author: Ms. Justice Marshall Mr. Justice Stevens,

text:
    WHITE MOUNTAIN APACHE TRIBE et al. v. BRACKER et al.
    No. 78-1177.
    Argued January 14, 1980
    Decided June 27, 1980

      Mabshall, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, Blackmun, and Powell, JJ., joined. Powell, J., filed a concurring opinion, post, p. 170. Stevens, J., filed a dissenting opinion, in which Stewart and Rehnquist, JJ., joined, post, p. 153.

      Neil Vincent Wake argued the cause for petitioner Pinetop Logging Co. Michael J. Brown argued the cause for petitioner White Mountain Apache Tribe. With them on the briefs were Leo R. Beus and Kathleen A. Rihr.

      Ian A. Macpherson, Assistant Attorney General of Arizona, argued the cause for respondents. With him on the brief were Robert K. Corbin, Attorney General, and Anthony B. Ching, Solicitor General.

      Elinor Hadley Stillman argued the cause for the United States as amicus curiae urging reversal. With her on the brief were Solicitor General McCree, Assistant Attorney General Moorman, Deputy Solicitor General Claiborne, and Robert L. Klarquist.

   Ms. Justice Marshall

delivered the opinion of the Court. In this case we áre once again called upon to consider the extent of state authority over the activities of non-Indians engaged in commerce on an Indian reservation. The State of Arizona seeks to apply its motor carrier license and use fuel taxes to petitioner Pinetop Logging Co. (Pinetop), an enterprise consisting of two non-Indian corporations authorized to do business in Arizona and operating solely on the Fort Apache Reservation. Pinetop and petitioner White Mountain Apache Tribe contend that the taxes are pre-empted by federal law or, alternatively, that they represent an unlawful infringement on tribal self-government. The Arizona Court of Appeals rejected petitioners’ claims. We hold that the taxes are pre-empted by federal law, and we therefore reverse.

I

The 6,500 members of petitioner White Mountain Apache Tribe reside on the Fort Apache Reservation in a mountainous and forested region of northeastern Arizona. The Tribe is organized under a constitution approved by the Secretary of the Interior under the Indian Reorganization Act, 25 U. S. C. § 476. The revenue used to fund the Tribe’s governmental programs is derived almost exclusively from tribal enterprises. Of these enterprises, timber operations have proved by far the most important, accounting for over 90% of the Tribe’s total annual profits.

The Fort Apache Reservation occupies over 1,650,000 acres, including 720,000 acres of commercial forest. Approximately 300,000 acres are used for the harvesting of timber on a “sustained yield” basis, permitting each area to be cut every 20 years without endangering the forest’s continuing productivity. Under federal law, timber on reservation land is owned by the United States for the benefit of the Tribe and cannot be harvested for sale without the consent of Congress. Acting under the authority of 25 CFR § 141.6 (1979) and the tribal constitution, and with the specific approval of the Secretary of the Interior, the Tribe in 1964 organized the Fort Apache Timber Co. (FATCO), a tribal enterprise that manages, harvests, processes, and sells timber. FATCO, which conducts all of its activities on the reservation, was created with the aid of federal funds. It employs about 300 tribal members.

The United States has entered into contracts with FATCO, authorizing it to harvest timber pursuant to regulations of the Bureau of Indian Affairs. FATCO has itself contracted with six logging companies, including Pinetop, which perform certain operations that FATCO could not carry out as economically on its own. Since it first entered into agreements with FATCO in 1969, Pinetop has been required to fell trees, cut them to the correct size, and transport them to FATCO’s sawmill in return for a contractually specified fee. Pinetop employs approximately 50 tribal members. Its activities, performed solely on the Fort Apache Reservation, are subject to extensive federal control.

In 1971 respondents sought to impose on Pinetop the two state taxes at issue here. The first, a motor carrier license tax, is assessed on “[e]very common motor carrier of property and every contract motor carrier of property.” Ariz. Rev. Stat. Ann. § 40-641 (A)(1) (Supp. 1979). Pinetop is a “contract motor carrier of property” since it is engaged in “the transportation by motor vehicle of property, for compensation, on any public highway.” § 40-601 (A) (1) (1974). The motor carrier license tax amounts to 2.5% of the carrier’s gross receipts. § 40-641 (A)(1) (Supp. 1979). The second tax at issue is an excise or use fuel tax designed “[f]or the purpose of partially compensating the state for the use of its highway ” Ariz. Rev. Stat. Ann. § 28-1552 (Supp. 1979). The tax amounts to eight cents per gallon of fuel used “in the propulsion of a motor vehicle on any highway within this state.” Ibid. The use fuel tax was assessed on Pinetop because it uses diesel fuel to propel its vehicles on the state highways within the Fort Apache Reservation.

Pinetop paid the taxes under protest, and then brought suit in state court, asserting that under federal law the taxes could not lawfully be imposed on logging activities conducted exclusively within the reservation or on hauling activities on Bureau of Indian Affairs and tribal roads. The Tribe agreed to reimburse Pinetop for any tax liability incurred as a result of its on-reservation business activities, and the Tribe intervened in the action as a plaintiff.

Both petitioners and respondents moved for summary judgment on the issue of the applicability of the two taxes to Pinetop. Petitioners submitted supporting affidavits from the manager of FATCO, the head forester of the Bureau of Indian Affairs, and the Chairman of the White Mountain Apache Tribal Council; respondents offered no affidavits disputing the factual assertions by petitioners’ affiants. The trial court awarded summary judgment to respondents, and the petitioners appealed to the Arizona Court of Appeals. The Court of Appeals rejected petitioners’ pre-emption claim. 120 Ariz. 282, 585 P. 2d 891 (1978). Purporting to apply the test set forth in Pennsylvania v. Nelson, 350 U. S. 497 (1956), the court held that the taxes did not conflict with federal regulation of tribal timber, that the federal interest was not so dominant as to preclude assessment of the challenged state taxes, and that the federal regulatory scheme did not “occupy the field.” The court also concluded that the state taxes would not unlawfully infringe on tribal self-government. The Arizona Supreme Court declined to review the decision of the Court of Appeals. We granted certiorari. 444 U. S, 823 (1980).

II

Although “ [generalizations on this subject have become . . . treacherous,” Mescalero Apache Tribe v. Jones, 411 U. S. 145, 148 (1973), our decisions establish several basic principles with respect to the boundaries between state regulatory authority and tribal self-government. Long ago the Court departed from' Mr. Chief Justice Marshall’s view that “the laws of [a State] can have no force” within reservation boundaries, Worcester v. Georgia, 6 Pet. 515, 561 (1832). See Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 481-483 (1976); New York ex rel. Ray v. Martin, 326 U. S. 496 (1946); Utah & Northern R. Co. v. Fisher, 116 U. S. 28 (1885). At the same time we have recognized that the Indian tribes retain “attributes of sovereignty over both their members and their territory.” United States v. Mazurie, 419 U. S. 544, 557 (1975). See also United States v. Wheeler, 435 U. S. 313, 323 (1978); Santa Clara Pueblo v. Martinez, 436 U. S. 49, 55-56 (1978). As a result, there is no rigid rule by which to resolve the question whether a particular state law may be applied to an Indian reservation or to tribal members. The status of the tribes has been described as “ 'an anomalous one and of complex character,’ ” for despite their partial assimilation into American culture, the tribes have retained “ 'a semi-independent position . . . not as States, not as nations, not as possessed of the full attributes of sovereignty, but as a separate people, with the power of regulating their internal and social relations, and thus far not brought under the laws of the Union or of the State within whose limits they resided.’ ” McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164, 173 (1973), quoting United States v. Kagama, 118 U. S. 375, 381-382 (1886).

Congress has broad power to regulate tribal affairs under the Indian Commerce Clause, Art. 1, § 8, cl. 3. See United States v. Wheeler, supra, at 322-323. This congressional authority and the “semi-independent position” of Indian tribes have given rise to two independent but related barriers to the assertion of state regulatory authority over tribal reservations and members. First, the exercise of such authority may be pre-empted by federal law. See, e. g.. Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685 (1965); McClanahan v. Arizona State Tax Comm’n, supra. Second, it may unlawfully infringe “on the right of reservation Indians to make their own laws and be ruled by them.” Williams v. Lee, 358 U. S. 217, 220 (1959). See also Washington v. Yakima Indian Nation, 439 U. S. 463, 502 (1979); Fisher v. District Court, 424 U. S. 382 (1976) (per curiam); Kennedy v. District Court of Montana, 400 U. S. 423 (1971). The two barriers are independent because either, standing alone, can be a sufficient basis for holding state law inapplicable to activity undertaken on the reservation or by tribal members. They are related, however, in two important ways. The right of tribal self-government is ultimately dependent on and subject to the broad power of Congress. Even so, traditional notions of Indian self-government are so deeply engrained in our jurisprudence that they have provided an important “backdrop,” McClanahan v. Arizona State Tax Comm’n, supra, at 172, against which vague or ambiguous federal enactments must always be measured.

