king mountain tobacco taxes supreme court standing

King Mountain Tobacco is owned and operated by the Wheeler family, who are Yakama Nation citizens.

Yakama cigarette manufacturer King Mountain Tobacco is still on the hook for $58 million in federal excise taxes.

On June 10, the U.S. Supreme Court denied the company’s request for further review of the case. The decision comes a month after the U.S. Solicitor General opposed such a review.

A U.S. District Court awarded the federal government $58 million in unpaid federal taxes and the Ninth Circuit Court of Appeals upheld the ruling. The National Indian Law Library has published the rulings online.

King Mountain’s request was denied without comment. The vast majority of cases filed in the U.S. Supreme Court are disposed of by unsigned orders.

Rejection of review by the nation’s highest court may put to rest any question as to whether Native Americans on reservations are subject to federal taxation.

Ninth Circuit justices said the federal government has authority over tribes including taxation.

“After all, the federal government enjoys plenary and exclusive power over Indian tribes … And the right to tribal self-government is ultimately dependent on and subject to the broad powers of Congress,” justices wrote in their ruling.

Owned and operated by the Wheeler family — Yakama Nation citizens — King Mountain is located on tribal lands in White Swan.

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The Wheelers have argued that their company — which is licensed by the Yakama Nation — is exempted from federal excise taxes because it’s operated on tribal land held in federal trust and that the 1855 Yakama Treaty bars such taxation.

The Wheelers cited two previous federal tax rulings that were favorable to Yakama businessmen. One freed Harry Smiskin and his son, Kato, from criminal prosecution under the Cigarette Contraband Trafficking Act for being in possession of a large shipment of untaxed cigarettes transported to the reservation.

The other — which was heard and upheld by the U.S. Supreme Court earlier this year — freed Yakama fuel distributor Kip Ramsey from state taxation of out-of-state wholesale fuel brought onto the reservation.

Those rulings involved taxes assessed on the transportation of goods. Treaty provisions provide Yakamas free access to all roads and highways, allowing them to freely bring goods to market.

Lower courts disagreed that those rulings applied to King Mountain because federal excise taxes are based on the manufacturing of tobacco and the transportation of it, federal justices wrote in their rulings.