Here are the materials in King Mountain Tobacco Co., Inc. v. Alcohol and Tobacco Tax and Trade Bureau (E.D. Wash.):
DCT Order Denying Yakama Motion
Yakama Motion for Partial Summary J
An excerpt:
This Court already has held that King Mountain does not enjoy an exemption from the federal excise tax on tobacco products under Capoeman because the tax is not imposed on products directly derived from the land. Therefore, to the degree that Article II contains express exemptive language, the exemption to taxation created by Article II would not apply to the facts of this case. Id. Accordingly, the Plaintiff has failed to establish an exemption to the excise tax under the Treaty.
The court also rejected claims that the General Allotment Act forbid the federal taxes as well:
In this case, Mr. Wheeler is the allottee, but King Mountain is the tax payer. The tax lien statute applies to the property of the “person liable to pay” the unpaid tax. 26 U.S.C. § 6321. Although the Court is aware that Mr. Wheeler’s assets could be subject to lien if King Mountain were found to be Mr. Wheeler’s alter ego, see G.M. Leasing Corp. v. United States, 429 U.S. 338, 350–51, 97 S.Ct. 619, 50 L.Ed.2d 530 (1977), the record is devoid of any evidence that King Mountain is Mr. Wheeler’s alter ego. Accordingly, any lien would be imposed on King Mountain’s property. As the trust property is held for the benefit of Mr. Wheeler, it is not an asset of King Mountain. Therefore, under the reasoning of Anderson, the Capoeman exception to taxation would not apply to income earned by King Mountain.
Materials in a related case are here.
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