[ Thomas ]
[ Ginsburg ]
JOAN WAGNON, SECRETARY, KANSAS
MENT OF REVENUE, PETITIONER v.
BAND POTAWATOMI NATION
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
[December 6, 2005]
Justice Thomas delivered the opinion of the Court.
The State of Kansas imposes a tax on the receipt of motor fuel by fuel distributors within its boundaries. Kansas applies that tax to motor fuel received by non-Indian fuel distributors who subsequently deliver that fuel to a gas station owned by, and located on, the Reservation of the Prairie Band Potawatomi Nation (Nation). The Nation maintains that this application of the Kansas motor fuel tax is an impermissible affront to its sovereignty. The Court of Appeals agreed, holding that the application of the Kansas tax to fuel received by a non-Indian distributor, but subsequently delivered to the Nation, was invalid under the interest-balancing test set forth in White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980). But the Bracker interest-balancing test applies only where a State asserts authority over the conduct of non-Indians engaging in activity on the reservation. Id., at 144. It does not apply where, as here, a state tax is imposed on a non-Indian and arises as a result of a transaction that occurs off the reservation. Accordingly, we reverse.
The Nation is a federally recognized Indian Tribe whose reservation is on United States trust land in Jackson County, Kansas. The Nation owns and operates a casino on its reservation. In order to accommodate casino patrons and other reservation-related traffic, the Nation constructed, and now owns and operates, a gas station on its reservation next to the casino. Seventy-three percent of the stations fuel sales are made to casino patrons, while 11 percent of the stations fuel sales are made to persons who live or work on the reservation. The Nation purchases fuel for its gas station from non-Indian distributors located off its reservation. Those distributors pay a state fuel tax on their initial receipt of motor fuel, Kan. Stat. Ann. §793408 (2003 Cum. Supp.),1 and pass along the cost of that tax to their customers, including the Nation.2
The Nation sells its fuel within 2
cents per gallon of the prevailing market price. Prairie
Band Potawatomi Nation v. Richards, 379 F.3d 979,
982 (CA10 2004). It does so notwithstanding the
distributors decision to pass along the cost of the
States fuel tax to the Nation, and the Nations
decision to impose its own tax on the stations fuel sales
in the amount of 16 cents per gallon of gasoline and 18 cents
per gallon of diesel (increased to 20 cents for gasoline and 22
cents for diesel in January 2003). Id., at 982. The
Nations fuel tax generates approximately $300,000
annually, funds that the Nation uses for
The Nation brought an action in Federal District Court for declaratory judgment and injunctive relief from the States collection of motor fuel tax from distributors who deliver fuel to the reservation. The District Court granted summary judgment in favor of the State. Applying the Bracker interest-balancing test, it determined that the balance of state, federal, and tribal interests tilted in favor of the State. The court reached this determination because it is undisputed that the legal incidence of the tax is directed off-reservation at the fuel distributors, Prairie Band Potawatomi Nation v. Richards, 241 F. Supp. 2d 1295, 1311 (Kan. 2003), and because the ultimate purchasers of the fuel, non-Indian casino patrons, receive the bulk of their governmental services from the State, id., at 1309. The court held that the States tax did not interfere with the Nations right of self-government, adding that a tribe cannot oust a state from any power to tax on-reservation purchases by nonmembers of the tribe by simply imposing its own tax on the transactions or by otherwise earning its revenues from the tribal business. Id., at 1311.
The Court of Appeals for the Tenth Circuit reversed. 379 F.3d 979 (2004). It determined that, under Bracker, the balance of state, federal, and tribal interests favored the Tribe. The Tenth Circuit reasoned that the Nations fuel revenues were derived from value generated primarily on its reservation, 379 F.3d, at 984namely, the creation of a new fuel market by virtue of the presence of the casinoand that the Nations interests in taxing this reservation-created value to raise revenue for reservation infrastructure outweighed the States general interest in raising revenues, id., at 986. We granted certiorari, 543 U.S. 1186 (2005), and now reverse.
