Wagnon v. Prairie Band Potawatomi Nation: State Tax on Motor Fuels Distributed to Indian Tribal Retailers Page: 3 of 6
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importer in this state ...."" It specifies that the legal incidence of the tax, which generally
means the duty of paying the tax, falls on the distributor2 and that receipts are to be used
to maintain the state's highway system.13 The distributor is permitted to pass the tax
along to the retailer, who, in turn, may include it in the price at the pump. Tribal members
may seek a refund of state taxes included in the gasoline that they buy on the reservation.14
The Tribe, claiming that the Kansas tax is preempted, sought a federal court injunction
against the enforcement of the tax with respect to fuels distributed to its tribal retailer.
The district court ruled in favor of Kansas,15 and the court of appeals reversed.16
Preemption Analysis. Preemption analysis begins with the Supremacy Clause
of the U.S. Constitution," under which Congress may override state laws in conflict with
its exercise of delegated powers. If Congress enacts legislation under one of its delegated
powers that includes an explicit statement that state law is preempted, the Supreme Court
generally will give effect to that legislative intent.18 Where there is no language of
preemption, the Court is likely to find preemption when it identifies a direct conflict
between the federal law and the state law or when it concludes that the federal
government has so occupied the field as to preclude enforcement of state law with respect
to the subject at hand.19 In cases involving assertion of state authority over activities on
Indian lands, in the absence of a federal statute specifically addressing the issue or a
federal regulatory regime occupying the field, the Court is likely to examine the state
interest in relation to the federal interest in tribal self-government.
Tribes have authority to tax tribal members and their property on reservations20 and
to tax nonmembers under certain circumstances.21 On-reservation activities of Indian
" Kan. Stat. Ann. 79-3408(c).
12 Kan. Stat. Ann. 79-3408(c) (Supp. 1003).
13 Kan. Stat. Ann. 79-3402 (1997).
14 See Kaul v. Kansas Department of Revenue, 266 Kan. 464,466; 970 P. 2d 60, 62-63 (Kan.
1998), cert. denied, 528 U.S. 812 (1999).
15 Prairie Band Potawatomi Nation v. Richards, 242 F. Supp. 2d 1295 (D. Kan. 2003).
16 Prairie Band Potawatomi Nation v. Richards, 379 F. 3d 979, 982 (10h Cir. 2004).
1" U.S. Const., Art. VI, cl. 2, declares that the Constitution and "the Laws of the United States
which shall be made in Pursuance thereof ... shall be the supreme Law of the Land ... any Thing
in the Constitution or Laws of any State to the Contrary notwithstanding."
18 Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947); Wisconsin Public Intervenor v.
Mortier, 501 U.S. 597, 605 (1991).
19 CRS Report 97-589, Statutory Interpretation: General Principles and Recent Trends, by
20 Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 152(1980)
(tribal retail sales tax on cigarettes sold on-reservation to nonmembers); Merrion v. Jicarilla
Apache Tribe, 455 U.S. 130 (1982) (mineral severance tax on minerals extracted from tribal
reservation under a leasing agreement with the tribe).
21 The Supreme Court, in Washington v. Confederated Tribes of Colville Indian Reservation, 447
U.S. 134, 152, (1980), upheld the authority of a tribe to tax on-reservation cigarette sales to
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Murphy, M. Maureen. Wagnon v. Prairie Band Potawatomi Nation: State Tax on Motor Fuels Distributed to Indian Tribal Retailers, report, December 9, 2005; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc822415/m1/3/: accessed January 16, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.