Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102 S.Ct. 894, 71 L.Ed.2d 21 (1982)
J. Gregory Merrion and Robert L. Bayless, etc., et al., Petitioners,
v.
Jicarilla Apache Tribe, et al.
Amoco Production Company and Marathon Oil Company, Petitioners,
v.
Jicarilla Apache Indian Tribe, et al.
Nos. 80-11, 80-15.
Supreme Court of the United States
Argued March 30, 1981.
Reargued Nov. 4, 1981.
Decided Jan. 25, 1982.
Non-Indian lessees who produced oil and gas from within tribe's reservation pursuant to leases granted them under auspices of Secretary of Interior brought two suits, consolidated for trial, against the Jicarilla Apache Tribe and its tribal council seeking declaratory judgment and injunction that would prohibit enforcement of the tribe's oil and gas severance tax to be measured by the production from oil and gas wells within the reservation. The United States District Court for the District of New Mexico, H. Verale Payne, J., declared the tax illegal. The tribe appealed. The Court of Appeals for the Tenth Circuit, sitting en banc, 617 F.2d 537, reversed. Certiorari was granted. The Supreme Court, Justice Marshall, held that: (1) the tribe has the inherent power to impose a severance tax on mining activities as part of its power to govern and to pay for the costs of self-government; (2) even if the tribe's power to tax was derived solely from its power to exclude non-Indians from the reservation, the tribe has the authority to impose the tax; (3) the federal government did not deprive the tribe of its authority to impose the tax; (4) the severance tax does not violate the "negative implications" of the commerce clause; and (5) even if judicial scrutiny under the commerce clause was necessary, the tax would survive that scrutiny.
Affirmed.
Justice Stevens filed a dissenting opinion in which Chief Justice Burger and Justice Rehnquist joined.
*130 Syllabus (Omitted)
617 F.2d 537, 10th Cir., affirmed.
Jason W. Kellahin, Santa Fe, N.M., for petitioners in 80-11.
John R. Cooney, Albuquerque, N.M., for petitioners in 80-15.
Robert J. Nordhaus, Albuquerque, N.M., and Louis F. Claiborne, Washington, D.C., for respondents.
*133 Justice MARSHALL delivered the opinion of the Court.
Pursuant to long-term leases with the Jicarilla Apache Tribe, petitioners, 21 lessees, extract and produce oil and gas from the Tribe's reservation lands. In these two consolidated cases, petitioners challenge an ordinance enacted by the Tribe imposing a severance tax on "any oil and natural gas severed, saved and removed from Tribal lands." See Oil and Gas Severance Tax No. 77-0-02, App. 38. We granted certiorari to determine whether the Tribe has the authority to impose this tax, and, if so, whether the tax imposed by the Tribe violates the Commerce Clause.
I
The Jicarilla Apache Tribe resides on a reservation in northwestern New Mexico. Established by Executive Order in 1887, [FN1] the reservation contains 742,315 acres, all of which are held as tribal trust property. The 1887 Executive *134 Order set aside public lands in the Territory of New Mexico for the use and occupation of the Jicarilla Apache Indians, and contained no special restrictions except for a provision protecting pre- existing rights of bona fide settlers. [FN2] Approximately 2,100 individuals live on the reservation, with the majority residing in the town of Dulce, N.M., near the Colorado border.
The Tribe is organized under the Indian Reorganization Act of 1934, ch. 576, 48 Stat. 984, 25 U.S.C. §§461 et seq., which authorizes any tribe residing on a reservation to adopt a constitution and bylaws, subject to the approval of the Secretary of the Interior (Secretary). [FN3] The Tribe's first Constitution, approved by the Secretary on August 4, 1937, preserved all powers conferred by §16 of the Indian Reorganization Act of 1934, ch. 576, 48 Stat. 987, 25 U.S.C. §476. In 1968, the Tribe revised its Constitution to specify:
"The inherent powers of the Jicarilla Apache Tribe, including those conferred by Section 16 of the Act of June 18, 1934 (48 Stat. 984), as amended, shall vest in the tribal council and shall be exercised thereby subject only to limitations imposed by the Constitution of the United States, applicable Federal statutes and regulations of *135 the Department of the Interior, and the restrictions established by this revised constitution." Revised Constitution of the Jicarilla Apache Tribe, Art. XI, §1.
The Revised Constitution provides that "[t]he tribal council may enact ordinances to govern the development of tribal lands and other resources," Art. XI, §1(a)(3). It further provides that "[t]he tribal council may levy and collect taxes and fees on tribal members, and may enact ordinances, subject to approval by the Secretary of the Interior, to impose taxes and fees on non- members of the tribe doing business on the reservation," Art. XI, §1(e). The Revised Constitution was approved by the Secretary on February 13, 1969.
To develop tribal lands, the Tribe has executed mineral leases encompassing some 69% of the reservation land. Beginning in 1953, the petitioners entered into leases with the Tribe. The Commissioner of Indian Affairs, on behalf of the Secretary, approved these leases, as required by the Act of May 11, 1938, ch. 198, 52 Stat. 347, 25 U.S.C. §§396a-396g (1938 Act). In exchange for a cash bonus, royalties, and rents, the typical lease grants the lessee "the exclusive right and privilege to drill for, mine, extract, remove, and dispose of all the oil and natural gas deposits in or under" the leased land for as long as the minerals are produced in paying quantities. App. 22. Petitioners may use oil and gas in developing the lease without incurring the royalty. Id., at 24. In addition, the Tribe reserves the rights to use gas without charge for any of its buildings on the leased land, and to take its royalties in kind. Id., at 27-28. Petitioners' activities on the leased land have been subject to taxes imposed by the State of New Mexico on oil and gas severance and on oil and gas production equipment. Id., at 129. See Act of Mar. 3, 1927, ch. 299, §3, 44 Stat. 1347, 25 U.S.C. §398c (permitting state taxation of mineral production on Indian reservations) (1927 Act).
Pursuant to its Revised Constitution, the Tribal Council adopted an ordinance imposing a severance tax on oil and gas*136 production on tribal land. See App. 38. The ordinance was approved by the Secretary, through the Acting Director of the Bureau of Indian Affairs, on December 23, 1976. The tax applies to "any oil and natural gas severed, saved and removed from Tribal lands...." Ibid. The tax is assessed at the wellhead at $0.05 per million Btu's of gas produced and $0.29 per barrel of crude oil or condensate produced on the reservation, and it is due at the time of severance. Id., at 38-39. Oil and gas consumed by the lessees to develop their leases or received by the Tribe as in-kind royalty payments are exempted from the tax. Ibid.; Brief for Respondent Jicarilla Apache Tribe 59, n. 42.
In two separate actions, petitioners sought to enjoin enforcement of the tax by either the tribal authorities or the Secretary. The United States District Court for the District of New Mexico consolidated the cases, granted other lessees leave to intervene, and permanently enjoined enforcement of the tax. The District Court ruled that the Tribe lacked the authority to impose the tax, that only state and local authorities had the power to tax oil and gas production on Indian reservations, and that the tax violated the Commerce Clause.
The United States Court of Appeals for the Tenth Circuit, sitting en banc, reversed. 617 F.2d 537 (1980). [FN4] The Court of Appeals reasoned that the taxing power is an inherent attribute of tribal sovereignty that has not been divested by any treaty or Act of Congress, including the 1927 Act, 25 U.S.C. §398c. The court also found no Commerce Clause violation. We granted certiorari, 449 U.S. 820, 101 S.Ct. 71, 66 L.Ed.2d 21 (1980), and we now affirm the decision of the Court of Appeals.
II
Petitioners argue, and the dissent agrees, that an Indian tribe's authority to tax non-Indians who do business on the *137 reservation stems exclusively from its power to exclude such persons from tribal lands. Because the Tribe did not initially condition the leases upon the payment of a severance tax, petitioners assert that the Tribe is without authority to impose such a tax at a later time. We disagree with the premise that the power to tax derives only from the power to exclude. Even if that premise is accepted, however, we disagree with the conclusion that the Tribe lacks the power to impose the severance tax.
