Court: States can tax fuel on reservations

WASHINGTON – The Supreme Court on Tuesday ruled that states have the power to tax fuel sold on Indian reservations.

In a 7-2 vote, the high court said Kansas can tax distributors who sell fuel at an Indian-owned and operated gas station near the Prairie Band Potawatomi tribe’s casino. Most of the Nation Station’s fuel customers are patrons of the casino, which is 15 miles north of Topeka, Kan.

Writing for the majority, Justice Clarence Thomas said the Denver-based 10th U.S. Circuit Court of Appeals was wrong in ruling that the tax violated tribal sovereignty.

“Kansas law makes clear that it is the distributor, rather than the retailer, that is liable to pay the motor fuel tax,” Thomas wrote. “While the distributors are ‘entitled’ to pass along the cost of the tax to downstream purchasers … they are not required to do so.”