ATKINSON TRADING CO., INC. v. SHIRLEY et al.

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645 OCTOBER TERM, 2000
Syllabus
ATKINSON TRADING CO., INC. v. SHIRLEY et al.
certiorari to the united states court of appeals for
the tenth circuit
No. 00–454. Argued March 27, 2001—Decided May 29, 2001
In Montana v. United States, 450 U. S. 544, this Court held that, with two
limited exceptions, Indian tribes lack civil authority over the conduct
of nonmembers on non-Indian land within a reservation. Petitioner’s
trading post on such land within the Navajo Nation Reservation is sub-
ject to a hotel occupancy tax that the Tribe imposes on any hotel room
located within the reservation’s boundaries. The Federal District
Court upheld the tax, and the Tenth Circuit affirmed. Relying in part
on Merrion v. Jicarilla Apache Tribe, 455 U. S. 130, the latter court
complemented Montana’s framework with a case-by-case approach that
balanced the land’s non-Indian fee status with the Tribe’s sovereign
powers, its interests, and the impact that the exercise of its powers had
on the nonmembers’ interests. The court concluded that the tax fell
under Montana’s first exception.
Held: The Navajo Nation’s imposition of a hotel occupancy tax upon non-
members on non-Indian fee land within its reservation is invalid.
Pp. 649–659.
(a) Montana’s general rule applies to tribal attempts to tax nonmem-
ber activity occurring on non-Indian fee land. Tribal jurisdiction is lim-
ited: For powers not expressly conferred them by federal statute or
treaty, tribes must rely upon their retained or inherent sovereignty.
Their power over nonmembers on non-Indian fee land is sharply circum-
scribed. Montana noted only two exceptions: (1) a tribe may regulate
the activities of nonmembers who enter consensual relationships with
the tribe or its members; and (2) a tribe may exercise civil authority
over the conduct of non-Indians on fee lands within its reservation when
that conduct threatens or has some direct effect on the tribe’s political
integrity, economic security, or health or welfare. 450 U. S., at 565–566.
Montana’s rule applies to a tribe’s regulatory authority, id., at 566, and
adjudicatory authority, Strate v. A–1 Contractors, 520 U. S. 438, 453.
Citing Merrion, respondents submit that Montana and Strate do not
restrict a tribe’s power to impose revenue-raising taxes. However, be-
cause Merrion noted that a tribe’s inherent taxing power only extended
to transactions occurring on trust lands and involving the tribe or its
members, 455 U. S., at 137, it is easily reconcilable with the Montana-
Strate line of authority. A tribe’s sovereign power to tax reaches no

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646 ATKINSON TRADING CO. v. SHIRLEY
Syllabus
further than tribal land. Thus, Merrion does not exempt taxation from
Montana’s general rule, and Montana is applied straight up. Because
Congress had not authorized the tax at issue through treaty or statute,
and because the incidence of the tax falls upon nonmembers on non-
Indian fee land, the Navajo Nation must establish the existence of one
of Montana’s exceptions. Pp. 649–654.
(b) Montana’s exceptions do not obtain here. Neither petitioner nor
its hotel guests have entered into a consensual relationship with the
Navajo Nation justifying the tax’s imposition. Such a relationship
must stem from commercial dealing, contracts, leases, or other arrange-
ments, Montana, supra, at 565, and a nonmember’s actual or potential
receipt of tribal police, fire, and medical services does not create the
requisite connection. Nor is petitioner’s status as an “Indian trader”
licensed by the Indian Affairs Commissioner sufficient by itself to sup-
port the tax’s imposition. As to Montana’s second exception, petition-
er’s operation of a hotel on non-Indian fee land does not threaten or
have a direct effect on the tribe’s political integrity, economic security,
or health or welfare. Contrary to respondents’ argument, the judgment
in Brendale v. Confederated Tribes and Bands of Yakima Nation, 492
U. S. 408, 440, did not give Indian tribes broad authority over nonmem-
bers where the acreage of non-Indian fee land is minuscule in rela-
tion to the surrounding tribal land. Irrespective of the percentage of
non-Indian fee land within a reservation, Montana’s second excep-
tion grants tribes nothing beyond what is necessary to protect tribal
self-government or control internal relations. Strate, supra, at 459.
Whatever effect petitioner’s operation of its trading post might have
upon surrounding Navajo land, it does not endanger the Navajo Na-
tion’s political integrity. Pp. 654–659.
210 F. 3d 1247, reversed.
Rehnquist, C. J., delivered the opinion for a unanimous Court. Sou-
ter, J., filed a concurring opinion, in which Kennedy and Thomas, JJ.,
joined, post, p. 659.
Charles G. Cole argued the cause for petitioner. With
him on the briefs were Shannen W. Coffin and William J.
Darling.
Marcelino R. Gomez argued the cause and filed a brief
for respondents.
Beth S. Brinkmann argued the cause for the United
States as amicus curiae urging affirmance. On the brief
were Acting Solicitor General Underwood, Acting Assistant

