## Facts

- In 1978, the Navajo Tribal Council enacted two taxes applicable to business conducted on the Navajo Reservation: a 3% tax on the value of leasehold interests in tribal lands (including mineral leaseholds) and a 5% tax on gross receipts from sales of property produced or extracted, or services performed, within the reservation.
- The ordinances were sent to the Bureau of Indian Affairs, which advised there was no federal law requiring Secretarial approval for a tribal tax.
- Kerr-McGee Corporation, a non-Indian company, held significant mineral leasehold interests on the reservation and was subject to the taxes.
- Kerr-McGee asserted the taxes were invalid unless approved by the Secretary of the Interior because they applied to a non-Indian entity doing business on tribal land.
- The federal district court enjoined enforcement of the taxes against Kerr-McGee.
- The Ninth Circuit reversed, concluding no federal statute or principle required Secretarial approval.
- The Supreme Court granted review to decide whether Secretarial approval was a prerequisite to the Navajo Tribe’s taxation of on-reservation business activities by a non-Indian lessee.

## Issues

1. Whether a tribe must obtain approval of the Secretary of the Interior before imposing taxes on non-Indian persons or corporations conducting business on the reservation.

## Decision

- The Supreme Court affirmed the Ninth Circuit.
- The Court held the Secretary of the Interior’s approval was not required for the Navajo Tribe to impose and enforce the challenged taxes on Kerr-McGee’s on-reservation business activities.
- The Court rejected arguments that the Indian Reorganization Act, the Indian Mineral Leasing Act, or general federal Indian law principles imposed a Secretarial-approval condition on tribal taxation of nonmembers.

## Legal Principles

- Tribal power to tax members and nonmembers for on-reservation activities is a core attribute of tribal self-government and is presumed to exist absent clear congressional limitation.
- The Indian Reorganization Act does not generally condition tribal taxing authority on Secretarial approval, and it does not impose such a requirement on tribes that did not accept the Act’s provisions.
- The Indian Mineral Leasing Act’s submission of mineral leases to Secretarial regulation does not, without statutory or regulatory text, require Secretarial approval of tribal taxes related to mineral production or related on-reservation activities.
- Statutes requiring Secretarial supervision in other tribal contexts do not, by implication alone, restrict a tribe’s independent authority to tax nonmembers within its jurisdiction.

## Conclusion

The Court held that the Navajo Tribe could impose and enforce on-reservation taxes on a non-Indian mineral lessee without prior approval by the Secretary of the Interior because Congress had not clearly required such approval or otherwise restricted the tribe’s inherent taxing authority.


Kerr-McGee Corp. v. Navajo Tribe of Indians, 471 U.S. 195 (1985)