The unique historical origins of tribal sovereignty make it generally unhelpful to apply to federal enactments regulating Indian tribes those standards of pre-emption that have emerged in other areas of the law. Tribal reservations are not States, and the differences in the form and nature of their sovereignty make it treacherous to import to one notions of pre-emption that are properly applied to the other. The tradition of Indian sovereignty over the reservation and tribal members must inform the determination whether the exercise of state authority has been pre-empted by operation of federal law. Moe v. Salish & Kootenai Tribes, supra, at 475. As we have repeatedly recognized, this tradition is reflected and encouraged in a number of congressional enactments demonstrating a firm federal policy of promoting tribal self-sufficiency and economic development. Ambiguities in federal law have been construed generously in order to comport with these traditional notions of sovereignty and with the federal policy of encouraging tribal independence. See McClanahan v. Arizona State Tax Comm’n, supra, at 174-175, and n. 13. We have thus rejected the proposition that in order to find a particular state law to have been pre-empted by operation of federal law, an express congressional statement to that effect is required. Warren Trading Post Co. v. Arizona Tax Comm’n, supra. At the same time any applicable regulatory interest of the State must be given weight, McClanahan v. Arizona State Tax Comm’n, supra, at 171, and “automatic exemptions 'as a matter of constitutional law’ ” are unusual. Moe v. Salish & Kootenai Tribes, 425 U. S., at 481, n. 17.

When on-reservation conduct involving only Indians is at issue, state law is generally inapplicable, for the State’s regulatory interest is likely to be minimal and the federal interest in encouraging tribal self-government is at its strongest. See Moe v. Salish & Kootenai Tribes, supra, at 480-481; McClanahan v. Arizona State Tax Comm’n. More difficult questions arise where, as here, a State asserts authority over the conduct of non-Indians engaging in activity on the reservation. In such cases we have examined the language of the relevant federal treaties and statutes in terms of both the broad policies that underlie them and the notions of sovereignty that have developed from historical traditions of tribal independence. This inquiry is not dependent on mechanical or absolute conceptions of state or tribal sovereignty, but has called for a particularized inquiry into the nature of the state, federal, and tribal interests at stake, an inquiry designed to determine whether, in the specific context, the exercise of state authority would violate federal law. Compare Warren Trading Post Co. v. Arizona Tax Comm’n, supra, and Williams v. Lee, supra, with Moe v. Salish & Kootenai Tribes, supra, and Thomas v. Gay, 169 U. S. 264 (1898). Cf. McClanahan v. Arizona State Tax Comm’n, 411 U. S., at 171; Mescalero Apache Tribe v. Jones, 411 U. S., at 148.

Ill

With these principles in mind, we turn to the respondents’ claim that they may, consistent with federal law, impose the contested motor vehicle license and use fuel taxes on the logging and hauling operations of petitioner Pinetop. At the outset we observe that the Federal Government’s regulation of the harvesting of Indian timber is comprehensive. That regulation takes the form of Acts of Congress, detailed regulations promulgated by the Secretary of the Interior, and day-to-day supervision by the Bureau of Indian Affairs. Under 25 U. S. C. §§ 405-407, the Secretary of the Interior is granted broad authority over the sale of timber on the reservation. Timber on Indian land may be sold only with the consent of the Secretary, and the proceeds from any such sales, less administrative expenses incurred by the Federal Government, are to be used for the benefit of the Indians or transferred to the Indian owner.. Sales of timber must “be based upon a consideration of the needs and best interests of the Indian owner and his heirs.” 25 U. S. C. § 406 (a). The statute specifies the factors which the Secretary must consider in making that determination. In order to assure the continued productivity of timber-producing land on tribal reservations, timber on unallotted lands “may be sold in accordance with the principles of sustained yield.” 25 U. S. C. § 407. The Secretary is granted power to determine the disposition of the proceeds from timber sales. He is authorized to promulgate regulations for the operation and management of Indian forestry units. 25 U. S. C. § 466.

Acting pursuant to this authority, the Secretary has promulgated a detailed set of regulations to govern the harvesting and sale of tribal timber. Among the stated objectives of the regulations is the “development of Indian forests by the Indian people for the purpose of promoting self-sustaining communities, to the end that the Indians may receive from their own property not only the stumpage value, but also the benefit of whatever profit it is capable of yielding and whatever labor the Indians are qualified to perform.” 25 CFR § 141.3 (a)(3) (1979). The regulations cover a wide variety of matters: for example, they restrict clear-cutting, § 141.5; establish comprehensive guidelines for the sale of timber, §141.7; regulate the advertising of timber sales, §§141.8, 141.9; specify the manner in which bids may be accepted and rejected, §141.11; describe the circumstances in which contracts may be entered into, §§ 141.12, 141.13; require the approval of all contracts by the Secretary, § 141.13; call for timber-cutting permits to be approved by the Secretary, § 141.19; specify fire protective measures, § 141.21; and provide a board of administrative appeals, § 141.23. Tribes are expressly authorized to establish commercial enterprises for the harvesting and logging of tribal timber. § 141.6.

Under these regulations, the Bureau of Indian Affairs exercises literally daily supervision over the harvesting and management of tribal timber. In the present case, contracts between FATCO and Pinetop must be approved by the Bureau; indeed, the record shows that some of those contracts were drafted by employees of the Federal Government. Bureau employees regulate the cutting, hauling, and marking of timber by FATCO and Pinetop. The Bureau decides such matters as how much timber will be cut, which trees will be felled, which roads are to be used, which hauling equipment Pinetop should employ, the speeds at which logging equipment may travel, and the width, length, height, and weight of loads.

The Secretary has also promulgated detailed regulations governing the roads developed by the Bureau of Indian Affairs. 25 CFR Part 162 (1979). Bureau roads are open to “[f]ree public use.” § 162.8. Their administration and maintenance are funded by the Federal Government, with contributions from the Indian tribes. §§ 162.6-162.6a. On the Fort Apache Reservation the Forestry Department of the Bureau has required FATCO and its contractors, including Pinetop, to repair and maintain existing Bureau and tribal roads and in some cases to construct new logging roads. Substantial sums have been spent for these purposes. In its federally approved contract with FATCO, Pinetop has agreed to construct new roads and to repair existing ones. A high percentage of Pinetop’s receipts are expended for those purposes, and it has maintained separate personnel and equipment to carry out a variety of tasks relating to road maintenance.

In these circumstances we agree with petitioners that the federal regulatory scheme is so pervasive as to preclude the additional burdens sought to be imposed in this case. Respondents seek to apply their motor vehicle license and use fuel taxes on Pinetop for operations that are conducted solely on Bureau and tribal roads within the reservation. There is no room for these taxes in the comprehensive federal regulatory scheme. In a variety of ways, the assessment of state taxes would obstruct federal policies. And equally important, respondents have been unable to identify any regulatory function or service performed by the State that would justify the assessment of taxes for activities on Bureau and tribal roads within the reservation.

At the most general level, the taxes would threaten the overriding federal objective of guaranteeing Indians that they will “receive . . . the benefit of whatever profit [the forest] is capable of yielding. . . .” 25 CFR, § 141.3 (a)(3) (1979). Underlying the federal regulatory program rests a policy of assuring that the profits derived from timber sales will inure to the benefit of the Tribe, subject only to administrative expenses incurred by the Federal Government. That objective is part of the general federal policy of encouraging tribes “to revitalize their self-government” and to assume control over their “business and economic affairs.” Mescalero Apache Tribe v. Jones, 411 U. S., at 151. The imposition of the taxes at issue would undermine that policy in a context in which the Federal Government has undertaken to regulate the most minute details of timber production and expressed a firm desire that the Tribe should retain the benefits derived from the harvesting and sale of reservation timber.

