Wagnon v. Prairie Band Potawatomi Nation, 546 U.S. 95 (2005)
Primary Holding
The application of the Kansas motor fuel tax to fuel received by non-Indian distributors, which is subsequently delivered to a gas station on the Prairie Band Potawatomi Nation's reservation, does not violate the Nation's sovereignty because the tax arises from a transaction that occurs off the reservation, and thus the Bracker interest-balancing test does not apply.
In the case of Wagnon v. Prairie Band Potawatomi Nation, the Supreme Court decided that Kansas could impose a fuel tax on non-Indian distributors who deliver fuel to a gas station on the Potawatomi Nation's reservation. This is important because it clarifies that states can tax transactions that happen outside of a reservation, even if the fuel ends up on tribal land. For consumers, this means that while they may pay taxes on fuel sold at tribal gas stations, the tax system is designed to ensure fairness and accountability in how fuel prices are set, helping to protect their rights as consumers. This case is relevant if you are buying fuel from a gas station on a reservation and want to understand how taxes might affect the price you pay.
AI-generated plain-language summary to help you understand this case
In Wagnon v. Prairie Band Potawatomi Nation, the underlying dispute arose from the State of Kansas imposing a tax on motor fuel received by fuel distributors within its borders. This tax was applied to fuel delivered by non-Indian distributors to a gas station owned by the Prairie Band Potawatomi Nation, which is located on its reservation in Jackson County, Kansas. The Nation contended that this tax infringed upon its sovereignty, as it believed that the application of the Kansas motor fuel tax to transactions involving fuel delivered to the reservation was impermissible. The gas station, which primarily serves casino patrons, was constructed to accommodate traffic related to the Nation's casino operations. The procedural history of the case began when the Nation filed a lawsuit in Federal District Court seeking declaratory judgment and injunctive relief against the State's collection of the motor fuel tax from distributors delivering fuel to the reservation. The District Court ruled in favor of the State, applying the interest-balancing test from the precedent case White Mountain Apache Tribe v. Bracker. The court concluded that the interests of the state outweighed those of the federal and tribal interests because the tax's legal incidence was directed at the off-reservation fuel distributors. The case eventually reached the Supreme Court of the United States on a writ of certiorari to the Tenth Circuit Court of Appeals, which had previously sided with the Nation, holding that the application of the Kansas tax was invalid under the Bracker test. However, the Supreme Court reversed this decision, clarifying that the Bracker test applies only when a state asserts authority over non-Indians engaging in activities on the reservation, and not when a state tax is imposed on a non-Indian transaction occurring off the reservation.
Whether the State of Kansas can impose a motor fuel tax on non-Indian distributors for fuel delivered to a gas station located on the reservation of the Prairie Band Potawatomi Nation, in light of the Nation's claim of sovereignty.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- October 3, 2005
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Thomas
- Damages Awarded
- N/A
- Data Quality
- high
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Consumer LostThe tribal court did not have jurisdiction to adjudicate a discrimination claim concerning the sale of fee land owned by a non-Indian bank to non-Indian individuals, as the sale did not involve a matter of tribal law or governance.
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Consumer LostThe Oneida Indian Nation cannot unilaterally revive its ancient sovereignty over lands purchased in an open market, as they have long relinquished governmental authority, and such a revival would disrupt the established governance of local municipalities.
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Consumer WonThe Government's promises to pay contract support costs to Indian tribes under the Indian Self-Determination and Education Assistance Act are legally binding, even if Congress did not appropriate sufficient funds for those costs.
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Consumer WonThe Due Process and Commerce Clauses prohibit states from taxing "extraterritorial values," but a state may tax an apportioned share of the value generated by the intrastate and extrastate activities of a multistate enterprise if those activities constitute a "unitary business.