Section of Taxation Publications

VOL. 63
NO. 4

Contents | TTL Home


Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.


The Unfulfilled Promise of the Indian Commerce Clause and State Taxation

Richard D. Pomp*

This Article is an expanded version of luncheon remarks delivered at a symposium on the Commerce Clause at Georgetown Law School. A few things became clear after my address on the Indian Commerce Clause and state taxation. Many people at the Conference had only a faint memory that such a clause even existed. To most state tax practitioners and academics, “the Commerce Clause” meant the Interstate Commerce Clause and, perhaps secondarily, the Foreign Commerce Clause, but certainly not the Indian Commerce Clause.

True, a small group of “Indian law” insiders has long existed. These specialists have traditionally serviced tribes endowed with natural resources. More recently, revenue generated across the country from Indian gaming, hotels, restaurants, manufacturing, industrial parks, gas stations, cement factories, timber operations, smokeshops, or sports franchises has created legal work for firms that traditionally did not practice Indian law.

This new group of practitioners has quickly learned what the more experienced firms have long known: the issues raised by the taxation of Indians, the tribes, and those doing business with them are sui generis—and complicated, even by tax standards. To be sure, state tax lawyers are used to multijurisdictional issues. Taxes are levied by sewer, water, school, and transit districts; cities; counties; states; and the national government—tribal taxes would seem to add merely one more level.

Although comforting, this view would be misleading. Indian taxation drags lawyers into areas outside their normal comfort zone. Practitioners need to master treaties between the federal government and the tribes; state enabling acts; numerous Indian-specific statutes and executive orders that often reflect polar swings in Congressional policy; special Indian canons of construction; the unique patchwork pattern of land ownership on reservations; and concepts like “Indian sovereignty” that serve as a ubiquitous, amorphous, and malleable backdrop in many cases. Bread-and-butter issues for state tax lawyers—like apportionment and discrimination—take on new meanings. The Indian tax cases tolerate results that would violate the Interstate Commerce Clause. The formative Supreme Court cases on Indian taxation often reflect the composition of the bench and sympathies (or lack thereof) of individual justices for the Indians. Add to this the difficulty of obtaining up-to-date information on tribal tax codes, and the result is a labyrinth of unpredictability.

While the topic of my conference presentation and hence the subject of this Article is the Indian Commerce Clause and state taxation—and not a treatise on all aspects of state taxation (and nothing on federal taxation)—I would disserve the reader by not straying a bit afield. To cut to the chase, the Court has emasculated and denigrated the Indian Commerce Clause, preventing implementation of the Founders’ vision. Readers would have every right to feel that slogging their way through this lengthy Article was not worth the effort if that were the only message at the end of the journey. And so, with the encouragement of the conference organizers and journal editors, I have interpreted my charge broadly to sketch the contours of other Indian tax doctrines so that the reader will have a feel for the signposts and boundaries. I have focused on a selection of prominent U.S. Supreme Court cases, mostly involving state taxation; many more could have been discussed. My goal is not to be exhaustive (or exhausting), but rather suggestive and illustrative.

Unlike an article on, say, the Interstate Commerce Clause, I have not assumed a shared tax culture and history that would otherwise allow me to mention a chestnut like Complete Auto and move on, secure that everyone was intimately familiar with that watershed case. Accordingly, I have presented the seminal Indian tax cases in detail. I have also indulged myself in the occasional tangent when I thought there was something of particular interest to state tax academics and practitioners. Most writing on Indian taxation has been dominated by Indian law scholars and academics more schooled in federal than state tax. Yet, as I hope to demonstrate, state tax lawyers and academics have a unique and useful perspective for analyzing many of the precedent-setting Supreme Court cases.

Finally, I have let the justices speak in their own voices more than is typical in the academic literature. My own experience, especially in the field of Indian taxation but also more generally, is that too often an author’s paraphrasing and description of a case fails to capture the nuances, texture, layers, and subtleties that characterize an opinion. Too many authors force the reader to print out a case and read it alongside their articles.

Given the theme of this Article, Section II opens with a detailed and lengthy history of Colonial America, the Crown, and their dealings with the Indians. Section II ends with the adoption of the Articles of Confederation, with a special focus on Article IX—the precursor to the Indian Commerce Clause. Section III surveys the Constitutional Convention and the birth of the Indian Commerce Clause and contrasts that Clause with the Interstate and Foreign Commerce Clauses. It highlights two competing schools of interpretation of the Indian Commerce Clause. These Sections make a credible case that the Indian Commerce Clause was not meant to be interpreted in pari materia with the Interstate Commerce Clause and the Foreign Commerce Clause. Compared with these other Clauses, the Indian Commerce Clause was drafted and formulated at a different time during the Constitutional Convention, had its unique roots in the Articles of Confederation, and was apparently tagged onto the already drafted Interstate and Foreign Commerce Clauses, more for stylistic convenience than for substantive reasons. with them and, to a lesser extent, those involving tribal taxation.

Section VI provides a conclusion and attempts to answer why the promise of the Indian Commerce Clause has gone unfulfilled. The section also provides some guidance in negotiating the “labyrinth of unpredictability.”

Section IV presents the early U.S. Supreme Court jurisprudence, covering 1831-1899. Both tax and non-tax cases are analyzed. Section V covers the modern cases, starting in 1959. Together Sections IV and V showcase the seminal cases involving state taxation of Indians and those doing business

*Alva P. Loiselle Professor of Law, University of Connecticut Law School. B.S., summa cum laude, University of Michigan; J.D., magna cum laude, Harvard Law School.


Published by the
American Bar Association Section of Taxation
in Collaboration with the
Georgetown University Law Center


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