In addition, the taxes would undermine the Secretary’s ability to make the wide range of determinations committed to his authority concerning the setting of fees and rates with respect to the harvesting and sale of tribal timber. The Secretary reviews and approves the terms of the Tribe’s agreements with its contractors, sets fees for services rendered to the Tribe by the Federal Government, and determines stump-age rates for timber to be paid to the Tribe. Most notably in reviewing or writing the terms of the contracts between FATCO and its contractors, federal agents must predict the amount and determine the proper allocation of all business expenses, including fuel costs. The assessment of state taxes would throw additional factors into the federal calculus, reducing tribal revenues and diminishing the profitability of the enterprise for potential contractors.

Finally, the imposition of state taxes would adversely affect the Tribe’s ability to comply with the sustained-yield management policies imposed by federal law. Substantial expenditures are paid out by the Federal Government, the Tribe, and its contractors in order to undertake a wide variety of measures to ensure the continued productivity of the forest. These measures include reforestation, fire control, wildlife promotion, road improvement, safety inspections, and general policing of the forest. The expenditures are largely paid for out of tribal revenues, which are in turn derived almost exclusively from the sale of timber. The imposition of state taxes on FATCO’s contractors would effectively diminish the amount of those revenues and thus leave the Tribe and its contractors with reduced sums with which to pay out federally required expenses.

As noted above, this is not a case in which the State seeks to assess taxes in return for governmental functions it performs for those on whom the taxes fall. Nor have respondents been able to identify a legitimate regulatory interest served by the taxes they seek to impose. They refer to a general desire to raise revenue, but we are unable to discern a responsibility or service that justifies the assertion of taxes imposed for on-reservation operations conducted solely on tribal and Bureau of Indian Affairs roads. Pinetop’s business in Arizona is conducted solely on the Fort Apache Reservation. Though at least the use fuel tax purports to “compensat[e] the state for the use of its highways,” Ariz. Rev. Stat. Ann. § 28-1552 (Supp. 1979), no such compensatory purpose is present here. The roads at issue have been built, maintained, and policed exclusively by the Federal Government, the Tribe, and its contractors. We do not believe that respondents’ generalized interest in raising revenue is in this context sufficient to permit its proposed intrusion into the federal regulatory scheme with respect to the harvesting and sale of tribal timber.

Respondents’ argument is reduced to a claim that they may assess taxes on non-Indians engaged in commerce on the reservation whenever there is no express congressional statement to the contrary. That is simply not the law. In a number of cases we have held that state authority over non-Indians acting on tribal reservations is pre-empted even though Congress has offered no explicit statement on the subject. See Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685 (1965); Williams v. Lee, 358 U. S. 217 (1958); Kennerly v. District Court of Montana, 400 U. S. 423 (1971). The Court has repeatedly emphasized that there is a significant geographical component to tribal sovereignty, a component which remains highly relevant to the pre-emption inquiry; though the reservation boundary is not absolute, it remains an important factor to weigh in determining whether state authority- has exceeded the permissible limits. “ ‘The cases in this Court have consistently guarded the authority of Indian governments over their reservations.’ ” United States v. Mazurie, 419 U. S., at 558, quoting Williams v. Lee, supra, at 223. Moreover, it is undisputed that the economic burden of the asserted taxes will ultimately fall on the Tribe. Where, as here, the Federal Government has undertaken comprehensive regulation of the harvesting and sale of tribal timber, where a number of the policies underlying the federal regulatory scheme are threatened by the taxes respondents seek to impose, and where respondents are unable to justify the taxes except in terms of a generalized interest in raising revenue, we believe that thé proposed exercise of state authority is impermissible.

Both the reasoning and result in this case follow naturally from our unanimous decision in Warren Trading Post Co. v. Arizona Tax Comm’n, supra. There the State of Arizona sought to impose a “gross proceeds” tax on a non-Indian company which conducted a retail trading business on the Navajo Indian Reservation. Referring to the tradition of sovereign power over the reservation, the Court held that the “comprehensive federal regulation of Indian traders” prohibited the assessment of the attempted taxes. Id., at 688. No federal statute by its terms precluded the assessment of state tax. Nonetheless, the “detailed regulations,” specifying “in the most minute fashion,” id., at 689, the. licensing and regulation of Indian traders, were held “to show that Congress has taken the business of Indian trading on reservations so fully in hand that no room remains for state laws imposing additional burdens upon traders.” Id., at 690. The imposition of those burdens, we held, “could . . . disturb and disarrange the statutory plan” because the economic burden of the state taxes would eventually be passed on to the Indians themselves. Id., at 691. We referred to the fact that the Tribe had been “largely free to run the reservation and its affairs without state control, a policy which has automatically relieved Arizona of all burdens for carrying on those same responsibilities.” Id., at 690. And we emphasized that “since federal legislation has left the State with no duties or responsibilities respecting the reservation Indians, we cannot believe that Congress intended to leave to the State the privilege of levying this tax.” Id., at 691. The present case, we conclude, is in all relevant respects indistinguishable from Warren Trading Post.

The decision of the Arizona Court of Appeals is

Reversed.

[For concurring opinion of Me. Justice Powell, see post, p. 170.]

Mr. Justice Stevens,

with whom Mr. Justice Stewart and Mr. Justice Rehnquist join, dissenting.

The State of Arizona imposes use fuel and motor carrier license taxes on certain businesses in order to compensate it for their greater than normal use of public roads. See post, at 174, n. 3 (Powell, J., concurring). The issue originally presented to this Court was whether the State was prohibited from imposing such taxes on a non-Indian joint venture (Pinetop Logging Co.) hired by the petitioner Tribe to perform logging operations on the Fort Apache Reservation, when the taxes were based on Pinetop’s use of roads located solely within the reservation. In light of the concessions made by both sides at various stages of the litigation, however, I doubt that we should reach that issue in this case.. Moreover, even if the merits were properly before us, I could not agree with the Court’s determination that the state taxes are pre-empted by federal law.

Between November 1971 and May 1976, Pinetop paid under protest use fuel taxes of $19,114.59 and motor carrier license taxes of $14,701.42. The Arizona Court of Appeals determined that the latter assessment improperly denied Pinetop a 60% credit to which it was entitled under state law. After allowance for that credit, the total amount of the disputed taxes for the 4%-year period is reduced to about $25,000 or $5,000-$6,000 per year.

The taxes actually in dispute, however, are considerably less. Pinetop concedes that some of its operations are subject to tax and the State concedes that Pinetop is entitled to additional credits. To understand these concessions it is necessary to note that Pinetop’s vehicles operate on four different kinds of roads within the Fort Apache Reservation: (1) state highways; (2) federally funded (Bureau of Indian Affairs) roads serving recreational public needs; (3) tribal roads exclusively financed and maintained by the Indians; and (4) private logging roads built and maintained by loggers such as Pinetop.

Although Pinetop represents that its use of the Arizona state highways within the reservation is extremely limited, it does not dispute its tax liability for such use. On the other hand, in this Court the State expressly conceded that its assessments were improper under state law to the extent that they applied to operations on either private logging roads or tribal roads. If it is conceded that the State may tax Pinetop’s use of public roads maintained by the State and may not tax the use of tribal or private roads, the question that arises is whether the public roads maintained by the Bureau of Indian Affairs are more akin to the former or to the latter. It appears that the BIA roads are like the state highways insofar as they are open to use by the general public. On the other hand, it also appears that they were constructed and maintained by the Federal Government and are policed by federal and tribal officers.

Under these circumstances I think the most appropriate disposition would be to vacate the judgment of the Arizona Court of Appeals and remand for further consideration in light of the concessions made on behalf of the State in this Court. As the Court and Mr. Justice Powell point out, it is difficult to see why those concessions are not an acknowledgment that the State has no authority to tax the use of roads in which it has no interest. See ante, at 148, n. 14 (opinion of the Court); post, at 174 (Powell, J., concurring). If the state court were given an opportunity to focus on this point, we might well find that there is no remaining federal issue to be decided.

