delivered the opinion of the Court.
The principal question is whether a lessee of mineral rights in allotted and restricted Indian lands is immunized by the Constitution against payment of nondiscriminatory state gross production taxes and state excise taxes on petroleum produced from such lands. In effect the issue is whether this Court’s previous decisions in
Howard
v.
Gipsy Oil Co.,
With certain exceptions, 1 the lands from which was extracted the petroleum sought to be taxed are held in *344 trust by the United States, pursuant to allotments made under the General Allotment Act, 2 for various members of the Pottawatomie, Apache, Comanche, and Otoe and Missouria Tribes. 3 All the lands are located within the State of Oklahoma and at all material times they were restricted 4 against alienation by the Indian cestui owners without the consent of the Secretary of the Interior. 5 He *345 approved each of the leases now in question. The respondents Texas Company (No. 40) and Magnolia Petroleum Company (No. 41) acquired their leases before Oklahoma levied the assessments now in issue, either as original lessees or by assignment from non-Indians who were such lessees. The companies thus became owners of all right, title and interest in their respective leases, subject only to the one-eighth royalty interest reserved to the Indian lessors, and were such owners at the times of the respective assessments. It may be taken that they have operated the leases in conformity with the applicable regulations of the Department of the Interior 6 and of the State of Oklahoma, 7 except for the payment of the state taxes in question. 8
The Oklahoma gross production tax requires payment of five per cent of the gross value of production, including royalty interests. It is imposed on every person engaged in the production in Oklahoma of petroleum, crude oil or other mineral oil, and natural gas and casinghead gas. The tax is exacted in lieu of all taxes by the state *346 and its political subdivisions on property rights in minerals and mineral rights, producing leases, machinery used in connection with any oil or gas well, the oil and gas during the tax year in which it is produced, and any investment in any leases, minerals, or other property. The statute authorizes the state board of equalization to raise or lower the rate of tax to equate the amount payable with the amount which would be payable if the general ad valorem property tax were assessed against the property of the producers subject to taxation. The board’s rate changes are subject to review by the state supreme court. 9 In consequence of these provisions, the tax has been construed consistently by the state courts to be a tax on the lessee’s property, not an occupation or excise tax. 10
*347
The petroleum excise tax requires payment of one mill, formerly one-eighth of one cent,
11
per barrel on every barrel of petroleum produced in Oklahoma. The statute was enacted first in 1933 to defray the expenses of administering the state’s newly adopted proration law
12
and has been reenacted at each subsequent session of the legislature.
13
The tax, unlike the gross production tax, is construed by the Oklahoma Supreme Court as an excise tax on the production of oil.
Barnsdall Refineries
v.
Oklahoma Tax Commission,
In No. 40 the Oklahoma Tax Commission, petitioner here, assessed both gross production and petroleum excise taxes against the Texas Company for production, less royalties to the Indian lessors, 14 during September, Oc *348 tober and November, 1942. In No. 41 the commission likewise assessed both taxes, less royalties, on the Magnolia Company’s production for various periods between June 1, 1942, and March 1, 1946. The orders were entered after the cases were consolidated for hearing before the commission and were thus heard by it.
In No. 40 the Texas Company paid the taxes under protest and brought suit to recover them in an Oklahoma trial court. After hearing, that court sustained the commission’s demurrer to the company’s amended petition and ordered it dismissed. Appeal was duly taken to the state supreme court. In No. 41, following a different statutory procedure, the Magnolia Company appealed from the assessments against it directly to that court.
In both cases the Supreme Court of Oklahoma, with one judge dissenting, held the assessments invalid. The decisions rested flatly on the ground that the lessee was an instrumentality of the Federal Government and as such, under prior and controlling decisions of this Court, particularly in the Large Oil, Gipsy Oil, and Barnsdall Refineries cases, supra, not subject to the taxes in question. 15 In the Texas Company case the court expressly distinguished Helvering v. Mountain Producers Corp., supra, on the ground that the decision in that case related *349 to income taxes assessed against the lessee there situated as were the lessees here. The opinion, indicating the writer’s personal view that reconsideration of the earlier decisions well might be sought, nevertheless stated:
“But it is thought beyond the power of this court to now engage in such reconsideration, in view of the cited decisions of the higher authority which thus far wholly sustain the claim of [the Texas Company] to immunity from the tax here involved.
