Citations
- 379 F.3d 979
Full opinion text
McKAY, Circuit Judge.
This case addresses whether federal law prohibits Kansas from collecting its state tax on fuel supplied to an Indian tribe by a non-Indian distributor. Prairie Band Po-tawatomi Nation (the “Nation”) sought to invalidate the fuel tax on grounds that it is preempted by federal law and that it infringes on the Nation’s rights of self-government. The district court granted summary judgment for the Secretary of the Kansas Department of Revenue (the “Secretary”), and the Nation brought this appeal.
Facts
The following facts are undisputed. The Nation is a federally-recognized Indian tribe whose reservation is on United States trust land in Jackson County, Kansas. Aplt.App., Vol. I, at 35. On its reservation, the Nation financed, constructed, and now owns and operates a $35 million casino. Id., Vol. II, at 70. By building this casino, the Nation increased the number of people who travel to this otherwise remote and rural area. Id. at 70-71. To accommodate casino patrons and other reservation-related traffic, the Nation financed and built a gas station (the “Nation Station”) which is close to the casino and on the same federal trust land. In building the Station, the Nation incurred $1.5 million in construction costs, which included the purchase of a motor fuel handling system with tank storage and monitoring systems to make fuel available to customers. Id., Vol. Ill, at 22. The Nation Station is tribally-owned and operated, and, as of May 2000, eleven of its fifteen employees were Indians, with seven of those being Nation tribal members. Id. at 2-3.
The Nation submitted expert testimony, which the Secretary does not dispute, that “the ‘value marketed’ by [the] Nation Station results from the business generated by the casino and from employees of the casino and [the Nation’s] government and residents.” Id., Vol. II, at 86. This conclusion is supported by the undisputed evidence that seventy-three percent of the Nation Station’s fuel customers are casino patrons and casino employees and another eleven percent live or work elsewhere on the reservation. Id.; Id., Vol. V, at 46; Aple. Br. at 5. The Nation’s expert also reported that the Station is a location-dependent business because, “[b]ut for the casino, there would not be enough traffic to support [it] in its current location.” Aplt.App., Vol. II, at 86.
The Nation Station sells fuel at fair market prices. Therefore, it cannot and does not advertise an exemption from state fuel taxes. The Nation’s expert concluded that “the Nation is not ‘marketing a tax exemption’ because the price of fuel at the Nation Station is set above cost, including the Nation’s tax, and within 2