Although we granted certiorari to determine whether Kansas may tax a non-Indian distributors off-reservation receipt of fuel without being subject to the Bracker interest-balancing test, Pet. for Cert. i, the Nation maintains that Kansas tax is imposed not on the off-reservation receipt of fuel, but on its on-reservation sale and delivery, Brief for Respondent 11 (emphasis in original). As the Nation recognizes, under our Indian tax immunity cases, the who and the where of the challenged tax have significant consequences. We have determined that [t]he initial and frequently dispositive question in Indian tax cases . . . is who bears the legal incidence of [the] tax, Oklahoma Tax Commn v. Chickasaw Nation, 515 U.S. 450, 458 (1995) (emphasis added), and that the States are categorically barred from placing the legal incidence of an excise tax on a tribe or on tribal members for sales made inside Indian country without congressional authorization, id., at 459 (emphasis added). We have further determined that, even when a State imposes the legal incidence of its tax on a non-Indian seller, the tax may nonetheless be pre-empted if the transaction giving rise to tax liability occurs on the reservation and the imposition of the tax fails to satisfy the Bracker interest-balancing test. See 448 U.S. 136 (holding that state taxes imposed on on-reservation logging and hauling operations by non-Indian contractor are invalid under the interest-balancing test); cf. Central Machinery Co. v. Arizona Tax Commn, 448 U.S. 160 (1980) (holding that the Indian trader statutes pre-empted Arizonas tax on a non-Indian sellers on-reservation sales).
The Nation maintains that it is entitled to prevail under the categorical bar articulated in Chickasaw because [t]he fairest reading of the statute is that the legal incidence of the tax actually falls on the Tribe [on the reservation]. Brief for Respondent 17, n. 5. The Nation alternatively maintains it is entitled to prevail even if the legal incidence of the tax is on the non-Indian distributor because, according to the Nation, the tax arises out of a distributors on-reservation transaction with the Tribe and is therefore subject to the Bracker balancing test. Brief for Respondent 15. We address the who and the where of Kansas motor fuel tax in turn.
Kansas law specifies that the incidence of [the motor fuel] tax is imposed on the distributor of the first receipt of the motor fuel. Kan. Stat. Ann. §793408(c) (2003 Cum. Supp.). We have suggested that such dispositive language from the state legislature is determinative of who bears the legal incidence of a state excise tax. Chickasaw, supra, at 461. But even if the state legislature had not employed such dispositive language, thereby requiring us instead to look to a fair interpretation of the taxing statute as written and applied, California Bd. of Equalization v. Chemehuevi Tribe, 474 U.S. 9, 11 (1985) (per curiam), we would nonetheless conclude that the legal incidence of the tax is on the distributor.
Kansas law makes clear that it is the
distributor, rather than the retailer, that is liable to pay
the motor fuel tax. Section 793410(a) (1997) provides,
in relevant part, that [e]very distributor . . . shall
compute and shall pay to the director . . . the amount of
[motor fuel] taxes due to the state. While the
distributors are entitled to pass along the cost of
the tax to downstream purchasers, see §793409 (2003
Cum. Supp.), they are not required to do so. In sum, the legal
incidence of the Kansas motor fuel tax is on the distributor.
The lower courts reached the same conclusion. 379 F.3d, at 982
(The Kansas legislature structured the tax so that its
legal incidence is placed on non-Indian distributors);
241 F. Supp. 2d, at 1311 ([I]t is undisputed that
the legal incidence of the tax is directed off-reservation at
the fuel distributors); see also Sac and Fox Nation of
Missouri v. Pierce, 213 F.3d 566, 578 (CA10 2000)
([T]he legal incidence of the [Kansas] tax law as
presently written falls on the fuel distributors rather than on
the Tribes); Winnebago Tribe of Nebraska v.
