This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
Laguna Industries, Inc., a corporation owned by the Pueblo of Laguna, contracted with Raytheon Services Company to provide technical, training, and management assistance to secure federal defense contracts. Raytheon performed these services on the Laguna Pueblo reservation, and gross receipts taxes were paid to the New Mexico Taxation and Revenue Department. Raytheon passed the tax costs to Laguna and later sought a refund, arguing that the Indian trader statutes preempted the state's authority to impose the tax (paras 3-6).
Procedural History
- District Court of Santa Fe County: Granted summary judgment in favor of Laguna Industries and Raytheon, holding that the Indian trader statutes preempted the state's authority to impose gross receipts taxes on services provided to the tribe (para 1).
Parties' Submissions
- Defendant-Appellant (New Mexico Taxation and Revenue Department): Argued that the Indian trader statutes do not apply to services, as they historically regulated only the trade of goods. The Department also contended that no other federal statutes preempted the state's authority to impose the tax (paras 1, 14).
- Plaintiffs-Appellees (Laguna Industries and Raytheon Services Company): Asserted that the Indian trader statutes preempted the state's gross receipts tax on services provided to the tribe, citing federal law and Supreme Court precedents that broadly interpret the statutes to include services (paras 1, 14-15).
Legal Issues
- Does the Indian trader statutes' preemption of state taxation extend to services provided to Indian tribes on reservations?
- Are there other federal statutes that preempt the state's authority to impose gross receipts taxes on such services?
Disposition
- The Court of Appeals of New Mexico affirmed the district court's decision, holding that the Indian trader statutes preempted the state's authority to impose gross receipts taxes on services provided to the tribe (para 37).
Reasons
Per Apodaca J. (Hartz J. concurring):
The Court held that the Indian trader statutes, which historically preempted state taxation of goods traded with Indian tribes, also apply to services. The Court reasoned that the statutes' purpose is to protect tribes from fraud and imposition, and this protection logically extends to services, which are equally susceptible to exploitation (paras 15-16, 29). The Court relied on Supreme Court precedents, including Warren Trading Post Co. v. Arizona Tax Commission and Central Machinery Co. v. Arizona State Tax Commission, which broadly interpreted the Indian trader statutes to preempt state taxation of transactions with tribes (paras 2, 12, 29).
The Court also noted that the regulations promulgated under the Indian trader statutes define "trading" to include services, further supporting the conclusion that the statutes preempt state taxation of services provided to tribes (paras 26-28). The Court rejected the Department's argument that the statutes were limited to goods, finding no basis for such a restrictive interpretation in the statutory language or historical context (paras 14-20).
Black J., dissenting:
Black J. dissented, arguing that the Indian trader statutes do not explicitly address services and that their historical context suggests they were intended to regulate only the trade of goods. Black J. contended that the Court should have conducted a factual inquiry into the state, federal, and tribal interests at stake before concluding that the statutes preempted the state's tax authority. He emphasized that the balancing of interests required by Supreme Court precedent, such as White Mountain Apache Tribe v. Bracker, was not adequately performed in this case (paras 39-56).