## Facts

- The White Mountain Apache Tribe, through its tribal enterprise (Fort Apache Timber Company), contracted with Pinetop Logging Co., a non-Indian company, to cut and haul tribal timber on the Fort Apache Reservation in Arizona.
- The timber was harvested from reservation land held in trust by the United States for the Tribe’s benefit.
- Pinetop’s logging and hauling were performed solely on the reservation, using only Bureau of Indian Affairs (BIA) and tribal roads.
- Federal authorities, through statutes, regulations, and oversight by the Secretary of the Interior and the BIA, exercised detailed control over the harvesting, sale, and management of tribal timber and related road infrastructure.
- Arizona sought to impose on Pinetop (1) a motor carrier license tax based on gross receipts and (2) a use fuel tax based on diesel fuel used on highways within the state.
- Pinetop paid the taxes under protest; Pinetop and the Tribe contended the taxes were barred by federal law in these circumstances.
- Arizona courts rejected the preemption challenge; the U.S. Supreme Court granted review.

## Issues

1. Whether federal law preempts Arizona’s motor carrier license tax and use fuel tax as applied to a non-Indian contractor conducting logging and hauling solely on reservation lands and on tribal/BIA roads under a contract with a tribal enterprise.
2. Whether, in this setting, the state’s interests in taxation outweigh federal and tribal interests reflected in comprehensive federal regulation and policies supporting tribal self-government and tribal economic returns.

## Decision

- The Supreme Court reversed and held Arizona’s taxes were preempted as applied to Pinetop’s on-reservation logging and hauling.
- The Court applied a context-specific inquiry examining the federal, tribal, and state interests implicated by the asserted state authority over non-Indians on the reservation.
- It found federal regulation of tribal timber operations and reservation roads pervasive and extensive, leaving little room for additional state burdens.
- The Court concluded the taxes would undermine federal policy that timber revenues benefit the Tribe and would interfere with federal administration of rates, fees, and sustained-yield management.
- The Court viewed Arizona’s interest as comparatively weak because the taxed activity occurred entirely on reservation roads that the state did not build or maintain and the taxes functioned primarily as general revenue measures.
- A concurrence emphasized the narrowness of the holding as tied to the specific, heavily regulated context.
- A dissent would have upheld the taxes as nondiscriminatory exercises of state taxing authority over a non-Indian business.

## Legal Principles

- State taxation or regulation of non-Indians in Indian country may be preempted even without an express preemption clause when federal law and policy, together with tribal interests, leave no room for the state measure.
- The preemption analysis in this context requires a particularized inquiry into the nature of federal, tribal, and state interests and whether the state action is incompatible with federal law.
- Comprehensive federal regulation of a reservation-based activity can implicitly preempt additional state tax burdens that risk interfering with federal objectives and tribal economic interests.
- A state’s interest in raising general revenue is diminished where the taxed activity occurs exclusively on reservation infrastructure maintained by federal and tribal authorities.

## Conclusion

The Court held that Arizona could not apply its motor carrier license and use fuel taxes to a non-Indian contractor’s reservation-only timber hauling and logging because pervasive federal regulation of tribal timber and strong federal and tribal interests preempted the additional state tax burdens, and the state’s asserted interests were insufficient in the specific circumstances.


White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980)