A
In Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980) (Colville), we addressed the Indian tribes' authority to impose taxes on non-Indians doing business on the reservation. We held that "[t]he power to tax transactions occurring on trust lands and significantly involving a tribe or its members is a fundamental attribute of sovereignty which the tribes retain unless divested of it by federal law or necessary implication of their dependent status." Id., at 152, 100 S.Ct. at 2080-81. The power to tax is an essential attribute of Indian sovereignty because it is a necessary instrument of self- government and territorial management. This power enables a tribal government to raise revenues for its essential services. The power does not derive solely from the Indian tribe's power to exclude non-Indians from tribal lands. Instead, it derives from the tribe's general authority, as sovereign, to control economic activity within its jurisdiction, and to defray the cost of providing governmental services by requiring contributions from persons or enterprises engaged in economic activities within that jurisdiction. See, e.g., Gibbons v. Ogden, 9 Wheat. 1, 199, 6 L.Ed. 23 (1824).
The petitioners avail themselves of the "substantial privilege of carrying on business" on the reservation. Mobil Oil Corp. v. Commissioner of Taxes, 445 U.S. 425, 437, 100 S.Ct. 1223, 1231, 63 L.Ed.2d 510 (1980); Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444-445, 61 S.Ct. 246, 249-50, 85 L.Ed. 267 (1940). They benefit from the provision of police protection and other governmental services, as well as from " 'the advantages *138 of a civilized society' " that are assured by the existence of tribal government. Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U.S. 207, 228, 100 S.Ct. 2109, 2122, 65 L.Ed.2d 66 (1980) (quoting Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 445, 99 S.Ct. 1813, 1819-20, 60 L.Ed.2d 336 (1979)). Numerous other governmental entities levy a general revenue tax similar to that imposed by the Jicarilla Tribe when they provide comparable services. Under these circumstances, there is nothing exceptional in requiring petitioners to contribute through taxes to the general cost of tribal government. [FN5] Cf. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 624-629, 101 S.Ct. 2946, 2957-2960, 69 L.Ed.2d 884 (1981); id., at 647, 101 S.Ct., at 2969 (Blackmun, J., dissenting); Mobil Oil Corp. v. Commissioner of Taxes, supra, 445 U.S. at 436-437, 100 S.Ct. at 1231.
As we observed in Colville, supra, the tribe's interest in levying taxes on nonmembers to raise "revenues for essential governmental programs ... is strongest when the revenues are derived from value generated on the reservation by activities involving the Tribes and when the taxpayer is the recipient of tribal services." 447 U.S., at 156-157, 100 S.Ct., at 2082- 83. This surely is the case here. The mere fact that the government imposing the tax also enjoys rents and royalties as the lessor of the mineral lands does not undermine the government's authority to impose the tax. See infra, at 906- 907. The royalty payments from the mineral leases are paid to the Tribe in its role as partner in petitioners' commercial venture. The severance tax, in contrast, is petitioners' contribution "to the general cost of providing governmental services." Commonwealth Edison Co. v. Montana, supra, at 623, 101 S.Ct., at 2956. State governments commonly receive both royalty payments and severance taxes from lessees of mineral lands within their borders.
*139 Viewing the taxing power of Indian tribes as an essential instrument of self-government and territorial management has been a shared assumption of all three branches of the Federal Government. Cf. Colville, supra, 447 U.S., at 153, 100 S.Ct., at 2081. In Colville, the Court relied in part on a 1934 opinion of the Solicitor for the Department of the Interior. In this opinion, the Solicitor recognized that, in the absence of congressional action to the contrary, the tribes' sovereign power to tax " 'may be exercised over members of the tribe and over nonmembers, so far as such nonmembers may accept privileges of trade, residence, etc., to which taxes may be attached as conditions.' " 447 U.S., at 153, 100 S.Ct., at 2081 (quoting Powers of Indian Tribes, 55 I.D. 14, 46 (1934)). Colville further noted that official executive pronouncements have repeatedly recognized that "Indian tribes possess a broad measure of civil jurisdiction over the activities of non-Indians on Indian reservation lands in which the tribes have a significant interest ..., including jurisdiction to tax." 447 U.S., at 152-153, 100 S.Ct., at 2080-2081 (citing 23 Op.Atty.Gen. 214 (1900); 17 Op.Atty.Gen. 134 (1881); 7 Op.Atty.Gen. 174 (1855)). [FN6]
Similarly, Congress has acknowledged that the tribal power to tax is one of the tools necessary to self-government and territorial control. As early as 1879, the Senate Judiciary *140 Committee acknowledged the validity of a tax imposed by the Chickasaw Nation on non-Indians legitimately within its territory:
"We have considered [Indian tribes] as invested with the right of self- government and jurisdiction over the persons and property within the limits of the territory they occupy, except so far as that jurisdiction has been restrained and abridged by treaty or act of Congress. Subject to the supervisory control of the Federal Government, they may enact the requisite legislation to maintain peace and good order, improve their condition, establish school systems, and aid their people in their efforts to acquire the arts of civilized life; and they undoubtedly possess the inherent right to resort to taxation to raise the necessary revenue for the accomplishment of these vitally important objects – a right not in any sense derived from the Government of the United States." S.Rep.No.698, 45th Cong., 3d Sess., 1-2 (1879) (emphasis added).
Thus, the views of the three federal branches of government, as well as general principles of taxation, confirm that Indian tribes enjoy authority to finance their governmental services through taxation of non-Indians who benefit from those services. Indeed, the conception of Indian sovereignty that this Court has consistently reaffirmed permits no other conclusion. As we observed in United States v. Mazurie, 419 U.S. 544, 557, 95 S.Ct. 710, 711, 42 L.Ed.2d 706 (1975), "Indian tribes within 'Indian country' are a good deal more than 'private, voluntary organizations.' " They "are unique aggregations possessing attributes of sovereignty over both their members and their territory." Ibid. See, e.g., Worcester v. Georgia, 6 Pet. 515, 557, 8 L.Ed. 483 (1832); Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation, 231 F.2d 89, 92, 99 (CA8 1956); Crabtree v. Madden, 54 F. 426, 428-429 (CA8 1893); Cohen, The Spanish Origin of Indian Rights in the Law of the United States, in The Legal Conscience 230, 234 (L. Cohen ed. *141 1960). Adhering to this understanding, we conclude that the Tribe's authority to tax non-Indians who conduct business on the reservation does not simply derive from the Tribe's power to exclude such persons, but is an inherent power necessary to tribal self-government and territorial management.
Of course, the Tribe's authority to tax nonmembers is subject to constraints not imposed on other governmental entities: the Federal Government can take away this power, and the Tribe must obtain the approval of the Secretary before any tax on nonmembers can take effect. These additional constraints minimize potential concern that Indian tribes will exercise the power to tax in an unfair or unprincipled manner, and ensure that any exercise of the tribal power to tax will be consistent with national policies.
We are not persuaded by the dissent's attempt to limit an Indian tribe's authority to tax non-Indians by asserting that its only source is the tribe's power to exclude such persons from tribal lands. Limiting the tribes' authority to tax in this manner contradicts the conception that Indian tribes are domestic, dependent nations, as well as the common understanding that the sovereign taxing power is a tool for raising revenue necessary to cover the costs of government.