“Upon questions of federal law, citizens and their attorneys have the right to rely upon decisions of the Supreme Court of the United States, and upon such questions it is our fixed duty to follow such decisions, leaving to the United States Congress or Supreme Court the making of the necessary changes in such legal rules.”
From the state supreme court’s decisions
16
the Oklahoma Tax Commission filed appeals in this Court. We dismissed the appeals for want of jurisdiction. But treating them as applications for certiorari,
17
we granted the writs and consolidated the cases for argument.
I.
But for the course of decision here from
Choctaw, O. & G. R. Co.
v.
Harrison,
It has long been established that property owned by a private person and used by him in performing services for the Federal Government is subject to state and local
ad valorem
taxes.
18
And the oil and gas produced is, of course, subject to such taxation.
Indian Territory Illuminating Oil Co.
v.
Board of Equalization,
Unembarrassed by some of this Court’s prior decisions, therefore, Oklahoma’s so-called gross production tax *351 would seem to be sustained by the well-established line of decisions cited above. 20
Moreover, even if the status of respondents as federal instrumentalities, in the sense in which they use the term, were fully conceded, it seems difficult to imagine how any substantial interference with performing their functions as such in developing the leaseholds could be thought to flow from requiring them to pay the small tax Oklahoma exacts to satisfy their shares of the state’s expense in maintaining and administering its proration program. That system works for respondents’ benefit in performing their producing function, as it does for the benefit of all other producers, by stabilizing, production, eliminating waste, and preventing runaway competition in an industry notorious for those evils in the absence of some such control. Cf.
Railroad Commission
v.
Rowan & Nichols Oil Co.,
II.
But neither issue is fresh. Each is complicated by this Court’s prior decisions squarely ruling that the taxes are invalid as unconstitutional intrusions by the state upon the performance of federal functions. Those decisions have not been explicitly overruled. But it is strongly urged that our later decisions, especially in Helvering v. Mountain Producers Corp., supra, have stricken the foundation from beneath the Gipsy Oil, Large Oil and Barnsdall Refineries decisions, supra, so that the latter no longer can stand in reason and consistency with the former.
It is true that this Court’s more recent pronouncements have beaten a fairly large retreat from its formerly prevailing ideas concerning the breadth of so-called intergovernmental immunities from taxation, a retreat which has run in both directions — to restrict the scope of immunity of private persons seeking to clothe themselves with governmental character from both federal and state taxation. The history of the immunity, by and large in both aspects, represents a rising or expanding curve, tapering off into a falling or contracting one.
Our present problem lies on the constitutional level. It requires reconsideration of former decisions specifically in point, together with later ones deviating in rationale. It is of substantial importance both for the states’ powers of taxation and for the subjects on which they may impinge. Moreover, even though the immediate questions are closely related to federal policies concerning Indian lands, they are equally tangent to considerations affecting other types of situation raising questions of immunity. For these reasons it will not *353 be amiss to consider the questions in the context of two conflicting courses of decision.
Before we turn to the survey, however, two delimitations of the specific issues should be made.
These cases present no question concerning the immunity of the Indian lands themselves from state taxation. There is no possibility that ultimate liability for the taxes may fall upon the owner of the land. Cf.
Wilson
v.
Cook,
III.
Despite the possibility that the prospect of taxation by the state may reduce the amount the United States might receive from the sale of its property, it is well established that property purchased by a private person from the Federal Government becomes a part of the general mass of property in the state and must bear its fair share of the expenses of local government. The theoretical burden which state
ad valorem
property taxation thus imposes upon the Federal Government is regarded as too remote and indirect to justify tax immunity for property purchased from that Government.
