Scott

dissenting:

The district court concluded that the balance of tribal, federal, and state interests in this case tips in favor of the Tribe and granted the Tribe’s summary judgment motion. In doing so, the district court considered the Tribe’s strong interest in economic development-a particularly weighty concern for a small and destitute 143-member Tribe.

The district court also properly considered the long-standing federal interest of promoting tribal sovereignty. Further, the district ■ court noted the special relationship that exists between the Tribe and the federal government. That relationship included federal regulation of Indian gaming under the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721 . Finally, the district court also noted that the Tribe received a $1.12 million Development Grant from the Department of Housing and Urban Development (“HUD”). This grant was used for economic development on the Reservation.

Because the district court correctly found that the balance of interests tips in favor of the Tribe, I submit that the majority is wrong in concluding that federal law does not preempt Arizona’s privilege tax.

I.

“The standard preemption analysis is…

Opinion by Judge NOONAN; Dissent by Judge PREGERSON.

Yavapai-Prescott Indian Tribe (the Tribe) brought this action for declaratory relief and an injunction against Harold Scott in his official capacity as Director of the Arizona Department of Revenue and Tony West in his official capacity as Treasurer of the State of Arizona (collectively, “the State” or “Arizona”). Prescott Convention Center, Inc., an Arizona corporation, (PCC) was also named as a defendant by the Tribe and became a cross-claimant against the State. From judgment in favor of the Tribe, the State appeals.

The case involves the judge-created law on the preemption of state taxes imposed on sales by non-Indians to non-Indians on an Indian reservation. Whether there is preemption depends on proof that the federal and tribal interest in the activity outweighs the interest of the State. Holding that in this ease the plaintiff Tribe has failed to establish the superior interest necessary for preemption, we reverse the judgment of the district court.

THE PARTIES AND THE PROPERTY

The Plaintiffs. The Tribe, an Indian tribe recognized by the United States, has currently 143 members, of whom 65 live on the…