The United States Supreme Court (Supreme Court) has struck down the State of Washington’s innovative effort to indirectly tax motor vehicle fuel sold by the Yakama Nation on their reservation. The Yakama Nation imports fuel into the State of Washington for retail sale on the reservation. The fuel is transported to the reservation across Washington's public highways by a tribally-owned company. Washington attempted to assess a tax upon this tribal company for the act of importing fuel by ground transportation, but the Supreme Court intervened.
The Supreme Court held that the treaty between the United States and the Yakama tribe guarantee the Yakamas the “right, in common with citizens of the United States, to travel upon all public highways,” which was interpreted to include the right to transport goods to market free from of state-imposed burdens such as taxation. This decision has potentially broader applicability, since at least one other tribe (the Nez Perce) enjoys similar treaty language - and the free travel rights articulated by the Supreme Court for these tribes are not limited to motor vehicle fuel transportation. More generally, this case demonstrates the sympathetic reception that tribal interests often receive in disputes with state and local governments.
The Court's decision in Washington State Dept. of Licensing v. Cougar Den, Inc. may be accessed here.