Supreme Court says Kansas can tax fuel on Indian reservations

The U.S. Supreme Court ruled Tuesday that Kansas can tax the fuel sold on American Indian reservations without violating tribal sovereignty, reversing a lower court.

In a 7-2 vote, the high court said Kansas can tax distributors who sell fuel at an Indian-owned and operated gas station near the Prairie Band Potawatomi tribe's casino. Most customers of the Nation Station are off-reservation patrons of the casino, which is 15 miles north of Topeka, Kan.

Writing for the majority, Justice Clarence Thomas said the Denver-based 10th U.S. Circuit Court of Appeals was wrong in ruling that the tax was an affront to tribal sovereignty.

Thomas said Kansas is not trying to regulate tribal activity but is simply taxing non-Indian companies based outside the reservation that distribute fuel to tribal operators.

"Kansas law makes clear that it is the distributor, rather than the retailer, that is liable to pay the motor fuel tax," Thomas wrote. "While the distributors are 'entitled' to pass along the cost of the tax to downstream purchasers ... they are not required to do so."


http://www.kansascity.com/mld/kansascity/news/breaking_news/13341295.htm

Especially those without casinos.

Highest. Deficit. Ever. No end in sight. 7 billion a week in Iraq alone. Which is the "spending" party?

Anyone know?

SO I am confused. Generally state gas tax is a point of sale issue. On the reservation wouldn't be Kansas, it would be part of an Indian nation (however you define that).

I still be confused. Could the UN could actually get involved as indigenous peoples have internationally recognized rights?

"Kansas law makes clear that it is the distributor, rather than the retailer, that is liable to pay the motor fuel tax," Thomas wrote. "While the distributors are 'entitled' to pass along the cost of the tax to downstream purchasers ... they are not required to do so."

So, in Kansas the distributors are responsible for the tax, but can pass on the cost of it to the retailers.

It is the distrubutors problem.

But the company that distributes it is a non-Indian company based outside of the reservations.

with the ruling. If Kansas wants to tax distributor's then they can. It would be no different than taxing the sale of any commodity to Canada for example.

One can argue that you SHOULDNT tax because of the impact on some poorer Indian Nation's, but it seems fairly straightforward to me that taxing the American distributors is not a violation of Indian sovereignty.

I almost always agree with ginsburg and breyer, but here they seem to be making the argument that because the tax raises the price to the point that Indian's can't tax it themselves (because the gas would be too expensive to be bought) then its an infringement on Indian Sovereignty, but then what if Kansas decided to charge a say environmental tax on all fuel to fund new alternative fuels, wouldnt that also raise the cost of fuel and wouldnt that also be an infringement on Indian Sovereignty?

Thus, wouldnt you would be forced to sell fuel tax-free to Indian Nations? Everyone else would pay tax, and I'm not sure that makes any sense because I am fairly certain you can tax other exports.

I think its a pretty correct ruling although yes if Kansas is only getting 300K from the tax one does wonder why they would have such a tax if the negative impact exceeds the small benefit gained.

Narragansett Indians selling tax free cigarettes on their reservation. The governor wanted the store shut down and he won. Is this similar?

smoke shop and were caught on camera?

It was bad.

:shrug: So retail pumps should not charge tax since it has already been assessed. It sounds like there is a lot of double dipping going on...

My boss went into a long discussion on how sales tax works here.

So well say I'm the owner of a hardware store. If I sell screws to Joe Smith, then sales tax must be charged. If I sell the same screws to another hardware store, where they're going to sell them to Joe Smith, then I don't charge sales tax. (BTW this is in Texas.)

So I already know Kansas is different, because the distributors are responsible for the tax, as opposed to the actual person that would need to use it (Joe Smith). But Joe Smith is being charged more, because while the distributor is responsible, he passes on the extra cost when he sales the fuel to the retailer, who then passes it on to Joe.

It doesn't sound like double dipping to me. The distributor is paying the tax, and the retailer/consumer pay a slightly higher cost because the distributor is making up the cost of the tax that they paid.

Does this make sense?

Most sales tax is paid by the ultimate buyer of the item ONLY. When things are sold through the distribution system, the tax is NOT accessed (In Europe where you have Added Value Taxes, the VAT IS charged on every-time there is an increase in value as the item goes through the distribution system, this is the difference between a VAT and a Sales Tax, but that is NOT the problem in front of the Court through the Kansas tax has some of the earmarks of a VAT in that it taxes oil in the distribution system NOT as the item exits that system i.e. purchased by the ultimate user).

In this case, Kansas charges a Distributor of Gasoline a Distribution tax every-time the Distributor BUYS GASOLINE. Thus the sale that generates the tax is NOT the sale to the ultimate user, but when the distributor buys the gasoline from a refinery. The tribe was saying such a tax is illegal on the grounds the state can NOT assess a sales tax on the Reservation (Which the Court has previously ruled to be the law). Kansas said the tax was on the distributor OUTSIDE OF THE RESERVATION and NOT on the ultimate user, whether that ultimate use was on or off the reservation. As a tax assessed OFF the reservation Kansas said it could charge such a tax on a Distributor even if the ultimate use of the fuel was on the Reservation. Thomas and the Supreme Court accepted that position, rejecting the tribe's position, saying that when the tax is accessed outside the reservation, it is legal provided it is a general tax that just happens to fall on people living on the reservation NOT an attempt to tax the people on the Reservation.

that aren't on reservations charge tax. so if the gas stations charge tax and the distributor charges tax it would appear to be double taxation. I don't know that other stations do this though but if they didn't why the big deal.

http://a257.g.akamaitech.net/7/257/2422/06dec20051100/www.supremecourtus.gov/opinions/05pdf/04-631.pdf

Ginsburg and Kennedy Dissented.

I'm serious...every treaty that was broken should be recognized as their sovereign right as a Nation.

Yes, we broke most of the treaties, but the Indians broke a few themselves (This was especially true in the period of 1692 till 1815, when Britain, France, Spain and what is now the US were fighting among themselves for control of what is now the US).

(while we're still breaking treaties now, and have been since forever)

framing, anyone?

Exactly what treaties did the Indians break and how did they do so? Also you do know that even if the other breaks a treaty it does not mean the USA can do the same thing. A Treaty is the "Supreme Law of the Land" according to US Constitution but I have not seen a copy of the Indian's Constitution.

so much for sovereignty. Not that there really was to begin with.