New Brunswick
v.
United States,
Anomalous in the light of these rulings was the evolution of a line of decisions of this Court condemning forms of taxation which would have imposed no more direct or substantial burden upon the United States than would an
ad valorem
property tax applied to property purchased from the United States. Private lessees of restricted or tribal Indian lands came to be held “federal instrumentalities” like the lands themselves, and so immune from various forms of state taxation ranging from a gross production tax on production from the leased lands to a tax upon the lessee’s net income. The theory of the Court was the one which was rejected in directly analogous cases: A state tax on the lessee, the lease, or the profits from the lease would be “a direct hamper upon the effort of the United States to make the best terms that it can
*355
for its wards.”
Gillespie
v.
Oklahoma,
The history of this development is a progression “from exemption of the gross income of the lessee of Indian lands . . . through exemption of net receipts to serious impairment of the taxing powers of Oklahoma.” Cohen, Handbook of Federal Indian Law 257, n. 29 (1942). The development is an outgrowth and a progressive extension of early rulings that tribal lands themselves are immune from state taxation.
24
More immediately it stems from the later ruling that allotted Indian lands held in trust by the United States were “an instrumentality employed by the United States for the benefit and control of this dependent race,” and so were immune from state taxation.
United States
v.
Rickert,
In 1908 Oklahoma imposed, in addition to
ad valorem
property taxes, a gross production tax, the progenitor of the present tax bearing that label, on oil, gas and other minerals produced within the state. Okla. Laws, 1908,
*356
c. 71, Art. II, § 6. The Oklahoma court held that the 1910 reenactment of the statute
25
imposed a property tax.
McAlester-Edwards Coal Co.
v.
Trapp,
The Oklahoma legislature revised the gross production tax statute in 1915 and again in 1916, a principal change being the provision that the tax was in lieu of all other
ad valorem
taxes.
26
The revised tax was held by the Oklahoma Supreme Court to be a property tax.
27
But this Court rejected that construction
sub silentio
and invalidated the tax in memorandum opinions citing only the
Choctaw, O. & G. R. Co.
case (
Suspicions that this Court had overlooked the fact that under the revised statute the gross production tax was in lieu of rather than in addition to all other ad valorem property taxes, 28 were dispelled by Mr. Justice Holmes’ remark in Gillespie v. Oklahoma, supra at 504 — 505, that the statutory change had been noticed and regarded as immaterial. 29 If a gross receipts tax was a burden on the Federal Government “so as to interfere with the performance of its functions, it could not be saved because it was in lieu of a tax upon property or was so characterized.” See James v. Dravo Contracting Co., 302 U. S. 134, 158.
The high-water mark of immunity for non-Indian lessees of restricted and allotted Indian lands came in 1922 when the Gillespie decision, supra, invalidated an Oklahoma net income tax upon income derived by a lessee from sales of his share of oil produced from restricted lands.
The non-Indian lessee’s immunity was last sustained here by Oklahoma v. Barnsdall Refineries, supra. That decision held, on application of a rule of strict construction of congressional waivers, that Congress’ express waiver of immunity from gross production taxes on oil produced from the specified Indian lands did not extend to petroleum excise taxes. The state did not challenge *358 the implied constitutional immunity but pitched its argument on the ground of statutory exemption. 30
The instrumentality doctrine has been applied to confer a correlative immunity upon private lessees of state-owned lands. The Texas rule that oil and gas leases are present sales to the lessees of the oil and gas in place caused this Court to sustain the imposition of the federal income tax upon income of the lessee derived from the sale of oil and gas produced from lands leased from that state. It was observed that “. . . the remote and indirect effects upon the one government of such a non-discriminatory tax by the other have never been considered adequate grounds for thus aiding the one at the expense of the taxing power of the other.”
Group No. 1 Oil Corp.
v.
