Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros., 512 U.S. 61, 2 (1994)

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62

DEPARTMENT OF TAXATION AND FINANCE OF N. Y. v. MILHELM ATTEA & BROS.

Syllabus

(a) Because respondents have made essentially a facial challenge, this case is confined to those alleged defects that inhere in the regulations as written, and the Court need not assess for all purposes each feature of the tax scheme that might affect tribal self-government or federal authority over Indian affairs. Pp. 69-70. (b) Indian traders are not wholly immune from state regulation that is reasonably necessary to the assessment or collection of lawful state taxes. Although broad language in Warren Trading Post suggests such immunity, that proposition has been undermined by subsequent decisions in Moe (upholding a state law requiring Indian retailers on tribal land to collect a state cigarette tax imposed on sales to non-Indians), Colville (upholding in relevant part a state law requiring tribal retailers on reservations to collect cigarette taxes on sales to nonmembers and to keep extensive records), and Oklahoma Tax Comm'n v. Citizen Band of Potawatomi Tribe of Okla., 498 U. S. 505. These cases have made clear that the States have a valid interest in ensuring compliance with lawful taxes that might easily be evaded through purchases of tax-exempt cigarettes on reservations; that interest outweighs tribes' modest interest in offering a tax exemption to customers who would ordinarily shop elsewhere. Thus, there is more room for state regulation in this area. In particular, these cases have decided that States may impose on reservation retailers minimal burdens reasonably tailored to the collection of valid taxes from non-Indians. It would be anomalous to hold that a State could impose tax collection and bookkeeping burdens on reservation retailers who are enrolled tribal members but not on wholesalers, who often are not. Pp. 70-75. (c) New York's scheme does not impose excessive burdens on Indian traders. Respondents' objections to the regulations setting quotas and requiring that petitioners preapprove deliveries provide no basis for a facial challenge, although the possibility of inadequate quotas may provide a basis for a future challenge to the regulations' application. The requirements that wholesalers sell untaxed cigarettes only to persons with valid exemption certificates and keep detailed records are no more demanding than comparable measures approved in Colville. Moreover, the precollection obligation placed on wholesalers is the same as the obligation that, under Moe and Colville, may be imposed on reservation retailers. The United States' arguments supporting its position that the scheme improperly burdens Indian trading are also rejected. Pp. 75-78. 81 N. Y. 2d 417, 615 N. E. 2d 994, reversed.

Stevens, J., delivered the opinion for a unanimous Court.

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