Even assuming, however, that the state courts would uphold the imposition of taxes based on the use of BIA roads, despite their similarities to private and tribal roads, I would not find those taxes to be pre-empted by federal law. In Warren Trading Post v. Arizona Tax Comm’n, 380 U. S. 685, the Court held that state taxation of a non-Indian doing business with a tribe on the reservation was pre-empted because the taxes threatened to “disturb and disarrange” a pervasive scheme of federal regulation and because there was no governmental interest on the State’s part in imposing such a burden. See Central Machinery Co. v. Arizona State Tax Comm’n, post, at 168 (Stewart, J., dissenting). In this case we may assume, arguendo, that the second factor relied upon in Warren Trading Post is present. As a result, Pine-top may well have a right to be free from taxation as a matter of due process or equal protection. But I cannot agree that it has a right to be free from taxation because of its business relationship with the petitioner Tribe.

As the Court points out, the Federal Government has imposed a detailed scheme of regulation on the tribal logging business. Thus, among other things, the BIA approves and sometimes drafts contracts between the Tribe and non-Indian logging companies such as Pinetop and requires the Tribe and its contractors to follow BIA’s dictates as to where to cut, haul, and mark timber, and as to which roads to construct and repair. Ante, at 148, n. 14. The Court reasons that, because the imposition of state taxes on non-Indian contractors is likely to increase the price of their services to the Tribe and thus decrease the profitability of the tribal enterprise, the taxes would substantially interfere with this scheme. Thus, the Court states that the taxes threaten the “overriding federal objective” of guaranteeing Indians all the profits the forest is capable of yielding, “undermine” the Federal Government’s ability to set fees and rates with respect to non-Indian contractors, and “adversely affect the Tribe’s ability to comply with the sustained-yield management policies imposed by federal law.” Ante, at 149-150.

From a practical standpoint, the Court’s prediction of massive interference with federal forest-management programs seems overdrawn, to say the least. The logging operations involved in this case produced a profit of $1,508,713 for the Indian tribal enterprise in 1973. As noted above, the maximum annual taxes Pinetop would be required to pay would be $5,000-$6,000 or less than 1% of the total annual profits. Given the State’s concession in this Court that the use of certain roads should not have been taxed as a matter of state law, the actual taxes Pinetop would be required to pay would probably be considerably less. It is difficult to believe that these relatively trivial taxes could impose an economic burden that would threaten to “obstruct federal policies.”

Under these circumstances I find the Court’s reliance on the indirect financial burden imposed on the Indian Tribe by state taxation of its contractors disturbing. As a general rule, a tax is not invalid simply because a nonexempt taxpayer may be expected to pass all or part of the cost of the tax through to a person who is exempt from tax. See United States v. Detroit, 355 U. S. 466, 469; cf. Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134. In Warren Trading Post the Court found an exception to this rule where Congress had chosen to regulate the relationship between an Indian tribe and a non-Indian trader to such an extent that there was no room for the additional burden of state taxation. In this case, since the state tax is unlikely to have a serious adverse impact on the tribal business, I would not infer the same congressional intent to confer a tax immunity. Although this may be an appropriate way in which to subsidize Indian industry and encourage Indian self-government, I would require more explicit evidence of congressional intent than that relied on by the Court today.

I respectfully dissent.

       The Fort Apache Reservation was originally established as the White Mountain Reservation by an Executive Order signed by President Grant on November 9, 1871. By the Act of Congress of June 7, 1897, 30 Stat. 64; the White Mountain Reservation was divided into the Fort Apache and San Carlos Reservations.

       In 1973, for example, tribal enterprises showed a net profit of $1,667,091, $1,508,713 of which was attributable to timber operations.

       FATCO initially attempted to perform some of its own logging and hauling operations but found itself unable to do these tasks economically.

       Respondents are the Arizona Highway Department, the Arizona Highway Commission, and individual members of each entity.

       Between November 1971 and May 1976 Pinetop paid under protest $19,114.59 in use fuel taxes and $14,701.42 in motor carrier license taxes. Since that time it has continued to pay taxes pending the outcome of this case. Refund litigation is pending in state court with respect to the five other non-Indian contractors employed by the Tribe, and that litigation has been stayed pending the outcome of this suit.

       For purposes of this action petitioners have conceded Pinetop’s liability for both motor carrier license and use fuel taxes attributable to travel on state highways within the reservation. Pinetop has maintained records of fuel attributable to travel on those highways, and computations would evidently be made in order to allocate a portion of the gross receipts taxable under the motor carrier license tax to state highways.

       When Pinetop contracted to undertake timber operations for FATCO in 1969, both Pinetop and FATCO believed that it would not be required to pay state-taxes. After respondents assessed the taxes at issue, FATCO agreed to pay them to avoid the loss of Pinetop’s services.

       After the trial court entered summary judgment on the issue of the applieabilhy of the state taxes, the case proceeded to trial on the state-law issue of the manner of calculating the motor vehicle license tax Final judgment was entered for respondents on all issues after trial. The Arizona Court of Appeals reversed the decision of the Superior Court on the calculation of the motor vehicle license tax. 120 Ariz. 282, 291, 585 P 2d 891, 900 (1978).

       The shift in approach is discussed in Williams v. Lee, 358 U. S. 217, 219 (1959): Organized Village of Kake v. Egan, 369 U. S. 60, 71-75 (1962); and McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164, 172 (1973).

       For example, the Indian Financing Act of 1974, 25 U. S. C. § 1451 et seq., states: “It is hereby declared to be the policy of Congress . . . to help develop and utilize Indian resources, both physical and human, to a point where the Indians will fully exercise responsibility for the utilization and management of their own resources and where they will enjoy a standard of living from their own productive efforts comparable to that enjoyed by non-Indians in neighboring communities.” Similar policies underlie the Indian Self-Determination and Education Assistance Act of 1975, 25 U. S. C. § 450 et seq., as well as the Indian Reorganization Act of 1934, 25 U. S. C. § 461 et seq., whose “intent and purpose . . . was 'to rehabilitate the Indian’s economic life and to give him a chance to develop the initiative destroyed by a century of oppression and paternalism.’” Mescalero Apache Tribe v. Jones, 411 U. S. 145, 152 (1973), quoting H. R. Rep. No. 1804, 73d Cong., 2d Sess., 6 (1934). See also Santa Clara Pueblo v. Martinez, 436 U. S. 49 (1978). Cf. Gross, Indian Self-Determination and Tribal Sovereignty: An Analysis of Recent Federal Policy, 56 TexasL. Rev. 1195 (1978).

       In the case of “Indians going beyond reservation boundaries,” however, a “nondiseriminatory state law” is generally applicable in the absence of “express federal law to the contrary.” Mescalero Apache Tribe v. Jones, supra, at 148-149.

       Federal policies with respect to tribal timber have a long history. In United States v. Cook, 19 Wall. 591 (1874), and Pine River Logging Co. v. United States, 186 U. S. 279 (1902), the Court held that tribal members had no right to sell timber on reservation land unless the sale was related to the improvement of the land. At the same time the Court interpreted the governing statute as designed “to permit deserving Indians, who had no other sufficient means of support, to cut... a limited quantity of . . . timber . . . and to use the proceeds for their support . . . , provided that 10 percent of the gross proceeds should go to the stumpage or poor fund of the tribe, from which the old, sick and otherwise helpless might be supported.” Id., at 285-286.
      The Attorney General interpreted the holding in Cook to mean that Indians had no right to reservation timber. See 19 Op. Atty. Gen. 194 (1888). This interpretation was overturned by Congress by Act of June 25, 1910, ch. 431, 36 Stat. 855, as amended, 25 U. S. C. § 407, and also repudiated in United States v. Shoshone Tribe, 304 U. S. Ill (1938). Thus, as the Court summarized in United States v. Algoma Lumber Co., 305 U. S. 415, 420 (1939), “[u]nder . . . established principles applicable to land reservations created for the benefit of the Indian tribes, the Indians are beneficial owners of the land and the timber standing upon it and of the proceeds of their sale, subject to the plenary power of control by the United States, to be exercised for the benefit and protection of the Indians.” See 25 U. S. C. § 196; United States v. Mitchell, 445 U. S. 535 (1980).

       Those factors include “(1) the state of growth of the timber and the need for maintaining the productive capacity of the land for the benefit of the owner and his heirs, (2) the highest and the best use of the land, including the advisability and practicality of devoting it to other uses for the benefit of the owner and his heirs, and (3) the present and future financial needs of the owner and his heirs.” 25 U. S. C. § 406 (a).

