Wagnon v. Prairie Band Potawatomi Nation
Issues
Whether a state motor fuels tax that is "imposed on the use, sale, or delivery" of motor fuel may be imposed on motor fuel that a non-Indian, off-reservation distributor delivers and sells directly to an Indian Tribe at its on-reservation service station.
The 1995 amendment to the Kansas Motor Fuel Tax Act allowed the Kansas Department of Revenue to collect a tax on motor fuel distributed to Indian lands. The Prairie Band of the Potawatomi Nation sought to enjoin the State from collecting the tax, claiming that the tax was pre-empted by federal law and that it impermissibly infringed on the Potawatomi Nation's rights of self-government. As prescribed by White Mountain Apache Tribe v. Bracker, either claim can be resolved by an interest-balancing test that considers (1) whether the tax revenue derives from value generated on- or off-reservation, and (2) whether the taxpayer benefits from tribal or state services. The Court will determine whether states can impose a tax which indirectly, but almost certainly, affects enterprises that take place on Indian reservations.
Questions as Framed for the Court by the Parties
- When a State taxes the receipt of fuel by non-tribal distributors, manufacturers and importers, and such receipt occurs off-reservation, does the interest-balancing test in White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), apply because the fuel is later sold by a tribe to final consumers?
- Should the Court abandon the White Mountain Apache interest-balancing test in favor of a preemption analysis based on the principle that Indian immunities are dependent upon congressional intent?
- Did the court of appeals err in applying the White Mountain Apache interest balancing test by, inter alia, placing dispositive weight on the fact that a tribally-owned gas station derives income from largely non-tribal patrons of the tribe's nearby casino?
The Prairie Band of the Potawatomi Nation ("the Nation") is a federally-recognized Indian tribe located on United States trust land in Jackson County, Kansas. Prairie Band Potawatomi v. Richards, 379 F.3d 979, 981 (10th Cir. 2004) (" Potawatomi II ").