Oklahoma Tax Commission v. Sac and Fox Nation, No. 92-259

CourtUnited States Supreme Court
Writing for the CourtO'CONNOR
Citation508 U.S. 114,124 L.Ed.2d 30,113 S.Ct. 1985
Docket NumberNo. 92-259
Decision Date17 May 1993

508 U.S. 114
113 S.Ct. 1985
124 L.Ed.2d 30



No. 92-259.
Argued March 23, 1993.
Decided May 17, 1993.
Rehearing Denied June 28, 1993.
See U.S. , 113 S.Ct. 3066.
Syllabus *

Respondent Sac and Fox Nation (Tribe) is a federally recognized Indian tribe located in Oklahoma. It brought this action seeking a permanent injunction barring petitioner Oklahoma Tax Commission (Commission) from, among other things, taxing the income of tribal members who work or reside within tribal jurisdiction, and imposing the State's motor vehicle excise tax and registration fees on tribal members who live and garage their cars principally on tribal land and register those cars with the Tribe. In large part, the Tribe based its claims of immunity from those state taxes on McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129, in which the Court held that a State could not subject a tribal member living on the reservation, and whose income derived from reservation sources, to a state income tax absent an express authorization from Congress. The Commission responded that the State had complete taxing jurisdiction over the Tribe because McClanahan and the Court's other immunity cases applied only to tribes on established reservations, whereas the Tribe's 1891 Treaty with the Government disestablished the Sac and Fox Reservation in favor of allotments of trust land for individual tribal members. In affirming the District Court's rulings on cross-motions for summary judgment, the Court of Appeals held, among other things, that the income of tribal members who work for the Tribe was immune from state taxation under McClanahan and Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505, 111 S.Ct. 905, 112 L.Ed.2d 1112. In so ruling, the court rejected the Commission's contention that the tribal member's residence was relevant in addition to the status of the land on which the income was earned. The court also concluded that the State's vehicle taxes were flatly prohibited under Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96, and Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10.

Held: Absent explicit congressional direction to the contrary, it must be presumed that a State does not have jurisdiction to tax tribal members who live and work in Indian country, whether the particular territory consists of a formal or informal reservation, allotted lands, or dependent Indian communities. Pp. ________.

(a) The Court of Appeals erred to the extent that it did not determine the residence of the tribal members working for the Tribe. The residence of a tribal member is a significant component of the McClanahan presumption against state taxing authority. Contrary to the Commission's contention, that presumption applies not only to formal reservations, but also to all "Indian country." Citizen Band Potawatomi Indian Tribe of Okla., supra, 498 U.S. at 511, 111 S.Ct., at 910. Title 18 U.S.C. § 1151 broadly defines the quoted phrase to include formal and informal reservations, dependent Indian communities, and Indian allotments, whether restricted or held in trust by the United States. If it is determined on remand that the relevant tribal members do live in Indian country, the Court of Appeals must analyze the relevant treaties and federal statutes against the backdrop of Indian sovereignty. Unless Congress expressly authorized state tax jurisdiction in Indian country, the McClanahan presumption counsels against finding such jurisdiction. Because all of the tribal members earning income from the Tribe may live within Indian country, this Court need not determine whether the Tribe's right to self-governance could operate independently of its territorial jurisdiction to pre-empt the State's ability to tax income earned from work performed for the Tribe itself when the employee does not reside in Indian country. See, e.g., White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 142, 100 S.Ct. 2578, 2583, 65 L.Ed.2d 665. Pp. ____.

(b) Oklahoma's vehicle excise tax and registration fees are no different than the state taxes the Court held pre-empted in Colville and Moe. The Commission's argument that neither of those cases applies because the Sac and Fox live on scattered allotments, rather than a reservation, fails for the same reasons it fails with regard to income taxes. Pp. ____.

(c) Because the Court of Appeals did not determine whether the tribal members on whom Oklahoma attempts to impose its income and motor vehicle taxes live in Indian country, its judgment must be vacated. P. ____.

967 F.2d 1425 (CA10 1992), vacated and remanded.

O'CONNOR, J., delivered the opinion for a unanimous Court.

David Allen Miley, Oklahoma City, OK, for petitioner.

Edwin S. Kneedler, Washington, DC, for the U.S. as amicus curiae by special leave of the Court.

G. William Rice, Cushing, OK, for respondent.

Justice O'CONNOR delivered the opinion of the Court.