Nor are we persuaded by the dissent that three early decisions upholding tribal power to tax nonmembers support this limitation. Post, at 917-920, discussing Morris v. Hitchcock, 194 U.S. 384, 24 S.Ct. 712, 48 L.Ed. 1030 (1904); Buster v. Wright, 135 F. 947 (CA8 1905), appeal dism'd, 203 U.S. 599, 27 S.Ct. 777, 51 L.Ed. 334 (1906); Maxey v. Wright, 3 Ind.T. 243, 247-250, 54 S.W. 807, 809 (Ct.App.Ind.T.), aff'd, 105 F. 1003 (CA8 1900). In discussing these cases, the dissent correctly notes that a hallmark of Indian sovereignty is the power to exclude non-Indians from Indian lands, and that this power provides a basis for tribal authority to tax. None of these cases, however, establishes that the authority to tax derives solely from the power to exclude. Instead, these cases demonstrate that a tribe has the power to tax nonmembers only to the extent the nonmember enjoys the *142 privilege of trade or other activity on the reservation to which the tribe can attach a tax. This limitation on tribal taxing authority exists not because the tribe has the power to exclude nonmembers, but because the limited authority that a tribe may exercise over nonmembers does not arise until the nonmember enters the tribal jurisdiction. We do not question that there is a significant territorial component to tribal power: a tribe has no authority over a nonmember until the nonmember enters tribal lands or conducts business with the tribe. However, we do not believe that this territorial component to Indian taxing power, which is discussed in these early cases, means that the tribal authority to tax derives solely from the tribe's power to exclude nonmembers from tribal lands.
Morris v. Hitchcock, for example, suggests that the taxing power is a legitimate instrument for raising revenue, and that a tribe may exercise this power over non-Indians who receive privileges from the tribe, such as the right to trade on Indian land. In Morris, the Court approved a tax on cattle grazing and relied in part on a Report to the Senate by the Committee on the Judiciary, which found no legal defect in previous tribal tax legislation having "a twofold object – to prevent the intrusion of unauthorized persons into the territory of the Chickasaw Nation, and to raise revenue." 194 U.S., at 389, 24 S.Ct., at 714 (emphasis added). In Maxey v. Wright, the question of Indian sovereignty was not even raised: the decision turned on the construction of a treaty denying the Tribe any governing or jurisdictional authority over nonmembers. 3 Ind.T., at 247-248, 54 S.W., at 809. [FN7]
*143 Finally, the decision in Buster v. Wright actually undermines the theory that the tribes' taxing authority derives solely from the power to exclude non-Indians from tribal lands. Under this theory, a non-Indian who establishes lawful presence in Indian territory could avoid paying a tribal tax by claiming that no residual portion of the power to exclude supports the tax. This result was explicitly rejected in Buster v. Wright. In Buster, deeds to individual lots in Indian territory had been granted to non-Indian residents, and cities and towns had been incorporated. As a result, Congress had expressly prohibited the Tribe from removing these non-Indian residents. Even though the ownership of land and the creation of local governments by non-Indians established their legitimate presence on Indian land, the court held that the Tribe retained its power to tax. The court concluded that "[n]either the United States, nor a state, nor any other sovereignty loses the power to govern the people within its borders by the existence of towns and cities therein endowed with the usual powers of municipalities, nor by the ownership nor occupancy of the land within its territorial jurisdiction by citizens or foreigners." 135 F., at 952 (emphasis *144 added). [FN8] This result confirms that the Tribe's authority to tax derives not from its power to exclude, but from its power to govern and to raise revenues to pay for the costs of government.
We choose not to embrace a new restriction on the extent of the tribal authority to tax, which is based on a questionable interpretation of three early cases. Instead, based on the views of each of the federal branches, general principles of taxation, and the conception of Indian tribes as domestic, dependent nations, we conclude that the Tribe has the authority to impose a severance tax on the mining activities of petitioners as part of its power to govern and to pay for the costs of self-government.
B
Alternatively, if we accept the argument, advanced by petitioners and the dissent, that the Tribe's authority to tax derives solely from its power to exclude non-Indians from the reservation, we conclude that the Tribe has the authority to impose the severance tax challenged here. Nonmembers who lawfully enter tribal lands remain subject to the tribe's power to exclude them. This power necessarily includes the lesser power to place conditions on entry, on continued presence, or on reservation conduct, such as a tax on business activities conducted on the reservation. When a tribe grants a non-Indian the right to be on Indian land, the tribe agrees not to exercise its ultimate power to oust the non-Indian as long as the non-Indian complies with the initial conditions of entry. However, it does not follow that the lawful property right to be on Indian land also immunizes the non-Indian from the tribe's exercise of its lesser-included power to tax or to *145 place other conditions on the non-Indian's conduct or continued presence on the reservation. [FN9] A nonmember who enters the jurisdiction of the tribe remains subject to the risk that the tribe will later exercise its sovereign power. The fact that the tribe chooses not to exercise its power to tax when it initially grants a non-Indian entry onto the reservation does not permanently divest the tribe of its authority to impose such a tax. [FN10]
Petitioners argue that their leaseholds entitle them to enter the reservation and exempt them from further exercises of the Tribe's sovereign authority. Similarly, the dissent asserts that the Tribe has lost the power to tax petitioners' mining activities because it has leased to them the use of the mineral lands and such rights of access to the reservation as might be necessary to enjoy the leases. Post, at 927-929. [FN11] However, this conclusion is not compelled by linking the taxing power to the power to exclude. Instead, it is based on additional assumptions and confusions about the consequences of the commercial arrangement between petitioners and the Tribe.
Most important, petitioners and the dissent confuse the Tribe's role as commercial partner with its role as sovereign. [FN12]*146 This confusion relegates the powers of sovereignty to the bargaining process undertaken in each of the sovereign's commercial agreements. It is one thing to find that the Tribe has agreed to sell the right to use the land and take from it valuable minerals; it is quite another to find that the Tribe has abandoned its sovereign powers simply because it has not expressly reserved them through a contract.
Confusing these two results denigrates Indian sovereignty. Indeed, the dissent apparently views the tribal power to exclude, as well as the derivative authority to tax, as merely the power possessed by any individual landowner or any social group to attach conditions, including a "tax" or fee, to the entry by a stranger onto private land or into the social group, and not as a sovereign power. The dissent does pay lip service to the established views that Indian tribes retain those fundamental attributes of sovereignty, including the power to tax transactions that occur on tribal lands, which have not been divested by Congress or by necessary implication of the tribe's dependent status, see Colville, 447 U.S., at 152, 100 S.Ct., at 2080, and that tribes "are a good deal more than 'private, voluntary organizations.' " United States v. Mazurie, 419 U.S., at 557, 95 S.Ct., at 718. However, in arguing that the Tribe somehow "lost" its power to tax petitioners by not including *147 a taxing provision in the original leases or otherwise notifying petitioners that the Tribe retained and might later exercise its sovereign right to tax them, the dissent attaches little significance to the sovereign nature of the tribal authority to tax, and it obviously views tribal authority as little more than a landowner's contractual right. This overly restrictive view of tribal sovereignty is further reflected in the dissent's refusal to apply established principles for determining whether other governmental bodies have waived a sovereign power through contract. See post, at 928-929, n. 50. See also infra, at 907.
Moreover, the dissent implies that the power to tax depends on the consent of the taxed as well as on the Tribe's power to exclude non-Indians. Whatever place consent may have in contractual matters and in the creation of democratic governments, it has little if any role in measuring the validity of an exercise of legitimate sovereign authority. Requiring the consent of the entrant deposits in the hands of the excludable non-Indian the source of the tribe's power, when the power instead derives from sovereignty itself. Only the Federal Government may limit a tribe's exercise of its sovereign authority. E.g., United States v. Wheeler, 435 U.S. 313, 322, 98 S.Ct. 1079, 1085, 55 L.Ed.2d 303 (1978). [FN13] Indian sovereignty is not conditioned on the assent of a nonmember; to the contrary, the nonmember's presence and conduct on Indian lands are conditioned by the limitations the tribe may choose to impose.
Viewed in this light, the absence of a reference to the tax in the leases themselves hardly impairs the Tribe's authority to impose the tax. Contractual arrangements remain subject to subsequent legislation by the presiding sovereign. See, e.g., Veix v. Sixth Ward Building & Loan Assn. of *148 Newark, 310 U.S. 32, 60 S.Ct. 792, 84 L.Ed. 1061 (1940); Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413 (1934). Even where the contract at issue requires payment of a royalty for a license or franchise issued by the governmental entity, the government's power to tax remains unless it "has been specifically surrendered in terms which admit of no other reasonable interpretation." St. Louis v. United R. Co., 210 U.S. 266, 280, 28 S.Ct. 630, 634, 52 L.Ed. 1054 (1908).