Kline, 297 F. Supp. 2d 1291, 1294 (Kan. 2004)
(Under the Kansas statutory scheme, the legal incidence
of the states fuel tax falls on the distributor of
first receipt of such fuel); Sac and Fox Nation
of Missouri v. LaFaver, 31 F. Supp. 2d 1298,
1307 (Kan. 1998) ([T]he statutes are extremely clear in
providing that the tax in question is imposed upon the
distributor). And the Kansas Department of Revenue, the
state agency charged with administering the motor fuel tax, has
concluded likewise. See Letter from David J. Heinemann,
Office of Administrative Appeals, to Mark Burghart, Written
Final Determination in Request for Informal Conference for
Reconsideration of Agency Action, Davies Oil Co., Inc.,
Docket No. 01970 (Jan. 3, 2002) (hereinafter Kansas Dept.
of Revenue Letter) (The legal incidence of the Kansas
fuel tax rests with Davies, the distributor, who is up-stream
from Nation, the
The United States, as amicus,
contends that this conclusion is foreclosed by the Kansas
Supreme Courts decision in Kaul v. Kansas Dept.
of Revenue, 266 Kan. 464, 970 P.2d 60 (1998). The United
States reads Kaul as holding that the legal incidence of
Kansas motor fuel tax rests on the Indian retailers,
rather than on the non-Indian distributors. And, under the
United States view, so long as the Kansas Supreme
We disagree with the United
States interpretation of Kaul. In Kaul,
two members of the Citizen Band Potawatomi Tribe of Oklahoma
sought to enjoin the enforcement of Kansas fuel tax on
fuel delivered to their gas station located on the Prairie Band
Potawatomi Tribe of Kansas Reservation. The Kansas
Supreme Court determined that the station owners had standing
to challenge the tax because the statute provided that the
distributor was entitled to
Kaul does not foreclose our determination that the distributor bears the legal incidence of the Kansas motor fuel tax. As an initial matter, it is unclear whether the courts reference to nontribal members is a reference to the non-tribal-member retailers or the non-tribal-member distributors. At the very least, Kauls imprecise language cannot be characterized as a definitive determination. Moreover, the 1998 amendments to the Kansas fuel provisions, including the amendment to §793408(c) that provides that the incidence of this tax is imposed on the distributor, were not applied in Kaul. Id., at 473, 970 P.2d, at 66 (identifying provisions that were repealed in 1998 as being in effect during the period relevant to this case); id., at 474, 970 P.2d, at 67 (noting that a critical statute to its holding was the 1995 version of §793409, which was amended in 1998). Accordingly, Kaul did not speak authoritatively on the provisions before us today.
The Nation maintains that we must apply the Bracker interest-balancing test, irrespective of the identity of the taxpayer (i.e., the party bearing the legal incidence), because the Kansas fuel tax arises as a result of the on-reservation sale and delivery of the motor fuel. See Brief for Respondent 15. Notably, however, the Nation presented a starkly different interpretation of the statute in the proceedings before the Court of Appeals, arguing that [t]he balancing test is appropriate even though the legal incidence of the tax is imposed on the Nations non-Indian distributor and is triggered by the distributors receipt of fuel outside the reservation. Appellants Reply Brief in No. 033218 (CA10), p. 3 (emphasis added); see also 241 F. Supp. 2d, at 1311 (District Court observing that it is undisputed that the legal incidence of the tax is directed off-reservation at the fuel distributors). A fair interpretation of the taxing statute as written and applied, Chemehuevi Tribe, 474 U.S., at 11, confirms that the Nations interpretation of the statute before the Court of Appeals was correct.
As written, the Kansas fuel tax provisions state that the incidence of this tax is imposed on the distributor of the first receipt of the motor fuel and such taxes shall be paid but once. Such tax shall be computed on all motor-vehicle fuels or special fuels received by each distributor, manufacturer or importer in this state and paid in the manner provided for herein . . . . Kan. Stat. Ann. §793408(c) (2003 Cum. Supp.). Under this provision, the distributor who initially receives the motor fuel is liable for payment of the fuel tax, and the distributors tax liability is determined by calculating the amount of fuel received by the distributor.
