## Facts

- The Sac and Fox Nation is a federally recognized tribe in Oklahoma that governs itself and operates its own tax commission.
- The Tribe taxes earnings of persons working within tribal jurisdiction, including nonmembers.
- Oklahoma sought to impose state income tax on income earned by tribal members working for the Tribe.
- Oklahoma also sought to impose motor vehicle excise taxes and registration fees on vehicles owned by tribal members who principally lived and garaged their vehicles on tribal land but registered those vehicles with the Tribe.
- The Tribe sued to enjoin Oklahoma from taxing (1) tribal members’ income connected to tribal employment and (2) tribal members’ vehicles kept on tribal land.
- Oklahoma argued that an 1891 treaty disestablished the Tribe’s reservation and that state tax immunity rules applied only on formally established reservations, giving the State broad taxing authority.
- The court of appeals held the income at issue immune from state taxation and treated the vehicle taxes as categorically barred, without determining whether the taxed tribal members resided in “Indian country.”

## Issues

1. Whether Oklahoma may impose state income tax on income earned by tribal members working for the Tribe when the members may or may not reside in Indian country.
2. Whether Oklahoma may impose motor vehicle excise taxes and registration fees on vehicles owned by tribal members who live and garage their vehicles principally in Indian country and register them with the Tribe.
3. Whether the State’s taxing authority depends on formal reservation status or instead turns on whether the relevant territory qualifies as “Indian country.”

## Decision

- The Supreme Court vacated the judgment and remanded for further proceedings.
- The Court held that, absent explicit congressional direction, a State is presumed to lack jurisdiction to tax tribal members who live and work in Indian country, whether the territory is a formal or informal reservation, allotted lands, or dependent Indian communities.
- The Court ruled that a tribal member’s residence is a significant component of the presumption against state taxing authority and that the lower court erred by not determining where the relevant tribal members resided.
- The Court rejected Oklahoma’s position that tax immunity doctrine is limited to formally designated reservations.
- The Court required a more fact-specific application of the Indian country framework to both the income tax and the motor vehicle taxes.

## Legal Principles

- Absent explicit congressional authorization, States are presumed not to have jurisdiction to tax tribal members who live and work in Indian country.
- “Indian country,” not the technical label “reservation,” is the controlling territorial concept for applying the presumption against state taxation of tribal members.
- For state income taxation under the governing presumption, a tribal member’s residence in Indian country is a material factor, along with whether the income is earned in Indian country.
- Categorical treatment of state motor vehicle taxes as automatically barred is improper without determining whether the owners and vehicles are situated in Indian country and applying the governing presumption to the relevant facts.

## Conclusion

The Court required lower courts to determine tribal members’ residence in Indian country and to apply a presumption against state taxation of tribal members living and working in Indian country—regardless of formal reservation status—unless Congress has clearly authorized state taxing jurisdiction.


Oklahoma Tax Comm’n v. Sac & Fox Nation, 508 U.S. 114 (1993)