Bass,
Although this decision may be taken to mark a turning point in expansion of the lessee’s immunity, it was not immediately permitted to impair the
Gillespie
rationale. A tax on income would be no greater burden where, under applicable state law, “title” to the oil did not “pass” until the oil was removed from the ground. And although Justices Brandéis, Stone, Roberts and Cardozo contended that the
Gillespie
decision could not stand consistently with the principles which had been reaffirmed in the
Group No. 1 Oil
case, a majority of one in
Burnet
v.
Coronado Oil & Gas Co.,
A parallel immunity from state occupational or privilege taxes was once accorded private contractors with, or agencies of, the Government,
Williams
v.
Talladega,
*359
Later this Court sustained a state tax on the gross receipts of a contractor with the Federal Government,
James
v.
Dravo Contracting Co.,
“. . . the Constitution, unaided by Congressional legislation, . . . [does not prohibit] a tax exacted from the contractors merely because it is passed on economically, by the terms of the contract or otherwise, as a part of the construction cost to the Government. So far as such a non-discriminatory state tax upon the contractor enters into the cost of the materials to the Government, that is but a normal *360 incident of the organization within the same territory of two independent taxing sovereignties. The asserted right of the one to be free of taxation by the other does not spell immunity from paying the added costs, attributable to the taxation of those who furnish supplies to the Government and who have been granted no tax immunity.” Alabama v. King & Boozer,314 U. S. 1 , 8-9.
The opportunity to reexamine the
Gillespie
and
Coronado
cases arose in 1938 in
Helvering
v.
Mountain Producers Corp.,
Rather the Court sought broader grounding, which lay in reconsideration of the foundations of the Gillespie and Coronado decisions. The opinion stated:
“The ground of the decision in the Gillespie case, as stated by Mr. Justice Holmes in speaking for the Court, was that ‘a tax upon the leases’ was ‘a tax upon the power to make them, and could be *361 used to destroy the power to make them’ (240 U. S. p. 630) and that a tax ‘upon the profits of the leases’ was ‘a direct hamper upon the effort of the United States to make the best terms that it can for its wards.’ [257 U. S. at 506 .] In the light of the expanding needs of State and Nation, the inquiry has been pressed whether this conclusion has adequate basis . . . .”303 U. S. at 384 .
Noting that it had held that the
Gillespie
ruling should be limited strictly to cases closely analogous,
33
and asserting that “the distinctions thus maintained have attenuated its teaching and raised grave doubt as to whether it should longer be supported,”
“In numerous decisions we have had occasion to declare the competing principle, buttressed by the most cogent considerations, that the power to tax should not be crippled ‘by extending the constitutional exemption from taxation to those subjects which fall within the general application of nondiscriminatory laws, and where no direct burden is laid upon the governmental instrumentality and there is only remote, if any, influence upon the exercise of the functions of government.’ Willcuts v. Bunn,282 U. S. 216 , 225, and illustrations there cited.”303 U. S. at 385 .
That competing principle the Court found applicable to the case before it and to require that the decisions in the
Gillespie
and
Coronado
cases be overruled. Rejecting as insubstantial the distinction based on the passage of title to the oil at the time of making the lease, compare
Group
*362
No. 1 Oil Corp.
v.
Bass, supra,
with
Burnet
v.
Coronado Oil & Gas Co., supra,
and after reviewing various other decisions denying the immunity when claimed by private persons,
“These decisions in a variety of applications enforce what we deem to be the controlling view— that immunity from non-discriminatory taxation sought by a private person for his property or gains because he is engaged in operations under a government contract or lease cannot be supported by merely theoretical conceptions of interference with the functions of government. Regard must be had to substance and direct effects.”303 U. S. at 386 .
IV.