       In oral argument counsel for respondents appeared to concede that the asserted state taxes could not lawfully be applied to tribal roads and was unwilling to defend the contrary conclusion of the court below, which made no distinction between Bureau and tribal roads under state and federal law. Tr. of Oral Arg. 34-37. Contrary to respondents’ position throughout the litigation and in their brief in this Court, counsel limited his argument to a contention that the taxes could be asserted on the roads of the Bureau of Indian Affairs. Ibid. ' For purposes of federal pre-emption, however, we see no basis, and respondents point to none, for distinguishing between roads maintained by the Tribe and roads maintained by the Bureau of Indian Affairs.

       Of course, the fact that the economic burden of the tax falls on the Tribe does not by itself mean that the tax is pre-empted, as Moe v. Salish & Kootenai Tribes, 425 U. S. 463 (1976), makes clear. Our decision today is based on the pre-emptive effect of the comprehensive federal regulatory scheme, which, like that in Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685 (1965), leaves no room for the additional burdens sought to be imposed by state law.

       Respondents also contend that the taxes are authorized by the Buck Act, 4 U. S. C. § 105 et seq., and the Hayden-Cartwright Act, 4 U. S. C. § 104. In Warren Trading Post Co. v. Arizona Tax Comm’n, supra, at 691, n. 18, we squarely held that the Buck Act did not apply to Indian reservations, and respondents present no sufficient reason for us to depart from that holding. We agree with petitioners that the Hayden-Cartwright Act, which authorizes state taxes “on United States military or other reservations,” was not designed to overcome the otherwise pre-emptive effect of federal regulation of tribal timber. We need not reach the more general question whether the Hayden-Cartwright Act applies to Indian reservations at all.

       Under Arizona law, logging operations are exempt from the motor carrier license tax if the wood they haul is used for pulpwood. In this case 60% of the logs hauled by Pinetop were to be used for pulpwood.

       In paragraph XIII of their complaint, petitioners alleged:
      “There are four categories of roads in the Ft. Apache Indian Reservation which are used by the Plaintiffs in their logging operations: (1) tribal roads financed and maintained by the Indians exclusively; (2) federally funded (Bureau of Indian Affairs) roads serving recreational public needs; (3) state highways; and (4) logging roads built and maintained by loggers. In transporting timber from the woods to the sawmill, plaintiffs’ vehicles travel substantially over tribal and BIA roads, although short portions of many of the trips are on state highways.
      “The only category of roads on the Fort Apache Indian Reservation which are built or maintained by the State of Arizona, is category (3), state highways. Categories (1), (2), and (4) are financed and maintained by sources other than monies from the State of Arizona. Tribal, BIA and logging roads are not public highways within the meaning of Arizona Revised Statutes Sec. 40-601.9, and thus any use fuel and license motor carrier taxes on these roads are inappropriate.”

       At oral argument, the Assistant Attorney General of the State of Arizona stated:
      “But so long as' the road remained a private thoroughfare they would not be so traveled and use of those road [sic] would not be subject to the State tax.” Tr. of Oral Arg. 32.

        Later in the argument he was asked the following question and gave the following answer:
      "Mr. Macpherson, quite apart from the question in this case which involves Indian tribes, what about a private owner of land — whether it is the Weyerhauseur Company or a rancher who owns many square miles of ranch land, does Arizona impose a tax upon his fuel if the vehicle that he owns is used exclusively on his own private property 365 days a year, or this year 366, and never on the public roads of Arizona?
      “MR. MACPHERSON: It does not, Your Honor.” Id., at 39.

       With respect to tribal roads, the Assistant Attorney General advised the Court at oral argument:
      “However, the fact of the matter is that under current State law, under the legislative scheme that exists in Arizona right now, Arizona has no intention of going forward on some purported theory that because the Court of Appeals decision says we can, that we can go ahead and tax use on these tribal roads. I have been assured of that by my client by telephone last night. And other than that we would put that before the Court to apprise the court of what the true facts are.” Id., at 35.
      In rebuttal, counsel for petitioners expressed surprise at, but nevertheless accepted, the concession made by the State. Counsel stated:
      “My good friend, Mr. Macpherson, has just said some remarkable things.
      “I think I hear him saying that the State is no longer interested in collecting taxes from tribal roads on the reservation which are not Bureau of Indian Affairs roads. If that is what he said, then I am delighted to accept him accept his concession. But I must also correct some of the suggestions he has made.
      “His predecessor, the Attorney for the State of Arizona, argued in the State appellate courts that the State was claiming the right to tax tribal roads. The judgment of the lower court gives the State the right to tax tribal roads. And that is the judgment we are burdened with and that is the judgment which we bring to this Court.
      “Our opening briefs state that is the issue. Their briefs acknowledge that is the issue . . . and that was the issue before the Court.
      “Trial counsel, Mr. Beus who is here, informs me over the lunch period that his understanding was that administrative agreement included the payment of certain taxes allocable to tribal roads.
      "QUESTION: Well, as I say, that is of some importance, at least to me, whether there is an issue to taxes, either fuel or gross receipts taxes imposed on vehicles insofar as their use was confined to tribal roads.
      “Is there, or is there not a dispute?
      “MR. WAKE: I submit there was until Mr. Macpherson spoke.
      “QUESTION: Well, now you submit there isn’t. And I—
      “MR. WAKE: I submit there isn’t because [counsel] has conceded the issue or [is] withdrawing the issue. And perhaps he can clarify his remarks.
      “QUESTION: You say you accept it gladly.
      “MR. WAKE: I accept it gladly but—
      “QUESTION: You have won your case on the—
      “MR. WAKE: Your Honor, I would point out that that being the concession as I understand it, it would be appropriate in any event the judgment of the lower court to be correct in that regard since — ” Id., at 54^56.

       The following colloquy occurred at oral argument:
      “QUESTION: What I meant to say is your real fight is over the right to tax on BIA roads.
      “Does the record tell us much about those roads, for example does it tell us whether the State police are on those roads or whether they have speed limits or things like that?
      “MR. MACPHERSON: Your Honor, the record does not specifically go into that much detail.
      “QUESTION: However, it presents us with a hypothetical case quite different from the one you asked us to decide.
      “MR. MACPHERSON: Well, Mr. Justice Stevens, the case is — we felt it necessary as an ethical consideration to apprise the Court of what the actual situation is.
      “But, having said that, the issue, the legal issue, if it please the Court, may still be decided with respect to the BIA road use. The fact of the matter is that BIA roads pursuant to Federal — the Code of Federal Regulations are required to be open to free public use, as a matter of Federal law.” Id., at 36-37.

       “QUESTION: Did I understand you to say that Arizona has no responsibility for maintaining the BIA roads?
      “MR. MACPHERSON: This is correct, Your Honor.
      “QUESTION: And did it contribute to the construction of those roads?
      “MR. MACPHERSON: So far as the record shows, it did not, Your Honor.
      “QUESTION: And no police responsibility, either?
      “MR. MACPHERSON: That is correct, Your Honor. . . Id., at 41-42.

       The Due Process Clause may prohibit a State from imposing a tax on the use of completely private roads if the tax is designed to reimburse it for use of state-owned roads. Or it may be that once the State has decided to exempt private roads from its taxing system, it is also required, as a matter of equal protection, to exempt other types of roads that are identical to private roads in all relevant respects.

       The parties have not told us what portion of the taxes is attributable to the use of each of the various types of roads. Thus, we cannot determine how much tax Pinetop would be required to pay for its use of BIA roads.


source: Caselaw Access Project

author: Mb. Justice Marshall Mr. Justice Stewart, Mr. Justice Powell,

license: Public Domain

text:
    CENTRAL MACHINERY CO. v. ARIZONA STATE TAX COMMISSION
    No. 78-1604.
    Argued January 14, 1980
    Decided June 27, 1980
    Marshall, J., delivered the opinion of the Court, in which Burger, C. J., and BreNNan, White, and BlackmüN, JJ., joined. Stewart, J., filed a dissenting opinion, in which Powell, Rehnquist, and Stevens, JJ., joined, post, p. 166. Powell, J., filed a dissenting opinion, post, p. 170.

      Rodney B. Lewis argued the cause for appellant. With him on the briefs were Richard B. Collins, Jeanne S. Whiteing, and Z. Simpson Cox.

      Ian A. Macpherson, Assistant Attorney General of Arizona, argued the cause for appellee. With him on the brief was Robert K. Corbin, Attorney General.