Section 793410(a) (1997) confirms that it is the distributors off-reservation receipt of the motor fuel, and not any subsequent event, that establishes tax liability. That section provides:
[E]very distributor, manufacturer, importer, exporter or retailer of motor-vehicle fuels or special fuels, on or before the 25th day of each month, shall render to the director . . . a report certified to be true and correct showing the number of gallons of motor-vehicle fuels or special fuels received by such distributor, manufacturer, importer, exporter or retailer during the preceding calendar month . . . . Every distributor, manufacturer or importer within the time herein fixed for the rendering of such reports, shall compute and shall pay to the director at the director's office the amount of taxes due to the state on all motor-vehicle fuels or special fuels received by such distributor, manufacturer or importer during the preceding calendar month.
Thus, Kansas law expressly provides that a distributors monthly tax obligations are determined by the amount of fuel received by the distributor during the preceding month. See Kline, 297 F. Supp. 2d, at 1294 (The distributor must compute and remit the tax each month for the fuel received by the distributor in the State of Kansas).
The Nation disagrees. It contends that what is taxed is not the distributors (off-reservation) receipt of the fuel, but rather the distributors use, sale, or delivery of the motor fuelin this case, the distributors (on-reservation) sale or delivery to the Nation. The Nation grounds support for this proposition in §793408(a) (2003 Cum. Supp.). That section provides that [a] tax . . . is hereby imposed on the use, sale or delivery of all motor vehicle fuels or special fuels which are used, sold or delivered in this state for any purpose whatsoever. But this section cannot be read in isolation. If it were, it would permit Kansas to tax the same fuel multiple timesnamely, every time fuel is sold, delivered, or used. Section 793408(a) must be read in conjunction with subsection (c), which specifies that the incidence of this tax is imposed on the distributor of the first receipt of the motor fuel and such taxes shall be paid but once. (Emphasis added.) The identity of the single, taxable event is revealed in the very next sentence of subsection (c), which provides that [s]uch tax shall be computed on all . . . fuels received by each distributor. (Emphasis added.) In short, the use, sale or delivery that triggers tax liability is the sale or delivery of the fuel to the distributor. The Kansas Department of Revenue has issued a final determination reaching the same conclusion. See Kansas Dept. of Revenue Letter ([P]ursuant to the Kansas Motor Fuel Tax Act the state fuel tax was imposed on Davies, a distributor, when Davies first received the fuel at its business, a site located off of Nations reservation (emphasis added)).
The Nation claims further support for its interpretation of the statute in §793408(d) (2003 Cum. Supp.). Section 793408(d) permits distributors to obtain deductions from the Kansas motor fuel tax for certain postreceipt transactions, such as sale or delivery of fuel for export from the State and sale or delivery of fuel to the United States. §§793408(d)(1)(2). The Nation argues that these exemptions make it impossible for a distributor to calculate its ultimate tax liability without knowing whether, where, and to whom the fuel is ultimately sold or delivered. Brief for Respondent 15. The Nation infers from these provisions that the taxable event is actually the distributors postreceipt delivery of fuel to retailers such as the Nation, rather than the distributors initial receipt of the fuel.
The Nations theory suffers from a number of conceptual defects. First, under Kansas law, a distributor must pay the tax even for fuel that sits in its inventoryfuel that is not (or at least has not yet been) used, sold, or delivered by the distributor.3 But the Nations interpretation presumes that the tax is owed only on a distributors postreceipt use, sale, or delivery of fuel. As this interpretation cannot be reconciled with the manner in which the Kansas motor fuel tax is actually applied, it must be rejected.4 Second, the availability of tax deductions does not change the nature of the taxable event, here the distributors receipt of the fuel. By analogy, an individual federal income taxpayer may reduce his tax liability by paying home mortgage interest. But that entitlement does not render the taxable event anything other than the receipt of income by the taxpayer. See 26 U.S.C. § 1 (2000 ed. and Supp. II), §163(h) (2000 ed.); cf. North American Oil Consol. v. Burnet, 286 U.S. 417, 424 (1932) (federal income tax liability arises when a taxpayer has received income).