Respondents strongly urge that the Mountain Producers decision is not controlling or effective to require reversal in these cases, since it involved a tax on net income rather than gross production and excise taxes. And they insist that a sharp line should be drawn between what they call lessees performing a governmental function and independent contractors doing work for the Government. 34 The latter distinction is largely, if not altogether verbal, in the context of the fact situations in these cases. As for the former difference, although the Court explicitly overruled only the Gillespie and Coro *363 nado cases, the groundings of the Mountain Producers decision do not permit limiting its effects to so narrow an application. 35
The language last quoted above is as applicable to the present cases as it was to the Gillespie and Coronado decisions. The taxes here are nondiscriminatory. The respondents are “private persons” who seek immunity “for their property or gains because they are engaged in operations under a government contract or lease.” The functions they perform in operating the leases are hardly more governmental in character than those performed by lessees of school lands or, indeed, by many contractors with the Government. The lessees in the Mountain Producers case stood identically with the respondents in all these respects.
Moreover the burdens of the taxes here, if any of a character likely to interfere with respondents in carrying out the terms of their leases, are as appropriately to be judged by “regard ... to substance and direct effects,” and as inappropriately to be determined “by merely theoretical conceptions of interference with the functions of government,” as were those in the Mountain Producers case. 36 True, as respondents say, a net income *364 tax may be a step farther removed from interfering effect than a gross production tax or an excise tax on production. But this all depends upon the rate at which each tax is levied.
To the adaptation of Marshall’s oft-quoted aphorism made by Mr. Justice McKenna in
Indian Territory Illuminating Oil Co.
v.
Oklahoma,
The Mountain Producers case was not decided on narrow, merely technical or presumptive grounds. Its very foundation was a repudiation of those insubstantial bases for securing broad private tax exemptions, unjustified by actual interfering or destructive effects upon the performance of obligations to or work for the government, state or national. The decision came as the result of *365 experience and of observation of the constant widening of the exempting process from tax to tax to tax.
Since that decision, as we have noted, the process has been reversed in direction. True intergovernmental immunity remains for the most part. But, so far as concerns private persons claiming immunity for their ordinary business operations (even though in connection with governmental activities), no implied constitutional immunity can rest on the merely hypothetical interferences with governmental functions here asserted to sustain exemption. In the light of the broad groundings of the
Mountain Producers
decision and of later decisions, we cannot say that the
Gipsy Oil, Large Oil
and
Barnsdall Refineries
decisions remain immune to the effects of the
Mountain Producers
decision and others which have followed it. They “are out of harmony with correct principle,” as were the
Gillespie
and
Coronado
decisions and, accordingly, they should be, and they now are, overruled. This accords with the result reached in
Santa Rita Oil Co.
v.
State Board of Equalization,
We do not imply, by this decision, that Congress does not have power to immunize these lessees from the taxes we think the Constitution permits Oklahoma to impose in the absence of such action.
37
The question whether immunity shall be extended in situations like these is
*366
essentially legislative in character. But Congress has not created an immunity here by affirmative action,
38
and “The immunity formerly said to rest on constitutional implication cannot now be resurrected in the form of statutory implication.”
Oklahoma Tax Commission
v.
United States,
The Oklahoma Supreme Court appears to suggest, though the opinions do not flatly so state, as a possible alternative support for its conclusion in these cases that “Congress has acted on the theory that such immunity exists in the case of leases of this character unless waived,” that is, several congressional enactments permit Oklahoma to impose a gross production tax on minerals produced from the lands of the Osages, 39 the Kaws, 40 the Quapaws, 41 and the Five Civilized Tribes, 42 and authorize payment of taxes due on account of the Indians’ royalty interest. But Congress’ purpose in enacting these statutes was the removal of the immunities of the Indians themselves, immunities which are not challenged in these cases; the action was occasioned by the favorable eco *367 nomic position of the particular Indians. 43 The resulting removal of the immunity of private lessees of those Indian lands was an incidental effect of this legislation.
Finally, we refuse to infer from mere congressional silence approval of the doctrine of immunity enunciated in the
Choctaw, O. & G. R. Co., Indian Territory Illuminating Oil
(
Reversed and remanded.
Notes
Interests in the lands to which the United States does not hold title are of two kinds: (1) undivided interests acquired by non-Indians; (2) an interest (which is still restricted) conveyed to the son of an allottee by approved noncompetent Indian deeds, pursuant to the Act of March 1, 1907, 34 Stat. 1018, 25 U. S. C. § 405.