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647 Cite as: 532 U. S. 645 (2001)
Opinion of the Court
Attorney General Cruden, Deputy Solicitor General Kneed-
ler, Edward C. DuMont, E. Ann Peterson, and William B.
Lazarus.*
Chief Justice Rehnquist delivered the opinion of the
Court.
In Montana v. United States, 450 U. S. 544 (1981), we held
that, with limited exceptions, Indian tribes lack civil author-
ity over the conduct of nonmembers on non-Indian fee land
within a reservation. The question with which we are pre-
sented is whether this general rule applies to tribal attempts
to tax nonmember activity occurring on non-Indian fee land.
We hold that it does and that neither of Montana’s excep-
tions obtains here.
In 1916, Hubert Richardson, lured by the possibility of
trading with wealthy Gray Mountain Navajo cattlemen, built
the Cameron Trading Post just south of the Little Colo-
rado River near Cameron, Arizona. G. Richardson, Nav-
ajo Trader 136–137 (1986). Richardson purchased the land
*Briefs of amici curiae urging reversal were filed for the State of South
Dakota et al. by Mark W. Barnett, Attorney General of South Dakota,
and John Patrick Guhin, Deputy Attorney General, and by the Attorneys
General for their respective States as follows: Bill Pryor of Alabama, Ken
Salazar of Colorado, Robert A. Butterworth of Florida, Jennifer M. Gran-
holm of Michigan, Mike Moore of Mississippi, Wayne Stenehjem of North
Dakota, W. A. Drew Edmondson of Oklahoma, and Jan Graham of Utah;
for the Association of American Railroads by Lynn H. Slade, Walter E.
Stern, and William C. Scott; for the Interstate Natural Gas Association
of America by Michael E. Webster and Neil G. Westesen; for Proper Eco-
nomic Resource Management, Inc., by Randy V. Thompson; and for Ro-
berta Bugenig et al. by James S. Burling.
Briefs of amici curiae urging affirmance were filed for the Assiniboine
and Sioux Tribes of the Fort Peck Indian Reservation et al. by William
R. Perry and Arthur Lazarus, Jr.; for the Colorado River Indian Tribes
et al. by Susan M. Williams; for the Confederated Tribes of the Umatilla
Indian Reservation et al. by Michael L. Roy and Jeffrey D. Lerner; and
for the Shakopee Mdewakanton Sioux (Dakota) Community et al. by An-
drew M. Small and Steven F. Olson.

