For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: November 5, 2004

U.S. Supreme Court Asked to Review Fuel Tax Ruling

(Boise) - The Office of Attorney General, acting as legal counsel to the Idaho State Tax Commission, filed a petition for certiorari today asking the United States Supreme Court to review the case of Coeur d'Alene Tribe v. Hammond, Attorney General Lawrence Wasden said.

The case involves legal issues relating to the state's ability to tax motor fuel sold on Indian reservations.

The petition presents two questions for review:

  • Whether the 2001 amendments to state law shifted the motor fuel tax's legal incidence to distributors as the Legislature explicitly provided, and
  • Whether the term "reservations" in the federal Hayden-Cartwright Act includes Indian reservations.

"This appeal asks the Supreme Court to decide important questions concerning whether the state can tax fuel sold on Indian reservations," Attorney General Wasden said. "It also reflects the attorney general's duty to defend the laws of the State of Idaho in all courts of law."


In 2001, the Idaho Supreme Court decided the case of Goodman Oil Co. v. Idaho State Tax Commission. Goodman Oil Co., a motor fuel distributor, contested its obligation to pay the state tax on fuel sold to a tribally owned retail station on the Coeur d'Alene Indian Reservation. The Idaho Supreme Court found the tax preempted. The court first construed 1936 federal statute, the Hayden-Cartwright Act, which allows state fuel taxes to be imposed on "United States military or other reservations" as inapplicable to Indian reservations. Thus, the Hayden-Cartwright Act did not negate the ordinary rule that States may not place the legal incidence of their taxes on tribes or tribal members with respect to on-reservation transactions. The Idaho Supreme Court then construed the state statute to impose legal incidence on retailers, not distributors.

In 2002, the Idaho Legislature amended the motor fuel tax statute to explicitly place the tax's legal incidence on fuel distributors. Immediately after the amendments took effect in April 2001, the Coeur d'Alene Tribe challenged them in federal district court. The Nez Perce Tribe and the Shoshone Bannock Tribes then filed similar lawsuits. Each tribe acts as a gasoline retailer on its respective reservation and purchases fuel from non-Indian distributors. In August 2002, the Federal District Court invalidated the tax, concluding that the amendments had not shifted the tax's legal incidence to the non-Indian distributors and again rejecting the Hayden-Cartwright Act's applicability to Indian reservations.

The Idaho state tax commissioners appealed the Federal District Court's decision to the Ninth Circuit Court of Appeals. In August 2004, a divided three-judge panel of the Ninth Circuit affirmed the district court.

The tribes have 30 days from the petition's docketing to file an opposition. The commissioners expect the Supreme Court to decide in January whether it will hear the case.

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