Cite as: 523 U. S. 696 (1998)
Opinion of the Court
C
The negative impact of Montana's high taxes on the marketability of the Tribe's coal, as the District Court correctly comprehended, was the principal basis for the Ninth Circuit's Crow II preemption decision. See supra, at 709. The Tribe and the United States urge that impact as an alternative justification for requiring Montana to disgorge taxes collected from Westmoreland from 1975 through 1982.
At oral argument, counsel for the Tribe clarified that the impact of concern was not coal that went unsold because the State's tax made the price too high. See Tr. of Oral Arg. 37. Instead, the Tribe's disgorgement claim rested on the coal "actually produced and sold"; by taxing that coal, counsel maintained, Montana "deprived [the Tribe] of its fair share of the economic rent." Ibid.
Again, however, the Tribe itself could not have exacted a tax from Westmoreland before 1983, because the Interior Department withheld approval. And the royalty the Tribe and Westmoreland agreed upon in 1974 was both high and long term, running until June 1982. See supra, at 701-702. No evidence suggests Westmoreland would have paid higher royalties, but for Montana's tax. It merits emphasis also, as the District Court recognized, App. to Pet. for Cert. 46, 50, that under our Cotton Petroleum decision, Montana could have imposed a severance tax, albeit not one so extraordinarily high. See Cotton Petroleum, 490 U. S., at 186-187 (New Mexico's oil and gas severance taxes imposed on on-reservation production, amounting to about 8 percent of the value of the taxpayer's production, were not preempted by federal law although the taxes could be expected to have "at least a marginal effect on the demand for on-reservation
supra, at 705, 710-711, we see no substantial basis for believing that West-moreland "would have paid the tribal tax even without [the Interior Department's] approval" or that "Westmoreland was willing to pay coal taxes to the Tribe as early as 1976," six years before the Department agreed that the Tribe was positioned to tax coal mined at the ceded strip. Crow IV, 92 F. 3d, at 830.
717
Page: Index Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: October 4, 2007