Cotton Petroleum Corp. v. New Mexico facts for kids
Quick facts for kids Cotton Petroleum Corp. v. New Mexico |
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| Argued November 30, 1988 Decided April 25, 1989 |
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| Full case name | Cotton Petroleum Corp. v. New Mexico |
| Citations | 490 U.S. 163 (more)
109 S. Ct. 1698; 104 L. Ed. 2d 209
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| Prior history | Cotton Petroleum v. State, 106 N.M. 517, 745 P.2d 1170 (N.M. Ct. App. 1987) |
| Holding | |
| There is no "proportionality requirement" that the amount collected from Tribes be equitable to the services rendered by the government. Further, current case law allows states can impose non-discriminatory taxes on non-Tribal entities that do business with Tribes, though Congress could offer immunity if it chose to do so. | |
| Court membership | |
| Case opinions | |
| Majority | Stevens, joined by Rehnquist, White, O'Connor, Scalia, Kennedy |
| Dissent | Blackmun, joined by Brennan, Marshall |
Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989), was a United States Supreme Court case that decided states may impose taxes on non-Tribal commercial activity that takes place on Tribal land.
Background
This case followed the earlier Supreme Court ruling in Merrion v. Jicarilla Apache Tribe (1982). In that case the high court approved of the Jicarilla Apache charging a severance tax for oil extraction on tribal land.
Accordingly, Cotton Petroleum, a non-Indian corporation, extracted oil and agreed to pay the tribe a 6% severance tax. However, the State of New Mexico collected an additional 8% severance tax, which it levied on all oil producers in the State. Cotton paid the state tax in protest and filed this lawsuit, asserting that the state tax was preempted by federal law.
Opinion of the court
The Court applied Bracker balancing, weighing state, Tribal and federal interests. Because the state provided Cotton $89,384 in services, the Court found sufficient state interest to justify the state tax. While amount collected in taxes, $2,293,953, far exceeded the value of the state services, the Court held there was no "proportionality requirement." The Court further explained that current case law allows states to impose non-discriminatory taxes on non-Tribal entities that do business with Tribes, noting that Congress could offer immunity if it chose to do so.
