Arizona Department of Revenue v. Blaze Construction Company - Oral Argument - December 08, 1998

Arizona Department of Revenue v. Blaze Construction Company

Media for Arizona Department of Revenue v. Blaze Construction Company

Audio Transcription for Opinion Announcement - March 02, 1999 in Arizona Department of Revenue v. Blaze Construction Company

Audio Transcription for Oral Argument - December 08, 1998 in Arizona Department of Revenue v. Blaze Construction Company

William H. Rehnquist:

We'll hear argument next in No. 97-1536, Arizona Department of Revenue v. the Blaze Construction Company.

Mr. Irvine.

Patrick Irvine:

Mr. Chief Justice, and may it please the Court:

This Court should adopt a categorical bright line rule that nontribal members who work as Federal contractors on Indian reservations are subject to nondiscriminatory State taxes unless Congress expressly provides otherwise.

This rule will clarify existing law, recognize a uniform rule that applies throughout the country, and provide certainty and predictability to contractors, the Federal Government, and to States.

This rule is consistent with this Court's precedents regarding Federal contractors and will not require the Court to rule... overrule any of its decisions concerning taxation of persons doing business with Indian tribes or tribal members.

This is the rule that the United States itself argues here should apply.


Sandra Day O'Connor:

Let me ask you a question.

There's something, legislation, called the Self-Determination Act under which, if I understand it correctly, an Indian tribe could opt to accept Federal money to build roads and projects like this using that money but itself administering the program.

Now, if the tribe had done so and had awarded the contract in question here, could... could the State have been able to impose the tax then, do you think?

Patrick Irvine:

--No, Your Honor.

Under the authority of the Ramah Navajo School Board case, if a contractor... a nontribal member contractor deals directly with a tribal entity, then there is no State tax.

Sandra Day O'Connor:

So, it was open to the tribe to protect itself had it wanted to do so--

Patrick Irvine:

That's correct, Your Honor.

None of the--

Sandra Day O'Connor:

--and its... and its contractors.

Patrick Irvine:

--None of the contracts at issue were... were taken over by tribes pursuant to self-determination, but each and every one of them could have been.

Sandra Day O'Connor:

Thank you.

Patrick Irvine:

In fact, if Congress decides that a different rule, a different preemption rule, should apply, it can certainly enact one.

It has the authority to provide that there is no State tax in almost any circumstance and certainly in... in circumstances dealing with Indian reservations.

Sandra Day O'Connor:

The... the tax here amounts to quite a bit of money all told, doesn't it?

How much is at stake?

Patrick Irvine:

The assessment, including interest, was approximately 1.2 million dollars.

The tax, as a percentage of the gross receipts for every contract, is 3.5 percent of the gross receipts.

Sandra Day O'Connor:

And yet, in fact, the State has provided very little in the nature of services, I guess, in connection with this contractor.

Patrick Irvine:

We don't argue that there are any direct services directly to these contracts or the particular geographic location.

As we cite in the brief, the State has not ignored these reservations and does provide numerous general services to the reservations and, indeed, to Blaze both on and off the reservation.

We have not argued that there have to be direct services.

And that's consistent with the rule that applies to any Federal contractor.