Finally, the Nation contends that its interpretation of the statute is supported by Kan. Stat. Ann. §793417 (1997), which permits a refundin certain circumstancesfor destroyed fuel. However, the Nations interpretation is actually foreclosed by that section. Section 793417 entitles a distributor to a refund from the state of the amount of motor-vehicle fuels or special fuels tax paid on any . . . fuels of 100 gallons or more in quantity, which are lost or destroyed at any one time while such distributor is the owner thereof, provided the distributor supplies the required notification and documentation to the State. This section illustrates that a distributor pays taxes for fuel in its possession that it has not delivered or sold, and is only entitled to the refund described in this section for tax it has already paid on fuel that is subsequently destroyed. While this section does not specify the event that gives rise to the distributors tax liability, it forecloses the Nations contention that such liability does not arise until fuel is sold or delivered to a nonexempt entity.
Although Kansas fuel tax is
imposed on non-Indian distributors based upon those
distributors off-reservation receipt of motor fuel, the
Tenth Circuit concluded that the tax was nevertheless still
subject to the interest-balancing test this Court set forth in
U.S. 136. As Bracker itself explained, however, we
formulated the balancing test to address the difficult
questio[n] that arises when a State asserts
authority over the conduct of non-Indians engaging in activity
on the reservation. Id., at 144145
(emphasis added). The Bracker interest-balancing test
has never been applied where, as here, the State asserts
its taxing authority over non-Indians off the reservation. And although we have never addressed this precise issue, our Indian tax immunity cases counsel against such an application.
We have applied the balancing test articulated in Bracker only where the legal incidence of the tax fell on a nontribal entity engaged in a transaction with tribes or tribal members, Arizona Dept. of Revenue v. Blaze Constr. Co., 526 U.S. 32, 37 (1999), on the reservation. See Bracker, supra (motor carrier license and use fuel taxes imposed on on-reservation logging and hauling operations by non-Indian contractor); Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros., 512 U.S. 61 (1994) (various taxes imposed on non-Indian purchasers of goods retailed on-reservation); Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989) (state severance tax imposed on non-Indian lessees on-reservation production of oil and gas); Ramah Navajo School Bd., Inc. v. Bureau of Revenue of N. M., 458 U.S. 832 (1982) (state gross receipts tax imposed on private contractors proceeds from the construction of a school on the reservation); Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134 (1980) (cigarette and sales taxes imposed on on-reservation purchases by nonmembers); Central Machinery Co., 448 U.S. 160 (tax imposed on on-reservation sale of farm machinery to Tribe). Similarly, the cases identified in Bracker as supportive of the balancing test were exclusively concerned with the on-reservation conduct of non-Indians. See Warren Trading Post Co. v. Arizona Tax Commn, 380 U.S. 685 (1965) (gross proceeds tax imposed on non-Indian retailer on Navajo Indian Reservation); Thomas v. Gay, 169 U.S. 264 (1898) (state property tax imposed on cattle owned by non-Indian lessees of tribal land); Williams v. Lee, 358 U.S. 217 (1959) (holding the state courts lacked jurisdiction over dispute between non-Indian, on-reservation retailer and Indian debtors).5
Limiting the interest-balancing test
exclusively to on-reservation transactions between a
nontribal entity and a tribe or tribal member is consistent
with our unique Indian tax immunity jurisprudence. We have
explained that this jurisprudence relies heavily on the
doctrine of tribal sovereignty . . . which historically gave
state law no role to play within a tribes
territorial boundaries. Oklahoma Tax Commn
v. Sac and Fox Nation, 508 U.S. 114,
123124 (1993) (quoting McClanahan v. Arizona
Tax Commn, 411 U.S. 164, 168
(1973)). We have further explained that the doctrine of tribal
sovereignty, which has a significant geographical
component, Bracker, supra, at 151, requires
us to revers[e] the
We have taken an altogether different course, by contrast, when a State asserts its taxing authority outside of Indian Country. Without applying the interest-balancing test, we have permitted the taxation of the gross receipts of an off-reservation, Indian-owned ski resort, Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973), and the taxation of income earned by Indians working on-reservation but living off-reservation, Chickasaw, 515 U.S. 450. In these cases, we have concluded that [a]bsent express federal law to the contrary, Indians going beyond reservation boundaries have generally been held subject to nondiscriminatory state law otherwise applicable to all citizens of the State. Mescalero Apache, supra, at 148149; Chickasaw, supra, at 465 (quoting Mescalero Apache, supra, at 148149). If a State may apply a nondiscriminatory tax to Indians who have gone beyond the boundaries of the reservation, then it follows that it may apply a nondiscriminatory tax where, as here, the tax is imposed on non-Indians as a result of an off-reservation transaction. In these circumstances, the interest-balancing test set forth in Bracker is inapplicable. Cf. Blaze Constr., 526 U.S., at 37 (declining to apply the Bracker interest-balancing test where a State seeks to tax a transaction [on-reservation] between the Federal Government and its non-Indian private contractor).