February 8, 1887, 24 Stat. 388, as amended, 25 U. S. C. § 331 et seq.
The allotments were made to members of the Apache and Comanche tribes pursuant to the agreement approved by Congress on June 6, 1900, 31 Stat. 676. Members of the Citizen Band of the Pottawatomie Tribe were allotted land pursuant to the agreement of March 3, 1891, 26 Stat. 1016. Allotments were made to the Otoe and Missouria Indians under the General Allotment Act without special agreement. Mills, Oklahoma Indian Land Laws § 438 (1924).
The nature of the Indians’ interest has been described as follows: "... the United States retained the legal title, giving the Indian allottee a paper or writing, improperly called a patent, showing that at a particular time in the future, unless it was extended by the President, he would be entitled to a regular patent conveying the fee.”
United States
v.
Rickert,
With these exceptions: (1) In a single immaterial instance in No. 40, an undivided 7/16th interest in one of the leases was alienable and was owned by non-Indians. The Texas Company paid without protest the taxes levied against it which were attributable to this 7/16th interest. (2) In No. 41, an undivided l/4th interest in the lands subject to one of the leases and an undivided l/3d interest in the land subject to another lease were owned by non-Indians. The effect of the decision of the Oklahoma Supreme Court was to deny the portion of the assessments applicable to these interests. However, it was conceded at the argument here that the assessments were valid insofar as they applied to interests in lands owned, when the assessments were made, by non-Indian owners or by Indian owners not under restriction.
24 Stat. 389, 390, as amended, 25 U. S. C. §§ 348, 349. See Cohen, Handbook of Federal Indian Law 108-109 (1942). Leases of allotted land for mining purposes may be made with the approval of the Secretary of the Interior under 35 Stat. 783, 25 U. S. C. § 396.
52 Stat. 348, 25 U. S. C. § 396d; 30 C. F. R. Cum. Supp. §§ 221.1-221.67.
52 Okla. Stat. §§81-286.17 (Conservation of Oil and Gas), §§ 291-303 (Regulation and Inspection of Wells) (Cum. Supp. 1947) ; Order No. 1299 — Cause No. 2935, Thirty-seventh Annual Report of Corporation Comm’n of Okla., 1944, p. 84.
The assumption stated in the text is made, although in No. 41 the commission excluded, as irrelevant, evidence tendered to show compliance with the federal and state regulations, and in No. 40 no evidence of compliance was introduced.
The three oil and gas leases involved in No. 40 were made by members of the Apache Tribe to non-Indian lessees who assigned their interests to the Texas Company. In No. 41, in which eight leases are involved, the Indian lessors are members of the Apache, Comanche, Citizen Pottawatomie, and Otoe and Missouria Tribes.
Undivided interests in the lands subject to certain leases were held by non-Indians at the time of assessment. See notes 1 and 4,
68 Okla. Stat. §821 (1941). The (general) scheme of the tax is as follows: The tax falls due on the first day of each calendar month as to production during the preceding month. The purchaser pays the tax on oil or gas sold at the time of production and is authorized to deduct the amount of tax paid when settling with the producer (and with the royalty owner in cases in which the tax applies to him, see note 14). If the tax becomes due before the oil is sold, the producer is required to pay the tax for himself (and, in cases where the tax applies to royalties, see note 14, for the royalty owner, and is permitted to deduct the amount of tax paid on royalty oil when settling with the royalty owner). 68 id. § 833. The tax is a first and paramount lien against the property of the person liable for the tax. 68 id. § 836.
Of the proceeds received from the tax, 78 per cent is paid into the state treasury to be used for the general expenses of state government. Ten per cent is paid to the county treasurer of the county in which the oil or gas was produced, and is used for the construction and maintenance of county highways. Ten per cent is paid to the county treasurer for distribution among the county’s school districts. The remaining two per cent is placed to the credit of the Oklahoma Tax Commission and is used for collection and enforcement activities. 68 id. §827 (Cum. Supp. 1947).
