710
Opinion of the Court
and Tribe may impose severance taxes on on-reservation oil and gas production by a non-Indian lessee. Cotton Petroleum Corp. v. New Mexico, 490 U. S. 163 (1989). Cotton Petroleum indicated that Montana's taxes on ceded strip coal were invalidated, not because the State lacked power to tax the coal at all, but because the taxes at issue were "extraordinarily high." Id., at 186-187, n. 17.
The Tribe's exercise of taxing authority, on the other hand, required approval from the Secretary of the Interior, and that approval had not been obtained in the relevant period, 1975-1982. See supra, at 703-704. In 1988, the District Court had determined that the Interior Department's refusal to approve the Tribe's tax on the ceded strip was an error, see supra, at 707, but the presence of the state taxes did not cause that error. App. to Pet. for Cert. 36. Rather, the Department initially questioned the Tribe's authority to tax on the ceded strip and later pointed to the Tribe's noncompliance with the proper procedures for amending its constitution to impose the tax. Id., at 36-37.
Accorded weight in the District Court's evaluation, West-moreland would not have paid coal taxes to the Tribe prior to 1983, for Interior Department approval was essential to allow pass-through to the company's customers. Id., at 35. Furthermore, under the 1982 lease agreement, see supra, at 704-705, the Tribe and Westmoreland stipulated that West-moreland would have no tax liability to the Tribe for the 1976-1982 period. App. to Pet. for Cert. 36.9 Moreover, the deposited funds, Westmoreland's post-1982 tax payments,
9 The District Court clarified that its 1988 ruling referring to the Interior Department's error was issued not to suggest any Westmoreland tax obligation to the Tribe in lieu of the State predating the 1982 lease agreement, but "as a basis for ordering that the escrowed funds be released to the Tribe and not Westmoreland by virtue of [that] agreement." App. to Pet. for Cert. 36; see also id., at 53-54.
Page: Index Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: October 4, 2007