which to subsidize Indian industry and encourage Indian self-government, I would require more explicit evidence of congressional intent than that relied on by the Court today.
I respectfully dissent.

 Under Arizona law, logging operations are exempt from the motor carrier license tax if the wood they haul is used for pulpwood. In this case 60% of the logs hauled by Pinetop were to be used for pulpwood.

 In paragraph XIII of their complaint, petitioners alleged:
“There are four categories of roads in the Ft. Apache Indian Reservation which are used by the Plaintiffs in their logging operations: (1) tribal roads financed and maintained by the Indians exclusively; (2) federally funded (Bureau of Indian Affairs) roads serving recreational public needs; (3) state highways; and (4) logging roads built and maintained by loggers. In transporting timber from the woods to the sawmill, plaintiffs’ vehicles travel substantially over tribal and BIA roads, although short portions of many of the trips are on state highways.
“The only category of roads on the Fort Apache Indian Reservation which are built or maintained by the State of Arizona, is category (3), state highways. Categories (1), (2), and (4) are financed and maintained by sources other than monies from the State of Arizona. Tribal, BIA and logging roads are not public highways within the meaning of Arizona Revised Statutes Sec. 40-601.9, and thus any use fuel and license motor carrier taxes on these roads are inappropriate.”

 At oral argument, the Assistant Attorney General of the State of Arizona stated:
“But so long as' the road remained a private thoroughfare they would not be so traveled and use of those road [sic] would not be subject to the State tax.” Tr. of Oral Arg. 32.
*155Later in the argument he was asked the following question and gave the following answer:
"Mr. Macpherson, quite apart from the question in this case which involves Indian tribes, what about a private owner of land — whether it is the Weyerhauseur Company or a rancher who owns many square miles of ranch land, does Arizona impose a tax upon his fuel if the vehicle that he owns is used exclusively on his own private property 365 days a year, or this year 366, and never on the public roads of Arizona?
“MR. MACPHERSON: It does not, Your Honor.” Id., at 39.

 With respect to tribal roads, the Assistant Attorney General advised the Court at oral argument:
“However, the fact of the matter is that under current State law, under the legislative scheme that exists in Arizona right now, Arizona has no intention of going forward on some purported theory that because the Court of Appeals decision says we can, that we can go ahead and tax use on these tribal roads. I have been assured of that by my client by telephone last night. And other than that we would put that before the Court to apprise the court of what the true facts are.” Id., at 35.
In rebuttal, counsel for petitioners expressed surprise at, but nevertheless accepted, the concession made by the State. Counsel stated:
“My good friend, Mr. Macpherson, has just said some remarkable things.
“I think I hear him saying that the State is no longer interested in collecting taxes from tribal roads on the reservation which are not Bureau of Indian Affairs roads. If that is what he said, then I am delighted to accept him accept his concession. But I must also correct some of the suggestions he has made.
“His predecessor, the Attorney for the State of Arizona, argued in the State appellate courts that the State was claiming the right to tax tribal roads. The judgment of the lower court gives the State the right to tax tribal roads. And that is the judgment we are burdened with and that is the judgment which we bring to this Court.
“Our opening briefs state that is the issue. Their briefs acknowledge that is the issue . . . and that was the issue before the Court.
“Trial counsel, Mr. Beus who is here, informs me over the lunch period *156that his understanding was that administrative agreement included the payment of certain taxes allocable to tribal roads.
"QUESTION: Well, as I say, that is of some importance, at least to me, whether there is an issue to taxes, either fuel or gross receipts taxes imposed on vehicles insofar as their use was confined to tribal roads.
“Is there, or is there not a dispute?
“MR. WAKE: I submit there was until Mr. Macpherson spoke.
“QUESTION: Well, now you submit there isn’t. And I—
“MR. WAKE: I submit there isn’t because [counsel] has conceded the issue or [is] withdrawing the issue. And perhaps he can clarify his remarks.
“QUESTION: You say you accept it gladly.
“MR. WAKE: I accept it gladly but—
“QUESTION: You have won your case on the—
“MR. WAKE: Your Honor, I would point out that that being the concession as I understand it, it would be appropriate in any event the judgment of the lower court to be correct in that regard since — ” Id., at 54^56.

 The following colloquy occurred at oral argument:
“QUESTION: What I meant to say is your real fight is over the right to tax on BIA roads.
“Does the record tell us much about those roads, for example does it tell us whether the State police are on those roads or whether they have speed limits or things like that?
“MR. MACPHERSON: Your Honor, the record does not specifically go into that much detail.
“QUESTION: However, it presents us with a hypothetical case quite different from the one you asked us to decide.
“MR. MACPHERSON: Well, Mr. Justice Stevens, the case is — we felt it necessary as an ethical consideration to apprise the Court of what the actual situation is.
“But, having said that, the issue, the legal issue, if it please the Court, may still be decided with respect to the BIA road use. The fact of the matter is that BIA roads pursuant to Federal — the Code of Federal Regulations are required to be open to free public use, as a matter of Federal law.” Id., at 36-37.

 “QUESTION: Did I understand you to say that Arizona has no responsibility for maintaining the BIA roads?
“MR. MACPHERSON: This is correct, Your Honor.
“QUESTION: And did it contribute to the construction of those roads?
“MR. MACPHERSON: So far as the record shows, it did not, Your Honor.
“QUESTION: And no police responsibility, either?
“MR. MACPHERSON: That is correct, Your Honor. . . Id., at 41-42.

 The Due Process Clause may prohibit a State from imposing a tax on the use of completely private roads if the tax is designed to reimburse it for use of state-owned roads. Or it may be that once the State has decided to exempt private roads from its taxing system, it is also required, as a matter of equal protection, to exempt other types of roads that are identical to private roads in all relevant respects.

 The parties have not told us what portion of the taxes is attributable to the use of each of the various types of roads. Thus, we cannot determine how much tax Pinetop would be required to pay for its use of BIA roads.