NMAGO 03-03.

• Case Date: January 23, 2003
• Court: New Mexico

New Mexico Attorney General Opinions 2003. NMAGO 03-03. January 23, 2003OPINION OF PATRICIA A. MADRID Attorney General OPINION No. 03-03BY: Elizabeth A. Glenn Assistant Attorney General TO: Rhonda G. Faught Secretary DesignateNew Mexico State Highway and Transportation Department P.O. Box 1149 Santa Fe, New Mexico 87504-1149 QUESTION: Do Indian tribes, pueblos and nations (collectively referred to as "tribes") have authority to impose taxes on contractors performing work for the State of New Mexico on the tribes' reservations? CONCLUSION: A tribe generally does not have inherent sovereign power to tax state contractors working on a highway project on a right-of-way easement granted to the state under federal law. FACTS: The question posed by the opinion request arose most recently in connection with a State Highway and Transportation Department ("SHTD") resurfacing project on a portion of I-40 east of the Arizona state line that runs through the Navajo Nation's trust lands. In response to an inquiry by SHTD's general counsel, the Nation has taken the position that it can charge its business activity tax on contractors performing services for the state on the resurfacing project. For purposes of this opinion, we assume that the contractors on which the Nation and other tribes are attempting to impose a tax are not members of the tribes. ANALYSIS: The principles governing the scope of a tribe's authority to tax nonmember individuals and entities have been developed and applied by the United States Supreme Court in a line of cases beginning with Montana v. United States, 450 U.S. 544 (1980). Montana, which the Court has described as "the pathmarking case concerning tribal civil authority over nonmembers," Strate v. A-1 Contractors, 520 U.S. 438, 445 (1997), held that the Crow Tribe was without authority to regulate hunting and fishing by non-Indians on land owned by non-Indians in fee simple within the reservation. The Montana opinion stated that, absent express congressional delegation, the exercise of inherent tribal power is limited to "what is necessary to protect tribal self-government or to control internal relations...." 450 U.S. at 564. As a result, "the inherent sovereign powers of an Indian tribe [generally] do not extend to the activities of nonmembers of the tribe." Id. at 565. Nevertheless, the opinion...