The application of the
interest-balancing test to the Kansas motor fuel tax is not
only inconsistent with the special geographic sovereignty
concerns that gave rise to that test, but also with our efforts
to establish bright-line standard[s] in the context
of tax administration. Ibid. (The need to avoid
litigation and to ensure efficient tax administration counsels
in favor of a bright-line standard for taxation of federal
contracts, regardless of whether the contracted-for activity
takes place on Indian reservations); cf.
Chickasaw, supra, at 460 (noting that the legal
Nor is the Nation entitled to interest balancing by virtue of its claim that the Kansas motor fuel tax interferes with its own motor fuel tax. As an initial matter, this is ultimately a complaint about the downstream economic consequences of the Kansas tax. As the owner of the station, the Nation will keep every dollar it collects above its operating costs. Given that the Nation sells gas at prevailing market rates, its decision to impose a tax should have no effect on its net revenues from the operation of the station; it should not matter whether those revenues are labeled profits or tax proceeds. The Nation merely seeks to increase those revenues by purchasing untaxed fuel. But the Nation cannot invalidate the Kansas tax by complaining about a decrease in revenues. See Colville, 447 U.S., at 156 (Washington does not infringe the right of reservation Indians to make their own laws and be ruled by them, Williams v. Lee, 358 U.S. 217, 220 (1959), merely because the result of imposing its taxes will be to deprive the Tribes of revenues which they currently are receiving). Nor would our analysis change if we accorded legal significance to the Nations decision to label a portion of the stations revenues as tax proceeds. See id., at 184, n. 9 (Rehnquist, J., concurring in part, concuring in result in part, and dissenting in part) (When two sovereigns have legitimate authority to tax the same transaction, exercise of that authority by one sovereign does not oust the jurisdiction of the other. If it were otherwise, we would not be obligated to pay federal as well as state taxes on our income or gasoline purchases. Economic burdens on the competing sovereign . . . do not alter the concurrent nature of the taxing authority).6
Finally, the Nation contends that the Kansas motor fuel tax is invalid notwithstanding the inapplicability of the interest-balancing test, because it exempts from taxation fuel sold or delivered to all other sovereigns, and is therefore impermissibly discriminatory. Brief for Respondent 1720 (emphasis deleted); Kan. Stat. Ann. §§793408(d)(1)(2) (2003 Cum. Supp.). But the Nation is not similarly situated to the sovereigns exempted from the Kansas fuel tax. While Kansas uses the proceeds from its fuel tax to pay for a significant portion of the costs of maintaining the roads and bridges on the Nations reservation, including the main highway used by the Nations casino patrons, Kansas offers no such services to the several States or the Federal Government. Moreover, to the extent Kansas fuel retailers bear the cost of the fuel tax, that burden falls equally upon all retailers within the State regardless of whether those retailers are located on an Indian reservation. Accordingly, the Kansas motor fuel tax is not impermissibly discriminatory.
* * *
For the foregoing reasons, we hold that the Kansas motor fuel tax is a nondiscriminatory tax imposed on an off-reservation transaction between non-Indians. Accordingly, the tax is valid and poses no affront to the Nations sovereignty. The judgment of the Court of Appeals is reversed.
It is so ordered.
1. The Kansas Legislature recently amended the fuel tax statute. 2005 Kan. Sess. Laws ch. 46. The text of the sections to which we refer remains the same, although the subsection numbers have changed. For consistency, our subsection references are to the 2003 version applied by the lower courts and cited by the parties.