      Deputy Solicitor General Claiborne argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General McCree, Assistant Attorney General Moorman, and Robert L. Klarquist.

   Mb. Justice Marshall

delivered the opinion of the Court.

This case presents the question whether a State may tax the sale of farm machinery to an Indian tribe when the sale took place on an Indian reservation and was made by a corporation that did not reside on the reservation and was not licensed to trade with Indians.

Appellant is a corporation chartered by and doing business in Arizona. In 1973 it sold 11 farm tractors to Gila River Farms, an enterprise of the Gila River Indian Tribe. The Tribe is federally recognized and is governed by a constitution adopted pursuant to the Indian Reorganization Act, 25 U. S. C. § 476. Gila River Farms conducts farming operations on tribal and individual trust land within the Gila River Reservation, which was established in Arizona by the Act of Feb. 28, 1859, ch. 66, 11 Stat. 388, 401.

Appellant’s salesman solicited the sale of these tractors on the reservation, the contract was made there, and payment for and delivery of the tractors also took place there. Appellant does not have a permanent place of business on the reservation, and it is not licensed under 25 U. S. C. §§ 261-264 and 25 CFR Part 251 (1979) to engage in trade with Indians on reservations. The transaction was approved, however, by the Bureau of Indian Affairs.

The State of Arizona imposes a “transaction privilege tax” on the privilege of doing business in the State. Ariz. Rev. Stat. Ann. §§42-1309, 42-1312, 42-1361 (Supp. 1979). The tax amounts to a percentage of the gross receipts of the taxable entity. The tax is assessed against the seller of goods, not against the purchaser. In this case, appellant added the amount of this tax — $2,916.62 — as a separate item to the price of the tractors, thereby increasing by that amount the total purchase price paid by Gila River Farms. Appellant paid this tax to the State under protest and instituted state administrative proceedings to claim a refund. The administrative claim was denied, and appellant then filed this action in state court, contending that federal regulation of Indian trading pre-empted application of the state tax to the transaction in question. The Superior Court for Maricopa County held that the State had no jurisdiction to tax the transaction, and accordingly it ordered a refund. The Supreme Court of Arizona reversed. State v. Central Machinery Co., 121 Ariz. 183, 589 P. 2d 426 (1978).

We noted probable jurisdiction, 444 U. S. 822 (1979), and now reverse.

II

In 1790, Congress passed a statute regulating the licensing of Indian traders. Act of July 22, 1790, ch. 33, 1 Stat. 137. Ever since that time, the Federal Government has comprehensively regulated trade with Indians to prevent “fraud and imposition” upon them. H. R. Rep. No. 474, 23d Cong., 1st Sess., 11 (1834) (Committee Report with respect to Indian Trade and Intercourse Act of 1834, ch. 161, 4 Stat. 729). In the current regulatory scheme, the Commissioner of Indian Affairs has “the sole power and authority to appoint traders to the Indian tribes and to make .. . rules and regulations . . . specifying the kind and quantity of goods and the prices at which such goods shall be sold to the Indians.” 25 U. S. C. § 261. All persons desiring to trade with Indians are subject to the Commissioner's authority. 25 U. S. C. § 262. The President is authorized to prohibit the introduction of any article into Indian land. 25 U. S. C. § 263. Penalties are provided for unlicensed trading, introduction of goods, or residence on a reservation for the purpose of trade. 25 U. S. C. § 264. The Commissioner has promulgated detailed regulations to implement these statutes. 25 CFR Part 251 (1979).

In Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685 (1965), the Court unanimously held that these “apparently all-inclusive regulations and the statutes authorizing them,” id., at 690, prohibited the State of Arizona from imposing precisely the same tax as is at issue in the present case on the operator of a federally licensed retail trading post located on a reservation. We determined that these regulations and statutes are “in themselves sufficient to show that Congress has taken the business of Indian trading on reservations so fully in hand that no room remains for state laws imposing additional burdens upon traders.” Ibid. We noted that the Tribe had been left “largely free to run the reservation and its affairs without state control, a policy which has automatically relieved Arizona of all burdens for carrying on those same responsibilities.” Ibid. See White Mountain Apache Tribe v. Bracker, ante, at 152.

There are only two distinctions between Warren Trading Post, supra, and the present case: appellant is not a licensed Indian trader, and it does not have a permanent place of business on the reservation. The Supreme Court of Arizona concluded that these distinctions indicated that federal law did not bar imposing the transaction privilege tax on appellant. We disagree.

The contract of sale involved in the present case was executed on the Gila River Reservation, and delivery and payment were effected there. Under the Indian trader statutes, 25 U. S. C. §§ 261-264, this transaction is plainly subject to federal regulation. It is irrelevant that appellant is not a licensed Indian trader. Indeed, the transaction falls squarely within the language of 25 U. S. C. § 264, which makes it a criminal offense for “[a]ny person ... to introduce goods, or to trade” without a license “in the Indian country, or on any Indian reservation.” It is the existence of the Indian trader statutes, then, and not their administration, that pre-empts the field of transactions with Indians occurring on reservations.

Nor is it relevant that appellant did not maintain a permanent place of business on the reservation. The Indian trader statutes and their implementing regulations apply no less to a nonresident person who sells goods to Indians on a reservation than they do to a resident trader. See 25 U. S. C. § 262 (“[a]ny person desiring to trade with the Indians on any Indian reservation” subject to regulatory authority of Commissioner of Indian Affairs); 25 U. S. C. § 263 (“President is authorized ... to prohibit the introduction of goods . . . into the country belonging to any Indian tribe”); 25 U. S. C. § 264 (making it an offense for “[a]ny person” to introduce goods or to trade on a reservation without a license). Indeed, an implementing regulation expressly provides for the licensing of “itinerant peddlers,” 25 CFR §251.9 (b) (1979), who are by definition nonresidents, see 25 CFR § 252.3 (i) (1979). One of the fundamental purposes of these statutes and regulations — to protect Indians from becoming victims of fraud in dealings with persons selling goods — would be easily circumvented if a seller could avoid federal regulation simply by failing to adopt a permanent place of business on a reservation or by failing to obtain a federal license.

Since the transaction in the present case is governed by the Indian trader statutes, federal law pre-empts the asserted state tax. As we held in Warren Trading Post, supra, at 691, n. 18, by enacting these statutes Congress “has undertaken to regulate reservation trading in such a comprehensive way that there is no room for the States to legislate on the subject.” It may be that in light of modem conditions the State of Arizona should be allowed to tax transactions such as the one involved in this case. Until Congress repeals or amends the Indian trader statutes, however, we must give them “a sweep as broad as [their] language,” United States v. Price, 383 U. S. 787, 801 (1966), and interpret them in light of the intent of the Congress that enacted them, see Wilson v. Omaha Indian Tribe, 442 U. S. 653, 666 (1979); Oliphant v. Suquamish Indian Tribe, 435 U. S. 191, 206 (1978).

The decision of the Supreme Court of Arizona is

Reversed.

Mr. Justice Stewart,

with whom Mr. Justice Powell, Mr. Justice Rehnquist, and Mr. Justice Stevens join, dissenting.

The question before us is whether the appellant is immune from a state tax imposed on the proceeds of the sale by it of farm machinery to an Indian tribe. The Court concludes that an affirmative answer is required by the rationale of Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685, a case that is similar in some respects to this one. While I agree that Warren Trading Post states the relevant legal principles, I cannot agree that those principles lead to the result reached by the Court in this case. Accordingly, I dissent.

In Warren Trading Post, the Court held that the State of Arizona may not impose the same tax involved here on the operator of a federally licensed retail trading business located on an Indian reservation. The Court determined that the “apparently all-inclusive [federal] regulations and the statutes authorizing them,” id., at 690, under which the trader in that case had been licensed, were “in themselves sufficient to show that Congress has taken the business of trading on reservations so fully in hand that no room remains for state laws imposing additional burdens on traders,” ibid.

As the Court recognizes, the circumstances of this case differ from those presented by Warren Trading Post. Specifically, the appellant here is not a licensed Indian trader and does not have a permanent place of business on the reservation. See ante, at 164. The Court considers these differences immaterial, however, apparently because, as it reads the relevant statutes, the appellant could have been subjected to regulation somewhat like that in Warren Trading Post, though in fact it was not. Thus the Court relies on 25 U. S. C. § 264, which makes it unlawful for “[a]ny person .. . to introduce goods, or to trade” without a license “in the Indian country, or on any Indian reservation.”

