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Oklahoma Tax Comm'n v. Sac & Fox Nation - 508 U.S. 114

Rule:

The presumption against state taxing authority applies to all Indian country, and not just formal reservations.

Facts:

Petitioner Sac & Fox Nation, a federally recognized Indian tribe, sought to avoid state income taxes and motor vehicle taxes that Respondent, Oklahoma State Tax Commission, had attempted to impose. The district court ruled that the members of the tribe could not be subject to such taxes based on a prior opinion, which held that a state could not subject a tribal member living on the reservation whose income derived from reservation sources to a state income tax absent express authorization from Congress.  On appeal, the ruling was affirmed. Both parties sought certiorari review in the United States Supreme Court.

Issue:

Are the members of the Indian tribes exempt from taxes?

Answer:

Yes.

Conclusion:

Absent explicit congressional direction to the contrary, a state presumably lacked jurisdiction to tax within Indian country, whether the particular territory consisted of a formal or informal reservation, allotted lands, or dependent Indian communities. However, the United States Supreme Court vacated and remanded for further proceedings because the lower courts had failed to determine whether the tribal members lived in Indian country.

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