To state that Indian sovereignty is different than that of Federal, State, or local Governments, see post, at 928-929, n. 50, does not justify ignoring the principles announced by this Court for determining whether a sovereign has waived its taxing authority in cases involving city, state, and federal taxes imposed under similar circumstances. Each of these governments has different attributes of sovereignty, which also may derive from different sources. These differences, however, do not alter the principles for determining whether any of these governments has waived a sovereign power through contract, and we perceive no principled reason for holding that the different attributes of Indian sovereignty require different treatment in this regard. Without regard to its source, sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign's jurisdiction, and will remain intact unless surrendered in unmistakable terms.
No claim is asserted in this litigation, nor could one be, that petitioners' leases contain the clear and unmistakable surrender of taxing power required for its extinction. We could find a waiver of the Tribe's taxing power only if we inferred it from silence in the leases. To presume that a sovereign forever waives the right to exercise one of its sovereign powers unless it expressly reserves the right to exercise that power in a commercial agreement turns the concept of sovereignty on its head, and we do not adopt this analysis. [FN14]
*149 C
The Tribe has the inherent power to impose the severance tax on petitioners, whether this power derives from the Tribe's power of self-government or from its power to exclude. Because Congress may limit tribal sovereignty, we now review petitioners' argument that Congress, when it enacted two federal Acts governing Indians and various pieces of federal energy legislation, deprived the Tribe of its authority to impose the severance tax.
In Colville, we concluded that the "widely held understanding within the Federal Government has always been that federal law to date has not worked a divestiture of Indian taxing power." 447 U.S., at 152, 100 S.Ct., at 2080 (emphasis added). Moreover, we noted that "[n]o federal statute cited to us shows any congressional departure from this view." Id., at 153, 100 S.Ct., at 2081. Likewise, petitioners can cite to no statute that specifically divests the Tribe of its power to impose the severance tax on their mining activities. Instead, petitioners argue that Congress implicitly took away this power when it enacted the Acts and various pieces of legislation on which petitioners rely. Before reviewing this argument, we reiterate here our admonition in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 60, 98 S.Ct. 1670, 1678, 56 L.Ed.2d 106 (1978): "a proper respect both for tribal sovereignty itself and for the plenary authority of Congress in this area cautions that we tread lightly in the absence of clear indications of legislative intent."
*150 Petitioners argue that Congress pre-empted the Tribe's power to impose a severance tax when it enacted the 1938 Act, 25 U.S.C. §§396a- 396g. In essence, petitioners argue that the tax constitutes an additional burden on lessees that is inconsistent with the Act's regulatory scheme for leasing and developing oil and gas reserves on Indian land. This Act, and the regulations promulgated by the Department of the Interior for its enforcement, establish the procedures to be followed for leasing oil and gas interests on tribal lands. However, the proviso to 25 U.S.C. §396b states that "the foregoing provisions shall in no manner restrict the right of tribes ... to lease lands for mining purposes ... in accordance with the provisions of any constitution and charter adopted by any Indian tribe pursuant to sections 461, 462, 463, [464-475, 476-478], and 479 of this title" (emphasis added). [FN15] Therefore, this Act does not prohibit the Tribe from imposing a severance tax on petitioners' mining activities pursuant to its Revised Constitution, when both the Revised Constitution and the ordinance authorizing the tax are approved by the Secretary. [FN16]
Petitioners also assert that the 1927 Act, 25 U.S.C. §§398a- 398e, divested the Tribe's taxing power. We disagree. The 1927 Act permits state taxation of mineral lessees *151 on Executive Order reservations, but it indicates no change in the taxing power of the affected tribes. See 25 U.S.C. §398c. Without mentioning the tribal authority to tax, the Act authorizes state taxation of royalties from mineral production on all Indian lands. Petitioners argue that the Act transferred the Indian power to tax mineral production to the States in exchange for the royalties assured the tribes. This claim not only lacks any supporting evidence in the legislative history, it also deviates from settled principles of taxation: different sovereigns can enjoy powers to tax the same transactions. Thus, the mere existence of state authority to tax does not deprive the Indian tribe of its power to tax. Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (CA9 1976), cert. denied, 430 U.S. 983, 97 S.Ct. 1678, 52 L.Ed.2d 377 (1977). Cf. Colville, 447 U.S., at 158, 100 S.Ct., at 2084 ("There is no direct conflict between the state and tribal schemes, since each government is free to impose its taxes without ousting the other"). [FN17]
Finally, petitioners contend that tribal taxation of oil and gas conflicts with national energy policies, and therefore the tribal tax is pre- empted by federal law. Again, petitioners cite no specific federal statute restricting Indian sovereignty. Nor do they explain why state taxation of the same type of activity escapes the asserted conflict with federal policy. Cf. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 101 S.Ct. 2946, 69 L.Ed.2d 884 (1981). Indeed, rather than forbidding tribal severance taxes, Congress has included taxes imposed by an Indian *152 tribe in its definition of costs that may be recovered under federal energy pricing regulations. Natural Gas Policy Act of 1978, Pub.L. 95-621, §§110(a), (c)(1), 92 Stat. 3368, 15 U.S.C. §§3320(a), (c)(1) (1976 ed., Supp.IV). Although this inclusion may not reflect Congress' view with respect to the source of a tribe's power to impose a severance tax, [FN18] it surely indicates that imposing such a tax would not contravene federal energy policy and that the tribal authority to do so is not implicitly divested by that Act.
We find no "clear indications" that Congress has implicitly deprived the Tribe of its power to impose the severance tax. In any event, if there were ambiguity on this point, the doubt would benefit the Tribe, for "[a]mbiguities in federal law have been construed generously in order to comport with ... traditional notions of sovereignty and with the federal policy of encouraging tribal independence." White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 143-144, 100 S.Ct. 2578, 2583-2584, 65 L.Ed.2d 665 (1980). Accordingly, we find that the Federal Government has not divested the Tribe of its inherent authority to tax mining activities on its land, whether this authority derives from the Tribe's power of self-government or from its power to exclude.
III
Finding no defect in the Tribe's exercise of its taxing power, we now address petitioners' contention that the severance tax violates the "negative implications" of the Commerce Clause because it taxes an activity that is an integral *153 part of the flow of commerce, discriminates against interstate commerce, and imposes a multiple burden on interstate commerce. At the outset, we note that reviewing tribal action under the Interstate Commerce Clause is not without conceptual difficulties. E.g., nn. 21 and 24, infra. Apparently recognizing these difficulties, the Solicitor General, on behalf of the Secretary, argues that the language, [FN19] the structure, and the purposes of the Commerce Clause support the conclusion that the Commerce Clause does not, of its own force, limit Indian tribes in their dealings with non-Indians. Brief for Secretary of Interior 35-40. The Solicitor General reasons that the Framers did not intend "the courts, through the Commerce Clause, to impose their own views of the proper relationship between Indians and non-Indians and to strike down measures adopted by a tribe with which the political departments of government had not seen fit to disagree." Id., at 39. Instead, where tribal legislation is inimical to the national welfare, the Solicitor asserts that the Framers contemplated that the remedies would be the negotiation or renegotiation of treaties, the enactment of legislation governing trade and other relations, or the exertion of superior force by the United States Government. Id., at 38-39. Using similar reasoning, the Solicitor suggests that if the Commerce Clause does impose restrictions on tribal activity, those restrictions must arise from the Indian Commerce Clause, and not its interstate counterpart. Id., at 40-43.
To date, however, this Court has relied on the Indian Commerce Clause as a shield to protect Indian tribes from state *154 and local interference, and has not relied on the Clause to authorize tribal regulation of commerce without any constitutional restraints. We see no need to break new ground in this area today: even if we assume that tribal action is subject to the limitations of the Interstate Commerce Clause, this tax does not violate the "negative implications" of that Clause.