2. The record does not clearly establish whether the distributor passed along the cost of the tax to the Nations gas station. At oral argument, petitioner acknowledged that the record was unclear, but represented that the distributor was in fact passing along the cost of the tax to the Nation.
3. This understanding of the application of the Kansas fuel tax is confirmed by the form that fuel distributors are required to fill out each month pursuant to Kan. Stat. Ann. §793410 (1997). See Kansas Form MF52, available at http://www.ksrevenue.org/pdf/forms/mf52.pdf (as visited Nov. 21, 2005, and available in Clerk of Courts case file). The form instructs distributors to enter in line 1 the total net gallons of gasoline, gasohol and special fuel received or imported during the preceding month. Id., at 2. The distributors may then [e]nter the deductions that apply to your business in lines 2(a)-to-(e) for the preceding month. Those deductions include [n]et gallons of fuel exported from Kansas, [n]et gallons of fuel sold to the U.S. Government, [n]et gallons of fuel sold for aviation purposes, and [n]et gallons of dyed diesel fuel received for the month, the very deductions described in §793408(d), ibid. (emphasis added). The distributors tax liability is then calculated by subtracting the total deductions from the total fuel received, and applying the 2.5 percent handling allowance to the difference. Thus, the event that generates a distributors tax liability is its receipt of fuel. And the distributor must pay tax on that fuel even if it is not subsequently delivered or sold. While a distributor may decrease its tax liability by engaging in transactions that entitle it to deductions, such as by selling or delivering fuel to an exempt entity like the United States, its tax liability is unaffected by sales or deliveries to nonexempt entities like the Nation.
4. Indeed, the dissent acknowledges that tax is owed on fuel a distributor receives and holds in inventoryand thus implicitly concedes that the distributors off-reservation receipt of motor fuel is the event that gives rise to tax liability. See post, at 5 (opinion of Ginsburg, J.). While the dissent contends that such tax is ultimately effectively offset by a subsequent delivery of the inventoried fuel, ibid., the dissent does not explain the meaning of this opaque contention. A distributors subsequent delivery of fuel to the Nation or any other fuel retailer in Kansas has no effect on tax that it has already paid in a preceding month. Indeed, the distributor does not report delivery to retailers on its monthly tax return. See Kansas Form MF52. And a distributor must pay the tax even if the fuel is never delivered.
5. Our recent discussion in Oklahoma Tax Commn v. Chickasaw Nation, 515 U.S. 450 (1995), regarding the application of the interest-balancing test to motor fuel taxes is not to the contrary. In Chickasaw, we noted in dicta that, if the legal incidence of the tax rests on non-Indians, no categorical bar prevents enforcement of the tax; if the balance of federal, state, and tribal interests favors the State, and federal law is not to the contrary, the state may impose its levy, and may place on a tribe or tribal members minimal burdens in collecting the toll. Id., at 459 (citation omitted). Chickasaw did not purport to expand the applicability of White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), to an off-reservation tax on non-Indians. Indeed, the quoted sentence reveals that Chickasaw discussed the applicability of the interest-balancing test in the context of a tax that is collected by the tribea tax that necessarily arises from on-reservation conduct. Moreover, in purporting to craft a bright-line standard in that case, we noted that Oklahoma generally is free to impose the legal incidence of its motor fuel tax on the consumerwho purchases fuel on the reservationand then require the Indian retailers to collect and remit the levy. 515 U.S., at 460. If Oklahoma would have been free to impose the legal incidence of its fuel tax downstream from the Indian retailers, then Kansas should be equally free to impose the legal incidence of its fuel tax upstream from Indian retailers notwithstanding the applicability of the interest-balancing test. Indeed, the Chickasaw dicta should apply a fortiori here; the upstream approach is less burdensome on the Tribe because it does not include the collecting and remitting requirements that typically, and permissibly, accompany a consumer tax.
6. These authorities also foreclose the Nations contention that the Kansas motor fuel tax is invalid, irrespective of the applicability of Bracker, 448 U.S. 136, because it interferes with the Nations right to self government. See Brief for Respondent 4547.