RESPONDENT: Confederated Tribes of the Colville Indian Reservation
DOCKET NO.: 78-630
DECIDED BY: Burger Court (1975-1981)
CITATION: 447 US 134 (1980)
ARGUED: Oct 09, 1979
DECIDED: Jun 10, 1980
James B. Hovis - on behalf of the Appellees
James B. Hoves - for appellees
Louis F. Claiborne - on behalf of the Appellees
Steven S. Anderson - on behalf of the Appellees
Slade Gorton - on behalf of the Appellants
Facts of the case
Media for Washington v. Confederated Tribes of the Colville Indian Reservation
Audio Transcription for Oral Argument - October 09, 1979 in Washington v. Confederated Tribes of the Colville Indian Reservation
Warren E. Burger:
We will hear arguments first this morning in No. 78-630, State of Washington v. Confederated Tribes of the Colville Indian Reservation.
Mr. Attorney General, you may proceed whenever you are ready.
Mr. Chief Justice, and may it please the Court.
The State of Washington has for a number of years imposed a tax of 16 cents per pack on the sale or possession of cigarettes.
Income from that tax supports a broad range of state programs, services and institutions.
The state's general sales tax of 5 percent is also levied against cigarettes.
Neither tax is applied to sales by Indians to other Indians on the reservation to which both belong.
The respondent tribes recently have gone into the cigarette business.
In connection with that business, the tribes levy what they call a tax or an administrative fee on cigarette sales on their reservations.
That fee is far smaller than the state's tax.
Their claim in this litigation is that their entry into the cigarette business together with their tax or fee exempts Washington citizens from the state's cigarette and general sales taxes for on-reservation purchases.
A divided District Court found that the state's pre-existing tax was preempted by the tribal taxes and fees and alternatively that the state tax interfered with tribal self-government.
The scheme adopted by the tribes as upheld by the District Court has several interrelated consequences.
The tribes emphasize only one of these consequences.
Because their taxes or fees are 13 to 16 cents per pack lower than the state taxes, the tribes sell large quantities of cigarettes to non-Indians who are willing to drive considerable distances to save that differential.
As a result, the tribes' revenues are substantial.
Not mentioned by the tribes, however, is the fact that the state loses about $4 from its tax revenues for every $1 which is secured by the tribes.
Incidentally, the total loss in state revenues as a result of all Indian smoke shops now is about $13 million per year.
Inevitably, that consequence adversely affects the ability of the state to supply governmental and social services to its citizens, Indian and non-Indian alike.
The fact that the bulk of that $3 difference between state losses and tribal receipts remains in the pockets of non-Indian purchasers cannot be overemphasized.
It illustrates the fact that this case concerns the asserted right of an Indian tribe to market their major tax exemption to non-Indians.
Those non-Indians avoid taxes which their fellow citizens, who are either more principled or live farther from reservation smoke shops, must pay.
The state tax is thus rendered inequitable and view it as a revenue sharing method.
The entire method is absurd.
In this presentation, I propose first to deal with the preemption issue.
I will show that no valid source may be identified to support the claim that the tribes can preempt or that the United States has preempted these state taxes, then I will demonstrate that the concept of tribal self-government does not and cannot by the imposition of these same taxes.
As an introduction to our argument against preemption, it may help to point out that the word "preemption" is used in your decisions as well as in this argument to describe two closely related but distinct concepts.
First, the United States may preempt the state tax by adopting its own comprehensive taxing or regulatory statutes, thus occupying the field as it did in the situation in Warren Trading Post.
Second, it may also preempt the state without occupying the field simply by prohibiting the state's entry, as you found it did in the McClanahan situation.