Even assuming that the Court correctly reads the statutory language to reach anybody who sells goods “on any Indian reservation,” I cannot understand why the Court ascribes to that fact the significance that it does. The question, after all, is not whether the appellant may be required to have a license, but rather, as the Arizona Supreme Court correctly believed, whether the state tax “runs afoul of any congressional enactments” dealing with the affairs of reservation Indians, State v. Central Machinery Co., 121 Ariz. 183, 184, 589 P. 2d 426, 427 (1978). This Court has consistently recognized that “ ‘[e]nactments of the federal government passed to protect and guard its Indian wards only affect the operation, within the [reservation,] of such state laws as conflict with the federal enactments,’ ” Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 483, quoting United States v. McGowan, 302 U. S. 535, 539. With regard to the determinative issue whether Arizona’s tax in this case is inconsistent with federal law, the Court says only that “[i]t is the existence of the Indian trader statutes . . . that pre-empts the field of transactions with Indians occurring on reservations,” ante, at 165, and that those statutes must be given “ 'a sweep as broad as [their] language,’ ” ante, at 166, quoting United States v. Price, 383 U. S. 787, 801.

But the rationale of the decision in Warren Trading Post, supra, was not so simple as this. The grounds of that decision were twofold. First, as the Court today reiterates, a tax on the gross income of a licensed trader residing on the reservation could “disturb and disarrange the statutory plan Congress set up in order to protect Indians against prices deemed unfair or unreasonable,” id., at 691. Second, the Court saw in that case no governmental justification to support the State’s “put[ting] financial burdens on [the trader] or the Indians with whom it deals in addition to those Congress or the tribes have prescribed,” ibid. Because Congress for nearly a century had “left the Indians . . . free to run the reservation and its affairs without state control,” Arizona had been “automatically relieved ... of all burdens for carrying on those same responsibilities,” id., at 690. That being so, the Court did not “believe that Congress intended to leave to the State the privilege of levying this tax,” id., at 691.

Neither of these considerations is present here. First, although the appellant was obliged to obtain federal approval of the sale transaction in this case, see 25 U. S. C. §§ 262, 264, it was not subjected to the much more comprehensive regulation that governs licensed traders engaged in a continuous course of dealing with reservation Indians. See 25 CFR Part 251 (1979). In these circumstances, the Court’s expressed belief that the minimal regulation to which the appellant was subject “leaves no room” for the state tax in this case strikes me as hyperbolic. Even were the appellant administratively required to possess a license, taxation of an isolated sale by it to the Indians simply would not jeopardize those federal and tribal interests involved in the thorough regulation of on-reservation merchants trading continuously with the Indians — the situation dealt with in Warren Trading Post. There the financial burdens of state taxation would have impaired the Commissioner’s ability to prescribe “the kind and quantity of goods and the prices at which such goods shall be sold to the Indians,” 25 U. S. C. § 261, and might have threatened the very existence of the resident trader’s enterprise, on which the tribe depended for its essential commerce. No similar risks exist in a case such as this one, involving an isolated sales transaction. The viability of the seller may be assumed from its willingness to trade, and the reasonableness of the terms of sale may be guaranteed, as they were in this case, by the Commissioner’s review of them. It is true that the prices paid by the Indians might be lower if the appellant is immune from the tax. But that is hardly relevant. The Court has on more than one occasion sustained state taxation of transactions occurring on Indian reservations, notwithstanding the fact that the economic burden of the tax fell indirectly on the Indian tribe or its members. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 151, 156-157; Moe v. Salish & Kootenai Tribes, supra. Cf. Mescalero Apache Tribe v. Jones, 411 U. S. 145, 148.

Second, the Court inexplicably ignores the State’s wholly legitimate purpose in taxing the appellant, a corporation that does business within the State at large and presumably derives substantial benefits from the services provided by the State at taxpayer’s expense. Aside from entering the reservation to solicit and execute the contract of sale and to receive payment, circumstances that are certain to characterize all sales to reservation Indians after today’s decision, the appellant conducts its affairs in all respects like any other business to which the State’s nondiscriminatory tax con-cededly applies. Thus, quite unlike the circumstances in Warren Trading Post, the State in this case has not been relieved of all duties or responsibilities respecting the business it would tax. Yet, despite the settled teaching of the Court’s decisions in this area that every relevant state interest is to be given weight, see Washington v. Confederated Tribes of Colville Indian Reservation, supra; McClanahan v. Arizona State Tax Comm’n, 411 U. S. 164, 171; cf. White Mountain Apache Tribe v. Bracker, ante, at 144, the Court does not even consider the State’s valid governmental justification for taxing the transaction here involved.

It is important to recognize the limits inherent in the principles of federal pre-emption on which the Warren Trading Post decision rests. Those limits make necessary in every case such as this a careful inquiry into pertinent federal, tribal, and state interests, without which a rational accommodation of those interests is not possible. Had such an inquiry been made in this case, I am convinced the Court could not have concluded that Arizona’s exercise of the sovereign power to tax its non-Indian citizens had been pre-empted by federal law.

Mr. Justice Powell,

dissenting in No. 78-1604 (ante, p. 160) and concurring in No. 78-1177 (ante, p. 136).

I write separately because I would distinguish Central Machinery Co. v. Arizona State Tax Comm’n, ante, p 160. from White Mountain Apache Tribe v. Bracker, ante, p. 136. I agree with the Court that a non-Indian contractor continuously engaged in logging upon a reservation is subject to such pervasive federal regulation as to bring into play the preemption doctrine of Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U. S. 685 (1965). But Warren Trading Post simply does not apply to routine state taxation of a non-Indian corporation that makes a single sale to reservation Indians. I therefore join the Court’s opinion in White Mountain Apache Tribe, but I dissent from it® decision in Central Machinery.

I

Central Machinery

Warren Trading Post held that Arizona could not levy its transaction privilege tax against a company regularly engaged in retail trading with the Indians upon a reservation. The company operated under a federal license, and it was subject to the federal regulatory scheme authorized by 25 U. S. C. §§ 261-264. “These apparently all-inclusive regulations,” the Court concluded, “show that Congress has taken the business of Indian trading on reservations so fully in hand that no room remains for state laws imposing additional burdens upon traders.” 380 U. S., at 690.

The Court today is too much persuaded by the superficial similarity between Warren Trading Post and Central Machinery. The Court mistakenly concludes that a company having no license to trade with the Indians and no place of business within a reservation is engaged in “the business of Indian trading on reservations. . . .” 380 U. S., at 690. Although “[a]ny person” desiring to sell goods to Indians inside a reservation, must secure federal approval, see 25 U. S. C. §§ 262, 264, the federal regulations — and the facts of this case — show that a person who makes a single approved sale need not become a fully regulated Indian trader. Even itinerant peddlers who engage in a pattern of selling within a reservation are merely “considered as traders” for purposes of the licensing requirement. 25 CFR § 251.9 (b) (1979). “The business of a licensed trader,” in fact, “must be managed by the bonded principal, who must habitually reside upon the reservation. . . .” 25 CFR §251.14 (1979). Since Warren Trading Post involved a resident trader subject to the complete range of federal regulation, the Court had no occasion to consider whether federal regulation also pre-empts state taxation of a seller who enters a reservation to make a single transaction.

Our most recent cases undermine the notion that 25 U. S. C. §§ 261-264 occupy the field so as to pre-empt all state regulation affecting licensed Indian traders. The unanimous Court in Moe v. Salish & Kootenai Tribes, 425 U. S. 463, 481-483 (1976), concluded that a State could require tribal retailers to prepay a tax validly imposed on non-Indian customers. Rejecting an argument based on Warren Trading Post, the Court concluded that federal laws “ 'passed to protect and guard [the Indians] only affect the operation, within the [reservation], of such state laws as conflict with the federal enactments.’ ” 425 U. S., at 483, quoting United States v. McGowan, 302 U. S. 535, 539 (1938). In Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 159-160 (1980), the Court holds that a State can require licensed traders to keep detailed tax records of their sales to both Indians and non-Indians. Cf. Confederated Tribes v. Washington, 446 F. Supp. 1339, 1347, 1358-1359 (ED Wash. 1978) (three-judge court).