A
A state tax may violate the "negative implications" of the Interstate Commerce Clause by unduly burdening or discriminating against interstate commerce. See, e.g., Commonwealth Edison Co. v. Montana, 453 U.S. 609, 101 S.Ct. 2946, 69 L.Ed.2d 884 (1981); Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977). Judicial review of state taxes under the Interstate Commerce Clause is intended to ensure that States do not disrupt or burden interstate commerce when Congress' power remains unexercised: it protects the free flow of commerce, and thereby safeguards Congress' latent power from encroachment by the several States.
However, we only engage in this review when Congress has not acted or purported to act. See, e.g., Prudential Insurance Co. v. Benjamin, 328 U.S. 408, 421-427, 66 S.Ct. 1142, 1150-1153, 90 L.Ed. 1342 (1946). Once Congress acts, courts are not free to review state taxes or other regulations under the dormant Commerce Clause. When Congress has struck the balance it deems appropriate, the courts are no longer needed to prevent States from burdening commerce, and it matters not that the courts would invalidate the state tax or regulation under the Commerce Clause in the absence of congressional action. See Prudential Insurance Co. v. Benjamin, supra, at 431, 66 S.Ct. at 1155-56. [FN20] Courts are *155 final arbiters under the Commerce Clause only when Congress has not acted. See Japan Line, Ltd. v. County of Los Angeles, 441 U.S., at 454, 99 S.Ct., at 1824.
Here, Congress has affirmatively acted by providing a series of federal checkpoints that must be cleared before a tribal tax can take effect. [FN21] Under the Indian Reorganization Act, 25 U.S.C. §§476, 477, a tribe must obtain approval from the Secretary before it adopts or revises its constitution to announce its intention to tax nonmembers. Further, before the ordinance imposing the severance tax challenged here could take effect, the Tribe was required again to obtain approval from the Secretary. See Revised Constitution of the Jicarilla Tribe, Art. XI, §§1(e), 2. Cf. 25 U.S.C. §§476, 477; 25 C.F.R. §171.29 (1980) (implementing the proviso to 25 U.S.C. §369b, quoted in n. 15, supra).
As we noted earlier, the severance tax challenged by petitioners was enacted in accordance with this congressional scheme. Both the Tribe's Revised Constitution and the challenged tax ordinance received the requisite approval from the Secretary. This course of events fulfilled the administrative process established by Congress to monitor such exercises of tribal authority. As a result, this tribal tax comes to us in a *156 posture significantly different from a challenged state tax, which does not need specific federal approval to take effect, and which therefore requires, in the absence of congressional ratification, judicial review to ensure that it does not unduly burden or discriminate against interstate commerce. Judicial review of the Indian tax measure, in contrast, would duplicate the administrative review called for by the congressional scheme.
Finally, Congress is well aware that Indian tribes impose mineral severance taxes such as the one challenged by petitioners. See Natural Gas Policy Act of 1978, 15 U.S.C. §§3320(a), (c)(1) (1976 ed., Supp.IV). Congress, of course, retains plenary power to limit tribal taxing authority or to alter the current scheme under which the tribes may impose taxes. However, it is not our function nor our prerogative to strike down a tax that has traveled through the precise channels established by Congress, and has obtained the specific approval of the Secretary.
B
The tax challenged here would survive judicial scrutiny under the Interstate Commerce Clause, even if such scrutiny were necessary. In Complete Auto Transit, Inc. v. Brady, supra, 430 U.S. at 279, 97 S.Ct. at 1079, we held that a state tax on activities connected to interstate commerce is sustainable if it "is applied to an activity with a substantial nexus with the taxing State, is fairly apportioned, does not discriminate against interstate commerce, and is fairly related to the services provided by the State." Petitioners do not question that the tax on the severance of minerals from the mines [FN22] meets the first and the *157 second tests: the mining activities taxed pursuant to the ordinance occur entirely on reservation land. Furthermore, petitioners do not challenge the tax on the ground that the amount of the tax is not fairly related to the services provided by the Tribe. See Supplemental Brief for Petitioners in No. 80-15, pp. 11, 17-20. [FN23]
Instead, petitioners focus their attack on the third factor, and argue that the tax discriminates against interstate commerce. In essence, petitioners argue that the language "sold or transported off the reservation" exempts from taxation minerals sold on the reservation, kept on the reservation for use by individual members of the Tribe, and minerals taken by the Tribe on the reservation as in-kind royalty. Although petitioners admit that no sales have occurred on the reservation to date, they argue that the Tribe might induce private industry to locate on the reservation to take advantage of this allegedly discriminatory taxing policy. We do not accept petitioners' arguments; instead, we agree with the Tribe, the Solicitor General, and the Court of Appeals that the tax is imposed on minerals sold on the reservation or transported off the reservation before sale. See 617 F.2d, at 546. Cf. n. 22, supra. [FN24] Under this interpretation, the tax does not *158 treat minerals transported away from the reservation differently than it treats minerals that might be sold on the reservation. Nor does the Tribe's tax ordinance exempt minerals ultimately received by individual members of the Tribe. The ordinance does exempt minerals received by the Tribe as in-kind payments on the leases and used for tribal purposes, [FN25] but this exemption merely avoids the administrative make-work that would ensue if the Tribe, as local government, taxed the amount of minerals that the Tribe, as commercial partner, received in royalty payments. Therefore, this exemption cannot be deemed a discriminatory preference for local commerce. [FN26]
*159 IV
In Worcester v. Georgia, 6 Pet., at 559, 8 L.Ed. 483, Chief Justice Marshall observed that Indian tribes had "always been considered as distinct, independent political communities, retaining their original natural rights." Although the tribes are subject to the authority of the Federal Government, the "weaker power does not surrender its independence – its right to self- government, by associating with a stronger, and taking its protection." Id., at 561, 8 L.Ed. 483. Adhering to this understanding, we conclude that the Tribe did not surrender its authority to tax the mining activities of petitioners, whether this authority is deemed to arise from the Tribe's inherent power of self-government or from its inherent power to exclude nonmembers. Therefore, the Tribe may enforce its severance tax unless and until Congress divests this power, an action that Congress has not taken to date. Finally, the severance tax imposed by the Tribe cannot be invalidated on the ground that it violates the "negative implications" of the Commerce Clause.
Affirmed.
Footnotes of the Court:
FN1. See 1 C. Kappler, Indian Affairs, Laws and Treaties 875 (1904) (Order of President Cleveland). Two earlier Orders setting aside land for the Tribe had been canceled. See id., at 874-875 (Orders of Presidents Hayes and Grant). The boundaries of the reservation were redefined or clarified by Executive Orders issued by President Theodore Roosevelt on November 11, 1907, and January 28, 1908, and by President Taft on February 17, 1912. See 3 C. Kappler, Indian Affairs, Laws and Treaties 681, 682, 684, 685 (1913).
The fact that the Jicarilla Apache Reservation was established by Executive Order rather than by treaty or statute does not affect our analysis; the Tribe's sovereign power is not affected by the manner in which its reservation was created. E.g., Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980).
FN2. The proviso reads as follows: "this order shall not be so construed as to deprive any bona fide settler of any valid rights he may have acquired under the law of the United States providing for the disposition of the public domain." 1 C. Kappler, supra, at 875.
FN3. The Tribe is also chartered under the Indian Reorganization Act of 1934, ch. 576, 48 Stat. 988, 25 U.S.C. §477, which permits the Secretary to issue to an Indian tribe a charter of incorporation that may give the tribe the power to purchase, manage, operate, and dispose of its property.
FN4. Two judges dissented. Both argued that tribal sovereignty does not encompass the power to tax non-Indian lessees, 617 F.2d, at 551-556 (Seth, C. J., dissenting); id., at 556-565 (Barrett, J., dissenting) (also arguing the tax violates the Commerce Clause).
FN5. Through various Acts governing Indian tribes, Congress has expressed the purpose of "fostering tribal self-government." Colville, 447 U.S., at 155, 100 S.Ct., at 2081. We agree with Judge McKay's observation that "[i]t simply does not make sense to expect the tribes to carry out municipal functions approved and mandated by Congress without being able to exercise at least minimal taxing powers, whether they take the form of real estate taxes, leasehold taxes or severance taxes." 617 F.2d, at 550 (McKay, J., concurring).
