Lexplug logoLexplug

Warren Trading Post Co. v. Arizona Tax Commission

Supreme Court of the United States
14 L. Ed. 2d 165, 380 U.S. 685, 1965 U.S. LEXIS 1344 (1965)
ELI5:

Rule of Law:

When Congress has enacted a comprehensive scheme of federal laws and regulations governing a particular activity on an Indian reservation, state laws imposing additional burdens on that activity, such as taxes, are preempted and therefore invalid.


Facts:

  • Warren Trading Post Company operated a retail trading business on the portion of the Navajo Indian Reservation located within Arizona.
  • The company's business consisted of selling goods to reservation Indians.
  • Warren Trading Post operated under a license granted by the United States Commissioner of Indian Affairs.
  • This federal license was issued pursuant to a comprehensive set of federal statutes and detailed regulations that govern every aspect of trading with Indians on reservations.
  • The State of Arizona levied a 2% tax on the company's gross proceeds of sales or gross income.

Procedural Posture:

  • The State of Arizona levied a 2% tax on the gross income of Warren Trading Post Company.
  • Warren Trading Post challenged the tax, claiming it was invalid under federal law and the Constitution.
  • The Supreme Court of Arizona rejected the company's contentions and upheld the tax.
  • Warren Trading Post Company, as appellant, appealed the decision of the Arizona Supreme Court to the U.S. Supreme Court.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does Arizona's 2% gross proceeds tax on a federally licensed Indian trader, conducting business exclusively with Indians on the Navajo Reservation, conflict with and is it therefore preempted by the comprehensive federal laws and regulations governing trade with Indians?


Opinions:

Majority - Mr. Justice Black

Yes. This state tax cannot be imposed consistently with the comprehensive federal statutes regulating trade with Indians on the Navajo Reservation. The Court reasoned that federal regulation of Indian traders has been pervasive and exclusive since the nation's founding, as evidenced by numerous treaties and statutes giving the Commissioner of Indian Affairs sole power to appoint and regulate traders. The federal regulatory scheme is so comprehensive, governing licensing, pricing, and business practices, that it leaves no room for state law to impose additional burdens. Permitting Arizona to levy this tax would frustrate the clear congressional purpose of protecting Indians and ensuring that only federally authorized burdens are placed upon on-reservation Indian trading.



Analysis:

This case is a foundational decision in federal Indian law, firmly establishing the doctrine of federal preemption in this context. It demonstrates that states lack jurisdiction to regulate or tax on-reservation activities where Congress has legislated comprehensively, even if Congress has not explicitly forbidden state action. The decision reinforces the principle that federal authority over Indian affairs is paramount and serves to protect tribal self-governance from state encroachment. It sets a precedent that when the federal government occupies a regulatory field concerning Indian affairs, conflicting or burdensome state laws are implicitly preempted.

G

Gunnerbot

AI-powered case assistant

Loaded: Warren Trading Post Co. v. Arizona Tax Commission (1965)

Try: "What was the holding?" or "Explain the dissent"