But see note 27 and text infra.
The amount of the tax was one-eighth of one cent per barrel for the period prior to July 1, 1943, Okla. Laws, 1941, tit. 68, c. 26, and one mill per barrel after that date, Okla. Laws, 1943, tit. 68, c. 26. The Texas Company was assessed under the former act. Magnolia was assessed under both acts.
Okla. Laws, 1933, e. 131, as amended, 52 Okla. Stat. 81 et seq. (Cum. Supp. 1947).
Okla. Laws, 1933, c. 132; Okla. Laws, 1935, c. 59, Art. 2; Okla. Laws, 1937, c. 59, Art. 2; Okla. Laws, 1939, c. 66, Art. 7; Okla. Laws, 1941, tit. 68, c. 26; Okla. Laws, 1943, tit. 68, c. 26; Okla. Laws, 1945, tit. 68, c. 26; Okla. Laws, 1947, tit. 68, c. 26. The present statute appears at 68 Okla. Stat. § 1220.1 et seq. (Cum. Supp. 1947).
The tax receipts, collected in the same manner as in the case of the gross production tax, present 68 Okla. Stat. § 1220.1 (Cum. Supp. 1947), are deposited to the credit of the “Conservation Fund” and the “Interstate Oil Compact Fund of Oklahoma.” 68 id. 1220.3.
Although the Oklahoma statutes in their general application lay the taxes on gross production, including royalties, cf. notes 9 and 13, they provide, with respect to the gross production tax, that the producer, in his required monthly statement to the Oklahoma Tax Commission, state “where such royalty is claimed to be exempt from taxation by law, the facts on which such claim of *348 exemption is based.” 68 Okla. Stat. §821 (1941). This provision is made applicable to the petroleum excise tax by the first section of each of the several enactments establishing and continuing that exaction. See note 13 supra. Only the interests of the lessees were assessed in these cases.
The Oklahoma Supreme Court rendered separate, unreported opinions. The principal opinion, filed in the Texas Company case, was followed in the later one filed in the Magnolia Petroleum case. Rehearing was denied in both cases.
The original judgment in the Texas Company case provided for reversal of the trial court’s judgment, with directions to overrule the commission’s demurrer “and proceed consistent with the views *349 here expressed.” On motion of counsel for the commission this was modified to provide that “The trial court judgment ... is reversed” and that “final judgment is hereby rendered for plaintiff and against the defendant for the sum sued for,” thus eliminating all question concerning the finality of the judgment.
See note 15 supra.
Pursuant to former §237 (c) of the Judicial Code, as amended, 28 U. S. C. § 344 (c), present 28 U. S. C. § 2103.
Thomson
v.
Pacific R. Co.,
See note 27 and text.
But see text
infra,
Part III. Unless the measure of a tax is fairly to be considered as designed to conceal or distort unduly its true nature, the tax is not to be invalidated because the measure is not one customarily employed if as applied it achieves fairly the purpose for which it is avowedly laid, that purpose of course being one within the legislative power to accomplish.
American Mfg. Co.
v.
St. Louis,
See note 14
supra.
Cf.
Carpenter
v.
Shaw,
At note 18.
Distinguishing
Jaybird Mining Co.
v.
Weir,
See
The Kansas Indians,
As to the immunity from state taxation of lands acquired by individual Indians by treaty or under the general homestead laws rather than under the General Allotment Act, see Cohen, op. cit. supra note 5, at 257-258,259-260.
Lands outside a reservation purchased with restricted Indian funds from a person who did not hold the land tax exempt were held subject to state taxes in
Shaw
v.
Gibson-Zahniser Oil Corp.,
Okla. Laws, 1910, c. 44, § 6, adding a provision permitting the producer to deduct the amount of royalties paid for the benefit of an Indian tribe.
Okla. Laws, 1915, c. 107, Art. 2, subd. A; Okla. Laws, 1916, c. 39. Further amendments were made by Okla. Laws, 1933, c. 103, and by Okla. Laws, 1935, c. 66, Art. 4. See note 9 and text supra.
