658 F.3d 1078
9th Cir.2011Background
- Washington levies a statewide cigarette excise tax; tribal retailers may be shielded from tax incidence by Indian tax immunity.
- Colville decisions (Colville v. Washington) upheld that the tax’s legal incidence fell on non-Indian purchasers and allowed state collection via tribal retailers.
- Yakama Nation operates nine member-owned tobacco retailers on Yakama Reservation; Yakama imposes its own tribal tax via Yakama Nation stamps.
- In 2004 the Yakama entered a cigarette tax compact with Washington; the compact was terminated in 2008 and Washington reinstated the cigarette tax on nonmembers.
- Yakama filed suit seeking declarations that state tax on Indian-to-Indian sales is unlawful, that RCW 82.24 et seq. is unenforceable against Yakama, and other related challenges; district court granted summary judgment for Washington.
- This Ninth Circuit case affirms the district court, holding no material change from Colville and upholding Indian tax immunity principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legal incidence of tax on Yakama retailers? | Yakama | Washington | No; incidence remains on consumers, not Yakama retailers. |
| Did amendments shift incidence or pass-through? | Amendments shift burden to retailers | No dispositive pass-through; pre-collection is minimal burden | No material change; incidence remains acceptable. |
| Is there an explicit pass-through requirement? | Absence of pass-through shifts burden | Pre-collection obligation functions similarly | Not dispositive; absence of explicit pass-through is not fatal. |
| Do exemptions/compacts exempt Yakama retailers from RCW 82.24? | Exemptions weaken tribal tax burden | Exemptions do not alter legal incidence | Not material to incidence; law aligns with Colville. |
Key Cases Cited
- Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134 (1980) (upheld tax collection burden on non-Indians; validity of tax in Colville)
- Colville Tribe v. Washington, 446 F. Supp. 1339 (E.D. Wash. 1978) (district court holding on tax incidence)
- Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463 (1976) (incidence on non-Indian purchaser; limits on retailer as collection agent)
- Oklahoma Tax Comm’n v. Chickasaw Nation, 515 U.S. 450 (1995) (legal-incidence framework; pass-through considerations)
- Wagnon v. Prairie Band Potawatomi Nation, 546 U.S. 95 (2005) (dispositive language and pass-through factors in incidence)
- United States v. Mississippi Tax Comm’n, 421 U.S. 599 (1975) (recognizes pass-through concept in tax incidence)