In this case, we consider whether the State of Oklahoma may impose income taxes or motor vehicle taxes on the members of the Sac and Fox Nation.


The Sac and Fox Nation (Tribe) is a federally recognized Indian tribe located in the State of Oklahoma. Until the mid-eighteenth century, the Tribe lived in the Great Lakes region of the United States. M. Wright, A Guide to the Indian Tribes of Oklahoma 225 (1951). In 1789, it entered into its first treaty with the United States and ceded much of its land. See Treaty at Fort Harmar, 7 Stat. 28. That was only the first of many agreements between the Government and the Tribe in which the Tribe surrendered its land and moved elsewhere. As part of its gradual, treaty-imposed migration, the Tribe stopped briefly along the Mississippi and Missouri Rivers in what are now the States of Illinois, Missouri, Iowa, and Nebraska. Wright, supra, at 225-226. In the mid-nineteenth century, the Sac and Fox Nation ceded land in several States for two reservations in Kansas, but the Government eventually asked it to cede these as well. Id., at 226. In 1867, the Sac and Fox Nation moved for the final time to the Sac and Fox Reservation in Indian Territory. Ibid.

By the 1880's, however, white settlers increasingly clamored for the land the Sac and Fox and other tribes held in Indian Territory. In response, Congress passed two statutes that greatly affected the Tribe: the General Allotment Act (Dawes Act), 24 Stat. 388, which provided for allotting reservation land to individual tribal members and purchasing the surplus land for the use of white settlers; and the Oklahoma Territory Organic Act, 26 Stat. 81, which established the Oklahoma Territory in what is now the western half of the State of Oklahoma. This new Oklahoma Territory included the Sac and Fox Nation's Reservation. In June 1890, the Government and the Tribe concluded their final treaty—a treaty designed to effectuate the provisions of the Dawes Act. Congress ratified the treaty in 1891 (hereinafter 1891 Treaty). Concerning the Tribe's cession of land, the 1891 Treaty states:

"Article I. The said the Sac and Fox Nation hereby cedes, conveys, transfers, surrenders and forever relinquishes to the United States of America, all their title, claim or interest, of every kind or character, in and to the following described tract of land or country, in the Indian Territory, to-wit: [the Reservation land granted the Tribe in the Treaty of 1867].

. . . . .

"Provided however the quarter section of land on which is now located the Sac and Fox Agency shall not pass to the United States by this cession, conveyance, transfer, surrender and relinquishment, but shall remain the property of said Sac and Fox Nation, to the full extent that it is now the property of said Nation—subject only to the rights of the United States therein, by reason of said Agency being located thereon, and subject to the rights, legal and equitable, of those persons that are now legally located thereon. . . . And the section of land now designated and set apart near the Sac and Fox Agency, for a school and farm, shall not be subject either to allotment to an Indian or to homestead entry under the laws of the United States—but shall remain as it now is and kept for school and farming purposes, so long as said Sac and Fox Nation shall so use the same. . . ." 26 Stat. 748, 750-751.

Under the 1891 Treaty, the Tribe retained the 800 acres discussed in the proviso. Each of the Tribe's members, adults and minors, had the right to choose an allotment of one quarter section (160 acres) within the boundaries of the ceded land.

Today, the Sac and Fox Nation has approximately 2,500 members. Tr. of Oral Arg. 49. It has a fully functioning tribal government with its headquarters on the 800 acres reserved to it under the 1891 Treaty. The United States recognizes and encourages the Tribe's sovereign right to self-governance within "the family of governments in the federal constitutional system." Compact of Self-Governance Between the Sac and Fox Nation and the United States of America 2 (June 26, 1991), see 25 U.S.C. § 45 of note. To this end, the Tribe has a Constitution and a Code of Laws, as well as a court system in which to enforce them. It employs approximately 140 to 150 people, most of whom are tribal members. See Tr. of Oral Arg. 50.

Among the Tribe's employees are the members of the Sac and Fox Tax Commission, which administers the Sac & Fox tax code. The Tribe imposes a tribal earnings tax, see Sac & Fox Tribe of Indians of Okla.Code of Laws, Tit. 14, ch. 4, and a motor vehicle tax, see ch. 8. The earnings of any employee employed within tribal jurisdiction, whether or not that employee is a member of the Tribe, are subject to the earnings tax. Ch. 4, § 402. The motor vehicle tax and registration provisions apply...

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