Large Oil Co.
v.
Howard,
The Oklahoma Supreme Court assumed for a time that the statutory difference was overlooked by this Court and that an opposite result would have been reached had the difference been noticed.
In re Skelton Lead & Zinc Co.’s Gross Production Tax, 1919,
The Oklahoma Supreme Court capitulated in
Atchison, T. & S. F. R. Co.
v.
McCurdy,
See note 39 infra.
Cf. the contemporary case of
Willcuts
v.
Bunn,
Cf.
Burnet
v.
A. T. Jergins Trust,
Citing
Burnet
v.
Coronado Oil & Gas Co.,
Among the cases which one or the other of respondents attempts to distinguish on the ground that the tax was imposed on an independent contractor rather than a “true Federal instrumentality” are:
James
v.
Dravo Contracting Co.,
It is also contended that cases sustaining taxes on the property of a federal instrumentality,
e. g., Railroad Co.
v.
Peniston,
The incongruity of the doctrine respondents ask us to perpetuate is underscored by decisions subsequent to the
Mountain Producers
case withdrawing income tax immunity for state and federal official salaries.
Helvering
v.
Gerhardt,
See generally, Powell, The Waning of Intergovernmental Tax Immunities, 58 Harv. L. Rev. 633; Powell, The Remnant of Intergovernmental Tax Immunities, 58 Harv. L. Rev. 757.
Respondents merely assert hypothetically that imposition of the taxes might in some instances make the margin between successful and unsuccessful operation. Leases approved by the Secretary of the Interior provided for the same rental and royalty payments both before and after the Mountain Producers decision. 25 C. F. R. § 189.16. And rental and royalty payments provided for by the *364 Department of the Interior are the same for lands allotted under the General Allotment Act as they are for lands of members of the Five Civilized Tribes, 25 C. F. R. §§ 183.24, 189.16. Production from the latter lands has been subject to Oklahoma’s gross production tax since 1928. See note 42 infra. The Government, in its brief amicus curiae, states that, because differences in the value of different tracts of land would be reflected in the bonuses which lessees are willing to pay, an exact comparison of bonuses is impossible.
See
James
v.
Dravo Contracting Co.,
See Cohen, op. cit. supra note 5, at 255-256.
41 Stat. 1250. As has been stated,
Oklahoma
v.
Barnsdall Refineries,
43 Stat. 176.
41 Stat. 1248, as amended, 50 Stat. 68.
45 Stat. 496.
H. R. Rep. No. 1377, 66th Cong., 3d Sess. 4; H. R. Rep. No. 1278, 66th Cong., 3d Sess. 2-3; S. Rep. No. 704, 66th Cong., 3d Sess. 3 (all relating to the Osage Act, note 39 supra); H. R. Rep. No. 269, 68th Cong., 1st Sess. 3; S. Rep. No. 433, 68th Cong., 1st Sess. 3 (both relating to the Kaw Act, note 40 supra); H. R. Rep. No. 431, 75th Cong., 1st Sess.; S. Rep. No. 234, 75th Cong., 1st Sess. 2 (both relating to the Quapaw Act, note 41 supra); H. R. Rep. No. 1193, 70th Cong., 1st Sess. 5; S. Rep. No. 982, 70th Cong., 1st Sess. 4-5 (both relating to the Five Civilized Tribes Act, note 42 supra).
Respondents also urge that the Oklahoma legislature has recognized the immunity they assert here by authorizing the refund of “payment made in error on account of the production being derived from restricted Indian lands and therefore exempt from taxation.” 68 Okla. Stat. §832 (1941). Although respondents tell us that this argument was urged upon the Oklahoma Supreme Court, that court did not mention this possible state ground but rested its decision exclusively on the federal ground. We do not purport to decide whether Oklahoma law affords the exemption which federal law denies.
See note 4 as to the assessments attributable to the undivided interests in lands held by non-Indians in No. 41.