McClanahan v. Arizona State Tax Commission

PETITIONER: Rosalind McClanahan
RESPONDENT: Arizona State Tax Commission
LOCATION: Navajo Reservation

DOCKET NO.: 71-834
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: State appellate court

CITATION: 411 US 164 (1973)
ARGUED: Dec 12, 1972
DECIDED: Mar 27, 1973

Harry R. Sachse - argued the cause for the United States as amicus curiae urging reversal
James D. Winter - Assistant Attorney General of Arizona, argued the cause for appellee
Richard B. Collins - argued the cause for the appellant
Robert B. Collins -

Facts of the case

Rosalind McClanahan was a member of the Navajo Indian nation who lived on the Navajo Reservation in Apache County, Arizona. Her employer withheld $16.20 in 1967 for Arizona state income taxes. McClanahan sought the return of her withheld income. She claimed that since she was a Navajo Indian residing on the reservation and since her income was derived completely on the reservation, she was exempt from state taxation. When her request was denied, she filed suit in Apache County Superior Court. The Superior Court dismissed her claim. The Court of Appeals of Arizona affirmed the dismissal. The Supreme Court of Arizona rejected her petition for review.


Did the State of Arizona have a right to tax Navajo Indians residing on the Navajo Reservation if their income is entirely from reservation sources?

Media for McClanahan v. Arizona State Tax Commission

Audio Transcription for Oral Argument - December 12, 1972 in McClanahan v. Arizona State Tax Commission

Warren E. Burger:

Mr. Collins.

Robert B. Collins:

Mr. Chief Justice and may it please the Court.

This case is here on appeal from the state courts of Arizona where appellant filed suit to recover state income tax withheld from her income.

She claims that the state has no jurisdiction to collect its state income tax from her on a ground that she is a Navajo Indian who at all relevant times live and worked within the boundaries of Navajo Indian reservation.

The State Courts of Arizona denied her claim despite an unbroken line of decisions by this Court that States have no jurisdiction over the reservation affairs of Indians.

This Court first interpreted the constitutional relationship between the States and Indian tribes in 1982 in the case of Worcester against Georgia.

Mr. Chief Justice Marshall’s opinion reviews in detail the constitutional provisions that relate to Indians and concludes that plain area authority over Indian is conferred by the Constitution on the Federal Government and at state laws can have no force or effect on Indian reservations.

Subsequent decisions of this Court modified that decision in one area where the referrals of non-Indians only are involved on an Indian reservation and where the Indians were not directly involved at all.

In addition, Congress has exercised its plain area authority on certain occasions to grant to the States authority over reservation Indians.

Mr. Collins, orient me a little bit as, are there vest sums involved in this test case or the mainly principal that we are talking about?

I realize how important the principal is.

Robert B. Collins:

Your Honor, the actual amount of tax that appellant sought to regain was $16.20.

Yes, but are there other sums that other taxpayers are concerned with?

Robert B. Collins:

Your Honor, she filed the action as a class action that never reached any decision as to whether it was properly a class action under state procedures in the State of Arizona.

I’m sure that the court decision bears on -- on thousands of Indians in the State of Arizona.

Arizona nearly a hundred thousand Indians, most of them live on reservations.

I think it affects them all.

Does the record show precisely what her work was that produce the income that was taxed?

Robert B. Collins:

I don’t believe so, Your Honor because the matter was decided on the motion o dismiss.

The complaint stands alone as an allegation of fact.

She works for a bank on the reservation.

I don’t know that -- that’s in the record.

One last question on the -- has the tribe itself ever levied an income tax on the members of it?

Robert B. Collins:

No, Your Honor.

The tribe has a sales -- when effect to sales tax, but has no income tax.

Thank you.

Robert B. Collins:

The decisions of this Court where summed up in the only treaties on Indian law ever produced by Mr. Felix Cohen in 1942.

He stated, “State laws generally are not applicable to tribal Indians on an Indian reservation except for Congress as expressly provided that state law shall apply.

It follows the Indians and Indian property on an Indian reservation, are not subject to state taxation, except by virtue of an expressed authority conferred upon the State by act of Congress.”

It is our contention that rule applies here that Arizona has acted in contravention of that rule and that this Court should reverse on that account.