White Eagle v. Dorgan

• Decision Date: 12 July 1973
• Docket Number: Nos. 8855--8858,s. 8855--8858
• Citation: 209 N.W.2d 621
• Parties: Melvin WHITE EAGLE, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota, Defendant andAppellant, and R. B. Luger, doing business as the Diamond Z Food Center; and Dean Barker,doing business as Barker's Indian Trading Post, Defendants. Joseph F. CONDON, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota, Defendant andAppellant. Henry BAILEY, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota, Defendant andAppellant. Harry FAST HORSE, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota, Defendant andAppellant, and Lloyd L. Martinson, doing business as the Martinson Store, Defendant. Civil
• Court: North Dakota Supreme Court

Page 621

209 N.W.2d 621

Melvin WHITE EAGLE, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota,

Defendant andAppellant,

and

R. B. Luger, doing business as the Diamond Z Food Center;

and Dean Barker,doing business as Barker's Indian

Trading Post, Defendants.

Joseph F. CONDON, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota,

Defendant andAppellant.

Henry BAILEY, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota,

Defendant andAppellant.

Harry FAST HORSE, Plaintiff and Respondent, v. Byron L. DORGAN, Tax Commissioner, State of North Dakota,

Defendant andAppellant,

and

Lloyd L. Martinson, doing business as the Martinson Store,

Defendant.

Civil Nos. 8855--8858.

Supreme Court of North Dakota.

July 12, 1973.

Syllabus by the Court

1. In the absense of an express enactment by the Congress providing that State law shall apply, the State of North Dakota may not assume jurisdiction to impose state income tax on individual Indians residing on the Standing Rock Sioux Indian Reservation, on income earned on the reservation, without specific agreement of the tribal members residing on the reservation conferring jurisdiction on the State.

2. Business done on the reservation with reservation Indians is immune from state tax not only because such business takes place on the reservation but also because the Congress, in the exercise of the power granted in the United States Constitution, has undertaken to regulate business on the reservation so completely that there is no room for the States to legislate on the subject.

3. For reasons stated in the opinion, all attempts by the State to tax the plaintiffs in these actions are invalid, and the judgment of the district court in each of these cases is affirmed.

Albert A. Wolf, Bismarck, and Marvin J. Sonosky, Washington, D.C., for plaintiffs and respondents.

Paul M. Sand, First Asst. Atty. Gen., and Kenneth M. Jackes, Albert R. Hausauer, and Robert W. Wirtz, Special Asst. Attys. Gen., Bismarck, for defendant and appellant Tax Commissioner.

STRUTZ, Chief Justice.

Each of the plaintiffs in the above four actions is an Indian residing on the Standing Rock Indian Reservation in North Dakota. Three are members of the Standing Rock Sioux Tribe, and the fourth is a member of the Sheyenne River Sioux tribe. All of them earn their livelihood on the reservation, the plaintiff White Eagle as an employee of the Standing Rock Sioux tribal office in Fort Yates; the plaintiff Condon as an employee of the United States Bureau of Indian Affairs; the plaintiff Bailey as the owner and operator of a service station on the reservation; and the plaintiff Fast Horse, who has lived on the reservation for many years, has purchased food and other items from retail outlets on the reservation and has been compelled to pay sales tax on the purchases so made.

Three non-Indian owners of retail stores located on the reservation were joined as defendants in the actions in the district court. At the time the actions were commenced, one of such owners was licensed as an Indian trader under the provisions of Title 25, U.S.C.A. Section 261. The other two stores were licensed as Indian traders after the commencement of suit and before the trial of these actions.

The plaintiffs White Eagle and Fast Horse were required to pay North Dakota sales tax on purchases of food and other items from such retailers. White Eagle, in addition, was required to pay income tax on his income as an employee of the tribe, which income was earned exclusively on the reservation. The appellant Dorgan, as State Tax Commissioner, demanded that the plaintiff Condon pay state income tax on his income as employee of the United States Bureau of Indian Affairs, which income was earned exclusively on the reservation. The Tax Commissioner asserts that the plaintiff Bailey, who owns and operates a service station on the reservation, must pay state income tax on his income and sales tax on the gross receipts of his business, and that he must pay a business-privilege tax for doing business in the State of North Dakota, although such business is conducted exclusively on the reservation.

These four actions were commenced to test the power of the State of North Dakota to impose taxes on and collect taxes from Indians on the reservation. The facts, as briefly outlined above, were stipulated by the parties. The trial court, after hearing, held for the plaintiff in each of the actions, and appeal by the State Tax Commissioner to this court followed.

The sole issue for this court to determine on these appeals is whether the State has the power to collect taxes from an Indian residing on an Indian reservation, where the income is earned and the business is conducted entirely on the reservation.

The problems presented by the appeals in these four cases are problems which have plagued the courts for many years. Indians born in the United States and subject to its jurisdiction are citizens of the United States and of the State in which they reside. As such citizens, they have constitutional rights, privileges, and immunities, but they also have corresponding legal duties and obligations. However, the many and varied treaties which have been entered into with different Indian tribes by the Federal Government, the many laws enacted by the Congress on the subject of Indian rights and obligations, and the many Federal court decisions interpreting such treaties and laws make it very difficult to define an Indian's...