FN6. Moreover, in its revision of the classic treatise on Indian Law, the Department of the Interior advances the view that the Indian tribes' power to tax is not limited by the power to exclude. See U.S. Solicitor for Dept. of Interior, Federal Indian Law 438 (1958) ("The power to tax does not depend upon the power to remove and has been upheld where there was no power in the tribe to remove the taxpayer from the tribal jurisdiction") (footnote omitted). See also F. Cohen, Handbook of Federal Indian Law 142 (1942) ("One of the powers essential to the maintenance of any government is the power to levy taxes. That this power is an inherent attribute of tribal sovereignty which continues unless withdrawn or limited by treaty or by act of Congress is a proposition which has never been successfully disputed") (footnote omitted).
FN7. The governing treaty in Maxey v. Wright restricted the tribal right of self-government and jurisdiction to members of the Creek or Seminole Tribes. The court relied, at least in part, on opinions of the Attorney General interpreting this treaty. For example, one such opinion stated that, whatever the meaning of the clause limiting to tribal members the Tribes' unrestricted rights of self-government and jurisdiction, it did
" 'not limit the right of these tribes to pass upon the question, who ... shall share their occupancy, and upon what terms. That is a question which all private persons are allowed to decide for themselves; and even wild animals, not men, have a certain respect paid to the instinct which in this respect they share with man. The serious words "jurisdiction" and "self- government" are scarcely appropriate to the right of a hotel keeper to prescribe rules and charges for persons who become his fellow occupants.' " 3 Ind.T., at 250, 54 S.W., at 809 (quoting 18 Op.Atty.Gen. 4, 36, 37 (1884)).
The court, as well as the opinion of the Attorney General, found that the Tribes' "natural instinct" to set terms on occupancy was unaltered by the treaty. Neither the court nor the Attorney General addressed the scope of Indian sovereignty when unlimited by treaty; instead, they identified a tribe's right, as a social group, to exclude intruders and place conditions on their occupancy. The court's dependence on this reasoning hardly bears on the more general question posed here: what is the source of the Indian tribes' sovereign power to tax absent a restriction by treaty or other federal law?
FN8. Both the classic treatise on Indian Law and its subsequent revision by the Department of the Interior, see n. 6, supra, agree with this reading of Buster v. Wright. Federal Indian Law, supra, n. 6, at 438; Cohen, supra, n. 6, at 142 (both citing Buster v. Wright for the proposition that the power to tax is an inherent sovereign power not dependent on the power to exclude).
FN9. See also Barta v. Oglala Sioux Tribe of Pine Ridge Reservation, 259 F.2d 553 (CA8 1958) (lessees of tribal lands subject to Indian tax on use of land).
FN10. Here, the leases extend for as long as minerals are produced in paying quantities, in other words, until the resources are depleted. Thus, under the dissent's approach, the Tribe would never have the power to tax petitioners regardless of the financial burden to the Tribe of providing and maintaining governmental services for the benefit of petitioners.
FN11. But see Buster v. Wright, 135 F., at 958:
"The ultimate conclusion of the whole matter is that purchasers of lots in town sites in towns or cities within the original limits of the Creek Nation, who are in lawful possession of their lots, are still subject to the laws of that nation prescribing permit taxes for the exercise by noncitizens of the privilege of conducting business in those towns...."
FN12. In contrast, the 1958 treatise on Indian law written by the United States Solicitor for the Department of the Interior recognized and distinguished the scope of these two roles when it embraced as the "present state of the law" the following summary:" 'Over tribal lands, the tribe has the rights of a landowner as well as the rights of a local government, dominion as well as sovereignty. But over all the lands of the reservation, whether owned by the tribe, by members thereof, or by outsiders, the tribe has the sovereign power of determining the conditions upon which persons shall be permitted to enter its domain, to reside therein, and to do business, provided only such determination is consistent with applicable Federal laws and does not infringe any vested rights of persons now occupying reservation lands under lawful authority.' " Federal Indian Law, supra, n.6, at 439 (quoting Solicitor's Opinion of Oct. 25, 1934) (emphasis added).
See Cohen, supra, n.6, at 143.
FN13. See also P. Maxfield, M. Dieterich, & F. Trelease, Natural Resources Law on American Indian Lands 4-6 (1977). Federal limitations on tribal sovereignty can also occur when the exercise of tribal sovereignty would be inconsistent with overriding national interests. See Colville, 447 U.S., at 153, 100 S.Ct., at 2081. This concern is not presented here. See ibid.
FN14. Petitioners and the dissent also argue that we should infer a waiver of the taxing power from silence in the Tribe's original Constitution. Although it is true that the Constitution in force when petitioners signed their leases did not include a provision specifically authorizing a severance tax, neither the Tribe's Constitution nor the Federal Constitution is the font of any sovereign power of the Indian tribes. E.g., Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation, 231 F.2d 89, 94 (CA8 1956); Buster v. Wright, 135 F., at 950. Because the Tribe retains all inherent attributes of sovereignty that have not been divested by the Federal Government, the proper inference from silence on this point is that the sovereign power to tax remains intact. The Tribe's Constitution was amended to authorize the tax before the tax was imposed, and this is the critical event necessary to effectuate the tax. See Barta v. Oglala Sioux Tribe of Pine Ridge Reservation, 259 F.2d, at 554, 556; Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation, supra, at 99.
FN15. The Secretary has implemented the substance of this proviso by the following regulation:
"The regulations in this part may be superseded by the provisions of any tribal constitution, bylaw or charter issued pursuant to the Indian Reorganization Act of June 18, 1934 (48 Stat. 984; 25 U.S.C. 461- 479), ... or by ordinance, resolution or other action authorized under such constitution, bylaw or charter. The regulations in this part, in so far as they are not so superseded, shall apply to leases made by organized tribes if the validity of the lease depends upon the approval of the Secretary of the Interior." 25 CFR §171.29 (1980).
FN16. In arguing that the 1938 Act was intended to pre-empt the severance tax, petitioners attach great significance to the Secretary's approval of the leases. Curiously, they attach virtually no significance to the fact that the Secretary also approved the tax ordinance that they challenge here.
FN17. The Tribe argues that the 1927 Act granting the States the power to tax mineral production on Indian land is inapplicable because the leases at issue here were signed pursuant to the 1938 Act. The 1938 Act, which makes uniform the laws applicable to leasing mineral rights on tribal lands, does not contain a grant of power to the States comparable to that found in the 1927 Act. As a result, the Tribe asserts that the State of New Mexico has no power to tax the production under petitioners' leases with the Tribe. Because the State of New Mexico is not a party to this suit, the Court of Appeals did not reach this issue. See 617 F.2d, at 547-548, n. 5. For this reason, and because we conclude that the 1927 Act did not affect the Tribe's authority to tax, we likewise do not reach this issue.
FN18. The statute provides that Indian severance taxes may be recovered through federal energy pricing. However, the legislative history indicates that Congress took no position on the source of the Indian tribes' power to impose the tax in the first place:
"While severance taxes which may be imposed by an Indian tribe are to be treated in the same manner as State imposed severance taxes, the conferees do not intend to prejudge the outcome of the cases on appeal before the Tenth Circuit Court of Appeals respecting the right of Indian tribes to impose taxes on persons or organizations other than Indians who are engaged in business activities on Indian reservations. The outcome of the cases on appeal will determine the legality of imposing such taxes." S.Conf.Rep.No.95-1126, p. 91 (1978); H.R.Conf.Rep.No.95-1752, p. 91 (1978), U.S.Code Cong. & Admin.News 1978, p. 8800.
FN19. The Commerce Clause empowers Congress "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." U.S.Const., Art. I, §8, cl. 3 (emphasis added).
FN20. In Prudential Insurance Co. v. Benjamin, this Court refused to invalidate a South Carolina tax on out-of-state insurance companies despite appellant's contention that the tax impermissibly burdened interstate commerce. The Court refused to entertain appellant's argument because Congress, in passing the McCarran-Ferguson Act, had provided that "silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of [the business of insurance] by the several States." 59 Stat. 33, 15 U.S.C. §1011.
