Washington v. Confederated Tribes of the Colville Indian Reservation

1980-08-11

Headline: Ruling allows Washington to tax cigarette and sales purchases by non-Indian buyers on reservations, upholds state collection, recordkeeping, and seizure powers, but rejects vehicle excise taxes in certain on-reservation uses.

Holding: The Court held that Washington may impose its cigarette and sales taxes on non-Indian buyers at reservation tobacco shops, require collection and records and seize unstamped shipments, but may not impose its vehicle excise tax as applied to on-reservation use.

Real World Impact:

Makes non‑Indian buyers pay state cigarette and sales taxes on reservation purchases.
Gives Washington authority to require stamps, records, and seize unstamped shipments off reservations.
Limits tribal reliance on cigarette sales as a steady revenue source.

Topics: tribal taxation, cigarette taxes, reservation enforcement, vehicle taxes, tribal sovereignty

Summary

Background

A group of federally recognized tribes (Colville, Lummi, Makah, Yakima) and the United States challenged Washington's cigarette, sales, and vehicle excise taxes and seizure practices. The tribes run reservation tobacco outlets and impose their own small cigarette taxes, and most customers are non‑Indian visitors attracted by lower prices. Washington sought to collect its cigarette excise and sales taxes from non‑Indian buyers, required stamp collection and detailed recordkeeping, seized unstamped shipments, and applied vehicle excise taxes to vehicles used on and off reservations.

Reasoning

The central question was whether the State can tax non‑Indian buyers at reservation shops when tribes also tax those sales. The Court relied on prior decisions and held that federal law does not clearly preempt Washington's power to tax non‑Indian purchases. The Court upheld the State's ability to require stamps and records and to seize unstamped shipments outside reservations to prevent fraud. It also held the State may tax Indians who live on a reservation but are not members of the governing tribe. Following Moe, the Court rejected the State's vehicle excise tax as applied where it effectively taxed ownership or on‑reservation use.

Real world impact

Reservation tobacco businesses that rely on tax exemptions risk losing most non‑Indian customers. Non‑Indian buyers will face state taxes when purchasing on reservations, removing price incentives to travel for bargains. Tribes will lose some revenue and may need to change tribal business plans. Some enforcement powers, like seizing unstamped shipments off‑reservation, are allowed; entry onto reservations for seizures was not decided.

Dissents or concurrances

Several Justices disagreed. Two concurring opinions argued the State should credit tribal taxes to avoid placing tribes at a competitive disadvantage; one Justice would have invalidated the state taxes to protect tribal self‑government.