Wagnon v. Prairie Band Potawatomi Nation

PETITIONER:Joan Wagnon, Secretary, Kansas Department of Revenue
RESPONDENT:Prairie Band Potawatomi Nation
LOCATION:United States Court of Appeals for the Ninth Circuit

DOCKET NO.: 04-631
DECIDED BY: Roberts Court (2005-2006)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 546 US 95 (2005)
GRANTED: Feb 28, 2005
ARGUED: Oct 03, 2005
DECIDED: Dec 06, 2005

Edwin S. Kneedler – argued the cause for Respondent
Ian Heath Gershengorn
Ian H. Gershengorn – argued the cause for Respondent
Theodore B. Olson – argued the cause for Petitioner

Facts of the case

The Prairie Band Potawatomi Nation, a sovereign Indian tribe, raises revenue with a tax on the gasoline sold at an on-reservation gas station. The Nation purchases the gas from non-Indian, off-reservation distributors. Kansas imposed a tax on distributors of motor fuels, which the distributors pass on to the gas stations they sell to. The Nation sued Wagnon, the Secretary of the Kansas Department of Revenue, seeking to avoid the tax. The Nation argued that the state’s tax interfered with the tribe’s sovereignty, and therefore was not allowed by federal law. Wagnon claimed that since the tax was on off-reservation suppliers, the Nation’s sovereignty was unaffected. The District Court accepted that argument and ruled for Wagnon. The Tenth Circuit Court of Appeals reversed, applying the interest-balancing test prescribed byWhite Mountain Apache Tribe v. Bracker. The Circuit Court found that the tribe’s interests in economic development, tribal self-sufficiency, and strong tribal government out-weighed Kansas’s interest in raising revenue.


When a State taxes receipt of fuel by non-tribal, off-reservation distributors, manufacturers, and importers, should theWhite Mountain Apache v. Bracker interest-balancing test apply if the fuel is later sold by an Indian tribe?

Media for Wagnon v. Prairie Band Potawatomi Nation

Audio Transcription for Oral Argument – October 03, 2005 in Wagnon v. Prairie Band Potawatomi Nation

Audio Transcription for Opinion Announcement – December 06, 2005 in Wagnon v. Prairie Band Potawatomi Nation

John G. Roberts, Jr.:

Justice Thomas has the opinion in Wagnon versus Prairie Band of Potawatomi Nation.

Clarence Thomas:

This case comes to us on a writ of certiorari to the United States Court of Appeals for the 10th Circuit.

Petitioner, the State of Kansas, imposes a tax on the receipt of motor fuel by distributors within its boundaries.

Kansas supplies that tax to motor fuel received by non-Indian fuel distributors, who subsequently deliver that fuel to a gas station owned by, and located on, the reservation of Petitioner, the Prairie Band Potawatomi Nation.

The Court of Appeals determined that this application of the Kansas motor-fuel tax was an impermissible affront to petitioner’s sovereignty and held that the tax was invalid under the interest-balancing tests that we set forth in White Mountain Apache Tribe versus Bracker.

In an opinion filed with the Clerk today, we reverse the judgment of the Court of Appeals.

Under our Indian tax-immunity cases, the who and the where of the challenged tax have significant consequences.

We have determined that the states are categorically banned, barred, from placing the legal incidence of an excise tax on a tribe or on the tribal members for sale made on reservation.

We have further determined that even when a state imposes the legal incidence of its tax on a non-Indian seller, the tax is subject to an interest-balancing test if the transaction giving rise to tax liability occurs on reservation.

But this case presents neither scenario.

Here, Kansas places a legal incidence of its motor-fuel tax on the distributor who first receives motor fuel.

As such, the tax is imposed on a non-Indian, and it arises as a result of an off-reservation transaction.

We have never suggested that such a tax is subject to interest balancing, and we decline to do so today.

Consistent with our cases holding that Indians venturing off the reservation are subject to nondiscriminatory state taxes, we hold that a state excise tax imposed on a non-Indian that arises as a result of an off-reservation transaction is not subject to interest balancing and that the Kansas motor-fuel tax is valid.

Justice Ginsburg has filed a dissenting opinion, in which Justice Kennedy joins.