FN21. Although Congress has not expressly announced that Indian taxes do not threaten its latent power to regulate interstate commerce, it is unclear how Congress could articulate that intention any more convincingly than it has done here. In contrast to when Congress acts with respect to the States, when Congress acts with respect to the Indian tribes, it generally does so pursuant to its authority under the Indian Commerce Clause, or by virtue of its superior position over the tribes, not pursuant to its authority under the Interstate Commerce Clause. This is but one of the difficulties inherent in reviewing under the Interstate Commerce Clause both tribal action and congressional action regulating the tribes. Therefore, in determining whether Congress has "acted" to preclude judicial review, we do not find it significant that the congressional action here was not taken pursuant to the Interstate Commerce Clause.
FN22. Petitioners initially contend that the ordinance taxes the transportation of the minerals from the reservation, not their severance from the mines. As a result, they argue that the ordinance impermissibly burdens interstate commerce by taxing the movement in commerce itself, which is not a local event. The tax, by its terms, applies to resources that are "produced on the Jicarilla Apache Tribe Reservation and sold or transported off the reservation." App. 39. The Tribe explains that this language was used because no sale occurs prior to the transportation off the reservation. The Tribe's tax is due at the time of severance. Id., at 38. Therefore, we agree with the Court of Appeals that the taxable event defined by the ordinance is the removal of minerals from the soil, not their transportation from the reservation. See 617 F.2d, at 546.
FN23. The Court of Appeals noted that, because the lessees chose not to build a factual foundation to challenge the tax on this ground, there was no basis on which to find that the tax was not fairly related to the services provided by the Tribe. See id., at 545, n. 4. Indeed, when the Tribe attempted to introduce at trial evidence of the services it had provided to establish this relationship, the District Court rejected this evidence upon petitioners' objection that such evidence was irrelevant to their challenge. Brief for Respondent Jicarilla Apache Tribe 7-8; 6 Record 278-290, 294, 300-308.
FN24. The ordinance does not distinguish between minerals remaining within New Mexico and those transported beyond the state boundary. As a result, petitioners' argument that the tax discriminates against interstate commerce by favoring local sales focuses on the boundary between the reservation and the State of New Mexico and not on any interstate boundaries. We will assume for purposes of this argument only that this alleged reservation-state discrimination could give rise to a Commerce Clause violation.
FN25. Paragraph 4 of the ordinance specifies that "[r]oyalty gas, oil or condensate taken by the Tribe in kind, and used by the Tribe shall be exempt from taxation." App. 39.
FN26. Petitioners contend that because New Mexico may tax the same mining activity at full value, the Indian tax imposes a multiple tax burden on interstate commerce in violation of the Commerce Clause. The multiple taxation issue arises where two or more taxing jurisdictions point to some contact with an enterprise to support a tax on the entire value of its multistate activities, which is more than the contact would justify. E.g., Standard Oil Co. v. Peck, 342 U.S. 382, 384-385, 72 S.Ct. 309, 310-311, 96 L.Ed. 427 (1952). This Court has required an apportionment of the tax based on the portion of the activity properly viewed as occurring within each relevant State. See, e.g., Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U.S. 207, 219, 100 S.Ct. 2109, 2118, 65 L.Ed.2d 66 (1980); Washington Revenue Dept. v. Association of Washington Stevedoring Cos., 435 U.S. 734, 746, and n. 16, 98 S.Ct. 1388, 1397, and n. 16, 55 L.Ed.2d 682 (1978).
This rule has no bearing here, however, for there can be no claim that the Tribe seeks to tax any more of petitioners' mining activity than the portion occurring within Tribal jurisdiction. Indeed, petitioners do not even argue that the Tribe is seeking to seize more tax revenues than would be fairly related to the services provided by the Tribe. See supra, at 911, and n. 23. In the absence of such an assertion, and when the activity taxed by the Tribe occurs entirely on tribal lands, the multiple taxation issue would arise only if a State attempted to levy a tax on the same activity, which is more than the State's contact with the activity would justify. In such a circumstance, any challenge asserting that tribal and state taxes create a multiple burden on interstate commerce should be directed at the state tax, which, in the absence of congressional ratification, might be invalidated under the Commerce Clause. These cases, of course, do not involve a challenge to state taxation, and we intimate no opinion on the possibility of such a challenge.
Justice Stevens, with whom the Chief Justice and Justice Rehnquist join, dissenting.
The Indian tribes that occupied North America before Europeans settled the continent were unquestionably sovereigns. They ruled themselves and they exercised dominion over the lands that nourished them. Many of those tribes, and some attributes of their sovereignty, survive today. This Court, since its earliest days, has had the task of identifying *160 those inherent sovereign powers that survived the creation of a new Nation and the introduction of an entirely new system of laws applicable to both Indians and non-Indians.
In performing that task, this Court has guarded carefully the unique status of Indian tribes within this Nation. Over its own members, an Indian tribe's sovereign powers are virtually unlimited; the incorporation of the tribe into the United States has done little to change internal tribal relations. In becoming part of the United States, however, the tribes yielded their status as independent nations; Indians and non-Indians alike answered to the authority of a new Nation, organized under a new Constitution based on democratic principles of representative government. In that new system of government, Indian tribes were afforded no general powers over citizens of the United States. Many tribes, however, were granted a power unknown to any other sovereignty in this Nation: a power to exclude nonmembers entirely from territory reserved for the tribe. Incident to this basic power to exclude, the tribes exercise limited powers of governance over nonmembers, though those nonmembers have no voice in tribal government. Since a tribe may exclude nonmembers entirely from tribal territory, the tribe necessarily may impose conditions on a right of entry granted to a nonmember to do business on the reservation.
The question presented in these cases is whether, after a tribe has granted nonmembers access to its reservation on specified terms and conditions to engage in an economic venture of mutual benefit, the tribe may impose a tax on the nonmembers' share of benefits derived from the venture. The Court today holds that it may do so. In my opinion this holding distorts the very concept of tribal sovereignty. Because I am convinced that the Court's treatment of these important cases gives inadequate attention to the critical difference between a tribe's powers over its own members and its powers over nonmembers, I set forth my views at greater length than is normally appropriate in a dissenting opinion.
*161 I
The 2,100 members of the Jicarilla Apache Tribe live on a reservation in northern New Mexico. [FN1] The area encompassed by the reservation became a part of the United States in 1848 when the Mexican War ended in the Treaty of Guadalupe Hidalgo. See 9 Stat. 922. Between 1848 and 1871, the United States did not enter into any treaty with the Jicarillas or enact any special legislation relating to them; in 1871 Congress outlawed any future treaties with Indian tribes. [FN2] In 1887, President Cleveland issued an Executive Order setting aside a tract of public lands in the Territory of New Mexico "as a reservation for the use and occupation of the Jicarilla Apache Indians." Except for a provision protecting bona fide settlers from deprivation of previously acquired rights, the Executive Order contained no special rules applicable to the reservation. [FN3] The mineral leases at issue in this case *162 were granted by the Jicarilla Apache Tribe on these reservation lands.
