States May Tax Firms on Indian Reservation Oil, Justices Rule
The Supreme Court ruled today that states may tax companies for oil and gas taken from Indian reservations.
Voting 6 to 3, the justices handed Western states an important victory in upholding a New Mexico tax on oil and gas taken from the Jicarilla Apache reservation there.
The court said the state levy does not trample on Indian rights and is not unfair to a petroleum company--even though the company must pay taxes to both the state and the tribe.
The court rejected arguments that the state tax interferes with tribal economic development by prompting producers to look off Indian reservations for mineral deposits.
New Mexico officials told the court that the dispute is of great concern in the West. They said there are more than 150 cases of companies with deposits on Indian land protesting such double taxation in Arizona, New Mexico, Montana and Utah.
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