Oklahoma Tax Commission v. Chickasaw Nation

PETITIONER:Oklahoma Tax Commission
RESPONDENT:Chickasaw Nation
LOCATION:Georgia General Assembly

DOCKET NO.: 94-771
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 515 US 450 (1995)
ARGUED: Apr 24, 1995
DECIDED: Jun 14, 1995

Charles Rothfeld – for petitioner
Charles A. Rothfeld – on behalf of the Petitioner
Dennis W. Arrow – on behalf of the Respondent
Paul A. Engelmayer – on behalf of the United States, as amicus curiae, supporting the Respondent

Facts of the case


Media for Oklahoma Tax Commission v. Chickasaw Nation

Audio Transcription for Oral Argument – April 24, 1995 in Oklahoma Tax Commission v. Chickasaw Nation

Audio Transcription for Opinion Announcement – June 14, 1995 in Oklahoma Tax Commission v. Chickasaw Nation

Ruth Bader Ginsburg:

The second decision I have to announce is Oklahoma Tax Commission against Chickasaw Nation, 94-771.

This case concerns the taxing authority of the State of Oklahoma as it bears on the Chickasaw Nation, a federally recognized Indian tribe and all members of the tribe, taxes of two kinds are at issue.

First, Oklahoma’s exercise tax on motor fuels, second the state income tax.

The US Court of Appeals for the Tenth Circuit held that Oklahoma may not apply the state’s motor fuels tax to retail sales made by Chickasaw Nation convenient stores located on tribal land.

The Tenth Circuit also held that Oklahoma may not apply its income tax to wages of members of the tribe who are employed and paid by the tribe but who reside in Oklahoma outside Indian country.

We affirm the Court of Appeals ruling on the motor fuels tax but reverse the Tenth Circuit’s decision regarding the income tax.

Concerning the motor fuels tax, it is central law when Congress does not instruct otherwise that an exercise tax is un-impossible if its legal incidence falls on a tribe or its members for sales made within Indian country.

The Court of Appeals reasonably determined that the legal incidence of Oklahoma’s fuels tax falls on the retailer not on the wholesaler, not on the consumer.

We therefore hold that the state’s tax, as it is currently designed, cannot be collected for sales made at the tribe’s retail stores.

So, holding, we decline to consider the argument that the federal Hayden-Cartwright Act expressly authorizes states to tax motor fuels sales made on Indian reservation.

Oklahoma did not raise this point in the lower courts or in its petition for review and we will not fit as a court of first instance to resolve the matter.

Our decision as to the fuels tax is unanimous.

Turning to the state income tax question, we hold that Oklahoma may tax the wages of the Chickasaw nation and members of the Chickasaw Nation, who are employed and paid by the tribe but reside within the state of Oklahoma outside Indian country.

The treaty between the United States and the tribe guarantees the tribe and its members that no territory or state shall ever have a right to pass laws for the government of the Chickasaw Nation.

But that provision does not displays the general principle, which holds way both interstate and internationally that a sovereign may tax the income from all sources of those who reside within its borders.

On the application of Oklahoma’s income tax, the members of the tribe who work for the tribe but live outside Indian country, Justice Breyer has filed a dissenting opinion in which Justices Stevens, O’Connor and Souter joined.