Finally, unlike taxes imposed upon an Indian trader engaged in a continuous course of dealing within the reservation, the tax assessed against Central Machinery does not “to a substantial extent frustrate the evident congressional purpose of ensuring that no burden shall be imposed upon Indian traders for trading with Indians . . . except as authorized by Acts of Congress or by valid regulations promulgated under those Acts.” Warren Trading Post, supra, at 691. In this case, the Bureau of Indian Affairs approved all aspects of the only sale Central Machinery made to the Gila River Indian Tribe. The contract price approved by the Bureau included costs attributable to the very tax that Central Machinery now seeks to recover. Ante, at 161-162. Thus, the State’s tax did not interfere with “the statutory plan Congress set up in order to protect Indians against prices deemed unfair or unreasonable. . . .” Warren Trading Post, supra, at 691. Since a seller not licensed to trade with the Indians must secure specific federal approval for each isolated transaction, there is no danger that ordinary state business taxes upon the seller will impair the Bureau’s ability to prevent fraudulent or excessive pricing. To hold the seller immune from state taxes otherwise due upon a single transaction with the Indians gives the non-Indian seller a windfall or the Indian buyer an unwarranted advantage over all others who deal with the seller.

II

White Mountain Apache Tribe

White Mountain Apache Tribe presents a different situation. Petitioner Pinetop Logging Co. operates solely and continuously upon an Indian reservation under its contract with a tribal enterprise. Pinetop’s daily operations are controlled by a comprehensive federal regulatory scheme designed to assure the Indian tribes the greatest possible return from their timber. Federal officials direct Pinetop’s hauling operations down to such details as choice of equipment, selection of routes, speeds of travel, and dimensions of the loads. Ante, at 146-148. Pinetop does all of the hauling at issue in this case over roads constructed, maintained, and regulated by the White Mountain Apache Tribe and the Bureau of Indian Affairs. The Bureau requires the Tribe and its contractors to repair existing roads and to construct new roads necessary for sustained logging. Pinetop exhausts a large percentage of its gross income in performing these contractual obligations. Ante, at 148.

Since the Federal Government, the Tribe, and its contractors are solely responsible for the roads that Pinetop uses, I “cannot believe that Congress intended to leave to the State the privilege of levying” road use taxes upon Pinetop’s operations. See Warren Trading Post, 380 U. S., at 691. The State has no interest in raising revenues from the use of Indian roads that cost it nothing and over which it exercises no control. See Washington v. Confederated Tribes, supra, at 162-164. The addition of these taxes to the road construction and repair expenses that Pinetop already bears also would interfere with the federal scheme for maintaining roads essential to successful Indian timbering. See 380 U. S., at 691. The Tribe or its contractors would pay twice for use of the same roads. This double exaction could force federal officials to reallocate work from non-Indian contractors to the tribal enterprise itself or to make costly concessions to the contractors. I therefore join the Court in concluding that this case “is in all relevant respects indistinguishable from Warren Trading Post.” Ante, at 153.

       At the time of the transaction in question, Ariz. Rev. Stat. Ann. §42-1309 (Supp. 1979) provided:
      “A. There is levied and there shall be collected . . . privilege taxes measured by the amount or volume of business transacted by persons on account of their business activities, and in the amounts to be determined by the application of rates against values, gross proceeds of sales, or gross income, as the case may be, in accordance with the schedule as set forth in §§ 42-1310 through 42-1315.”
      At the time of the transaction, Ariz. Rev. Stat. Ann. § 42-1312 (Supp. 1979) provided:
      “A. The tax imposed by subsection A of § 42-1309 shall be levied and collected at an amount equal to two per cent of the gross proceeds of sales or gross income from the business upon every person engaging or continuing within this state in the business of selling any tangible personal property whatever at retail. . . .”
      At the time of the transaction, Ariz. Rev. Stat. Ann. § 42-1361 (Supp. 1973) provided:
      “A. There is levied and shall be collected by the department of revenue a tax:
      “1. On the privilege of doing business in this state, measured by the amount or volume of business transacted by persons on account of their business activities, and in the amounts to be determined by the application, against values, gross proceeds of sales, or gross income, as the case may be, in accordance with the provisions and schedules as set forth in [§42-1301 et seq.], at rates equal to fifty per cent of the rates imposed in such article.” 1973 Ariz. Sess. Laws, ch. 123, § 117.

       It is stipulated that appellant will pay over any tax refund to Gila River Farms.

       It is irrelevant that the sale was made to a tribal enterprise rather than to the Tribe itself. See Mescalero Apache Tribe v. Jones, 411 U. S. 145, 157, n. 13 (1973). Nor may appellee distinguish the present case from Warren Trading Post by contending that the tax at issue in this case falls upon the seller of goods and not the buyer because it is a tax on the privilege of doing business in Arizona rather than a Sales tax. The tax at issue in the present case is precisely the same tax as was involved in Warren Trading Post. The argument made by appellee in the present case was used by the Supreme Court of Arizona in Warren Trading Post to uphold imposition of the tax. Warren Trading Post Co. v. Moore, 95 Ariz. 110, 387 P. 2d 809 (1963). Our reversal of that decision recognized that, regardless of the label placed upon this tax, its imposition as to on-reservation sales to Indians could “disturb and disarrange the statutory plan Congress set up in order to protect Indians against prices deemed unfair or unreasonable by the Indian Commission.” 380 U. S., at 691. See id., at 686, and n. 1.

       In any event, it should be recognized that the transaction at issue in this case was subjected to comprehensive federal regulation. Although appellant was not licensed to engage in trading with Indians, the Bureau of Indian Affairs had approved both the contract of sale for the tractors in question and the tribal budget, which allocated money for the purchase of this machinery.

       We decline appellee’s invitation to re-examine our conclusion in Warren Trading Post, 380 U. S., at 691, n. 18, that the Buck Act, 4 U. S. C. §§ 105-110, does not permit States to tax transactions on Indian reservations.

       As Mr. Justice Powell observes in his dissenting opinion, post, at 172, the Court in Moe v. Salish & Kootenai Tribes rejected the contention that the Indian trader statutes occupy the field so completely as to pre-empt all state laws affecting those who trade on the reservation with reservation Indians.

       The Court’s construction of the trader statutes, in fact, sweeps far more broadly than their language, no portion of which indicates a congressional intention to immunize anybody from state taxation.

       “The State also has a legitimate governmental interest in raising revenues, and that interest is likewise strongest when the tax is directed at [economic value created off of the reservation] and when the taxpayer is the recipient of state services.” Washington v. Confederated Tribes of Colville Indian Reservation, 447 U. S. 134, 157,

       The regulation dealing with itinerant peddlers was promulgated after the decision in Warren Trading Post. See 30 Fed. Reg. 8267 (1965). Thus, the regulations before the Court in Warren Trading Post required all licensed Indian traders to conduct their businesses under the management of a habitual resident upon the reservation. 25 CFR § 251.14 (1958),

       At oral argument, counsel for Central Machinery conceded that the State could have taxed the transaction in question if it had been completed at the firm’s usual place of business. Tr. of Oral Arg. 7. Thus, Central Machinery’s argument reduces to the proposition that the locus of the transaction is dispositive. Quite apart from the opportunities for tax evasion that it creates, this position is unsound. Persons who make an unauthorized sale to Indians upon a reservation can be prosecuted. 25 U. S. C. § 264; see United States ex rel. Hornell v. One 1976 Chevrolet Station Wagon, 585 F. 2d 978 (CA10 1978). But that certainly does not prove that all persons who make an authorized sale are subject to the pervasive regulation considered in Warren Trading Post.

       The motor carrier license tax imposed by Ariz. Rev. Stat. Ann. § 40-641 (Supp. 1979) is a tax on the privilege of engaging in a business that makes inordinate use of public roads. See Purolator Security, Inc. v. Thorneycroft, 116 Ariz. 394, 396-397, 569 P. 2d 824, 820-827 (1977) ; Campbell v. Commonwealth Plan, Inc., 101 Ariz. 554, 557, 422 P. 2d 118, 121 (1966). All revenues from this tax are earmarked for maintenance and improvement of the State’s highways. Ariz. Rev. Stat. Aim. §40-641 (C) (Supp. 1979). The fuel use excise tax imposed by Ariz. Rev. Stat. Ann. §28-1551 (Supp. 1979) is “for the purpose of partially compensating the state for the use of its highways.” § 28-1552 (Supp. 1979).