The record does not indicate whether any leasing activity occurred on the Jicarilla Reservation between 1887 and 1953. During that period, however, the authority of Indian tribes to enter into mineral leases was clarified. In 1891 Congress passed a statute permitting the mineral leasing of Indian lands. Act of Feb. 28, 1891, §3, 26 Stat. 795, 25 U.S.C. §397. Because the statute applied only to lands "occupied by Indians who have bought and paid for the same," the statute was interpreted to be inapplicable to reservations created by Executive Order. See British-American Oil Producing Co. v. Board of Equalization, 299 U.S. 159, 161-162, 164, 57 S.Ct. 132, 133, 134, 81 L.Ed. 95. In 1922, the Secretary of the Interior took the position that Indian reservations created by Executive Order were public lands and that Indians residing on those reservations had no right to share in royalties derived from oil and gas leases. 49 I.D. 139. [FN4]
*163 In 1927 Congress enacted a statute expressly providing that unallotted lands on any Indian reservation created by Executive Order could be leased for oil and gas mining purposes with the approval of the Secretary of the Interior. [FN5] The statute directed that all rentals, royalties, or bonuses for such leases should be paid to the Treasurer of the United States for the benefit of the tribe for which the reservation was created. [FN6] The statute further provided that state taxes *164 could be levied upon the output of such oil and gas leases, [FN7] but made no mention of the possibility that the Indian tribes, in addition to receiving royalties, could impose taxes on the output. [FN8]
In 1934, Congress enacted the Indian Reorganization Act, 48 Stat. 984, 25 U.S.C. §461 et seq., which authorized any Indian tribe residing on a reservation to adopt a constitution and bylaws, subject to the approval of the Secretary of the Interior. The Act provided that, "[i]n addition to all powers vested in any Indian tribe or tribal council by existing law," the constitution should vest certain specific powers, such as the power to employ legal counsel, in the tribe. [FN9] The Act *165 also authorized the Secretary of the Interior to issue a charter of incorporation to an Indian tribe, and provided that the charter could convey to the tribe the power to purchase, manage, and dispose of its property. [FN10] The 1934 Act was silent concerning the right of an Indian tribe to levy taxes. [FN11] The first Jicarilla Apache Constitution was approved by the Secretary of the Interior in 1937. [FN12]
*166 In 1953, the Tribe executed an oil and gas lease with the Phillips Petroleum Co. App. 22-30. The lease, prepared on a form provided by the Bureau of Indian Affairs of the Department of the Interior, presumably is typical of later leases executed between other companies and the Tribe. [FN13] The lease provides that in return for certain rents, royalties, and a cash bonus of $71,345.99, all to be paid to the treasurer of the Tribe, the Tribe as lessor granted to the lessee "the exclusive right and privilege to drill for, mine, extract, remove, and dispose of all the oil and natural gas deposits in or under" the described tracts of land, together with the right to construct and maintain buildings, plants, tanks, and other necessary structures on the surface. Id., at 22-23. The lease is for a term of 10 years following approval by the Secretary of the Interior "and as much longer thereafter as oil and/or gas is produced in paying quantities from said land." Ibid. The lessee is obligated to use reasonable diligence in the development of the property, and to pay an annual rental of $1.25 per acre and a royalty of 12 1/2 % "of the value or amount" of all oil and gas "produced and saved" from the leased land. Id., at 24, 26. Oil and gas used by the lessee for development and operation of the lease is royalty-free. Id., at 24. The Tribe reserved the rights to use free of charge sufficient gas for any school or other building owned by the Tribe on the leased premises, and to take its royalty in kind. Id., at 27-28.
The lease contains no reference to the payment of taxes. The lessee does, however, agree to comply with all regulations of the Secretary of the Interior
"now or hereafter in force relative to such leases: Provided, That no regulation hereafter approved shall effect *167 a change in rate or royalty or annual rental herein specified without the written consent of the parties to this lease." Id., at 27.
The lease was approved by the Commissioner of Indian Affairs on behalf of the Secretary of the Interior. Id., at 32. Both of the 1953 leases described in the record are still producing.
In 1968, the Tribe adopted a Revised Constitution giving its Tribal Council authority, subject to approval by the Secretary of the Interior, "to impose taxes and fees on non-members of the tribe doing business on the reservation." [FN14] Eight years later, the Tribal Council enacted an Oil and Gas Severance Tax Ordinance, which was approved by the Secretary of the Interior. The tribal ordinance provides that a severance tax "is imposed on any oil and natural gas severed, saved and removed from Tribal lands...." Id., at 38. The rate of the tax is $.05 per million Btu's of gas produced on the reservation and sold or transported off the reservation and $0.29 per barrel of crude or condensate produced on the reservation and sold or transported off the reservation. Id., at 39. Royalty gas or oil taken by the Tribe, as well as gas or oil used by the Tribe, is exempt from the tax. Ibid. Thus the entire burden of the tax apparently will fall on nonmembers of the Tribe. The tax, if sustained, will produce over $2 million in revenues annually. [FN15]
*168 II
The powers possessed by Indian tribes stem from three sources: federal statutes, treaties, and the tribe's inherent sovereignty. Neither the Tribe nor the Federal Government seeks to justify the Jicarilla Tribe's severance tax on the basis of any federal statute, [FN16] and the Jicarilla Apaches, who reside on an Executive Order reservation, executed no treaty with the United States from which they derive sovereign powers. Therefore, if the severance tax is valid, it must be as an exercise of the Tribe's inherent sovereignty.
Tribal sovereignty is neither derived from nor protected by the Constitution. [FN17] Indian tribes have, however, retained many of the powers of self-government that they possessed at the time of their incorporation into the United States. As stated by Justice M'Lean in Worcester v. Georgia, 6 Pet. 515, 580, 8 L.Ed. 483 (concurring opinion):
"At no time has the sovereignty of the country been recognised as existing in the Indians, but they have been always admitted to possess many of the attributes of sovereignty. All the rights which belong to self-government have been recognised as vested in them."
*169 Similarly, the Court in United States v. Kagama, 118 U.S. 375, 381- 382, 6 S.Ct. 1109, 1112-13, 30 L.Ed. 228, stated:
"[The Indians] were, and always have been, regarded as having a semi- independent position when they preserved their tribal relations; not as States, not as nations, not as possessed of the full attributes of sovereignty, but as a separate people, with the power of regulating their internal and social relations, and thus far not brought under the laws of the Union or of the State within whose limits they resided."
Two distinct principles emerge from these early statements of tribal sovereignty: that Indian tribes possess broad powers of self-governance over tribal members, but that tribes do not possess the same attributes of sovereignty that the Federal Government and the several States enjoy. [FN18] In determining the extent of the sovereign powers that the tribes retained in submitting to the authority of the United States, *170 this Court has recognized a fundamental distinction between the right of the tribes to govern their own internal affairs and the right to exercise powers affecting nonmembers of the tribe.
The Court has been careful to protect the tribes from interference with tribal control over their own members. The Court has recognized that tribes have the power to prosecute members for violations of tribal criminal law, and that this power is an inherent attribute of tribal sovereignty. United States v. Wheeler, 435 U.S. 313, 98 S.Ct. 1079, 55 L.Ed.2d 303. The tribes also retain the power to create substantive law governing internal tribal affairs. Tribes may define rules of membership, and thus determine who is entitled to the benefits of tribal citizenship, Roff v. Burney, 168 U.S. 218, 18 S.Ct. 60, 42 L.Ed. 442; establish rules of inheritance, which supersede applicable state law, Jones v. Meehan, 175 U.S. 1, 29, 20 S.Ct. 1, 12, 44 L.Ed. 49; and determine rights to custody of a child of divorced parents of the tribe, and thus pre-empt adoption proceedings brought in state court. Fisher v. District Court, 424 U.S. 382, 96 S.Ct. 943, 47 L.Ed.2d 106. This substantive tribal law may be enforced in tribal courts. Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251; Fisher v. District Court, supra.
In many respects, the Indian tribes' sovereignty over their own members is significantly greater than the States' powers over their own citizens. Tribes may enforce discriminatory rules that would be intolerable in a non-Indian community. The equal protection components of the Fifth and Fourteenth Amendments, which limit federal or state authority, do not similarly limit tribal power. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56, and n. 7, 98 S.Ct. 1670, 1675, and n. 7, 56 L.Ed.2d 106. [FN19] The criminal jurisdiction of the tribes over their own members is similarly unconstrained *171 by constitutional limitations applicable to the States and the Federal Government. [FN20] Thus the use of the word "sovereign" to characterize tribal powers of self-government is surely appropriate.
In sharp contrast to the tribes' broad powers over their own members, tribal powers over nonmembers have always been narrowly confined. [FN21] The Court has emphasized that "exercise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of the tribes, and so cannot survive without express congressional delegation." Montana v. United States, 450 U.S. 544, 564, 101 S.Ct. 1245, 1257, 67 L.Ed.2d 493. In Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209, the Court held that tribes have no criminal jurisdiction ove