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648 ATKINSON TRADING CO. v. SHIRLEY
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directly from the United States, but the Navajo Nation
Reservation, which had been established in 1868, see 15
Stat. 667, was later extended eight miles south so that the
Cameron Trading Post fell within its exterior boundaries.
See Act of June 14, 1934, ch. 521, 48 Stat. 960–962. This
1934 enlargement of the Navajo Reservation—which today
stretches across northeast Arizona, northwest New Mexico,
and southeast Utah—did not alter the status of the property:
It is, like millions of acres throughout the United States,
non-Indian fee land within a tribal reservation.
Richardson’s “drafty, wooden store building and four small,
one-room-shack cabins overlooking the bare river canyon,”
Richardson, supra, at 135, have since evolved into a business
complex consisting of a hotel, restaurant, cafeteria, gallery,
curio shop, retail store, and recreational vehicle facility.
The current owner, petitioner Atkinson Trading Company,
Inc., benefits from the Cameron Trading Post’s location near
the intersection of Arizona Highway 64 (which leads west to
the Grand Canyon) and United States Highway 89 (which
connects Flagstaff on the south with Glen Canyon Dam to
the north). A significant portion of petitioner’s hotel busi-
ness stems from tourists on their way to or from the Grand
Canyon National Park.
In 1992, the Navajo Nation enacted a hotel occupancy tax,
which imposes an 8 percent tax upon any hotel room located
within the exterior boundaries of the Navajo Nation Reser-
vation. See 24 Navajo Nation Code §§ 101–142 (1995), App.
to Pet. for Cert. 102a–124a. Although the legal incidence
of the tax falls directly upon the guests, the owner or opera-
tor of the hotel must collect and remit it to respondents,
members of the Navajo Tax Commission. §§ 104, 107. The
nonmember guests at the Cameron Trading Post pay approx-
imately $84,000 in taxes to respondents annually.
Petitioner’s challenge under Montana to the Navajo Na-
tion’s authority to impose the hotel occupancy tax was re-
jected by both the Navajo Tax Commission and the Navajo

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Supreme Court. Petitioner then sought relief in the United
States District Court for the District of New Mexico, which
also upheld the tax. A divided panel of the Court of Ap-
peals for the Tenth Circuit affirmed. See 210 F. 3d 1247
(2000).
Although the Court of Appeals agreed with petitioner that
our cases in this area “did make an issue of the fee status of
the land in question,” id., at 1256, it nonetheless concluded
that the status of the land as “fee land or tribal land is simply
one of the factors a court should consider” when determining
whether civil jurisdiction exists, id., at 1258 (citing 18 U. S. C.
§ 1151). Relying in part upon our decision in Merrion v.
Jicarilla Apache Tribe, 455 U. S. 130 (1982), the court “com-
plement[ed]” Montana’s framework with a “case-by-case ap-
proach” that balanced the non-Indian fee status of the land
with “the nature of the inherent sovereign powers the tribe
is attempting to exercise, its interests, and the impact that
the exercise of the tribe’s powers has upon the nonmember
interests involved.” 210 F. 3d, at 1255, 1257, 1261. The
Court of Appeals then likened the Navajo hotel occupancy
tax to similar taxes imposed by New Mexico and Arizona,
concluding that the tax fell under Montana’s first exception
because a “consensual relationship exists in that the non-
member guests could refrain from the privilege of lodg-
ing within the confines of the Navajo Reservation and there-
fore remain free from liability for the [tax].” 210 F. 3d, at
1263 (citing Buster v. Wright, 135 F. 947, 949 (CA8 1905)).
The dissenting judge would have applied Montana without
“any language or ‘factors’ derived from Merrion” and con-
cluded that, based upon her view of the record, none of the
Montana exceptions applied. 210 F. 3d, at 1269 (Briscoe,
J., dissenting).
We granted certiorari, 531 U. S. 1009 (2000), and now
reverse.
Tribal jurisdiction is limited: For powers not expressly con-
ferred upon them by federal statute or treaty, Indian tribes

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650 ATKINSON TRADING CO. v. SHIRLEY
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must rely upon their retained or inherent sovereignty. In
Montana, the most exhaustively reasoned of our modern
cases addressing this latter authority, we observed that In-
dian tribe power over nonmembers on non-Indian fee land is
sharply circumscribed. At issue in Montana was the Crow
Tribe’s attempt to regulate nonmember fishing and hunting
on non-Indian fee land within the reservation. Although we
“readily agree[d]” that the 1868 Fort Laramie Treaty author-
ized the Crow Tribe to prohibit nonmembers from hunting
or fishing on tribal land, 450 U. S., at 557, we held that such
“power cannot apply to lands held in fee by non-Indians.”
Id., at 559. This delineation of members and nonmembers,
tribal land and non-Indian fee land, stemmed from the de-
pendent nature of tribal sovereignty. Surveying our cases
in this area dating back to 1810, see Fletcher v. Peck, 6
Cranch 87, 147 (1810) (Johnson, J., concurring) (stating that
Indian tribes have lost any “right of governing every person
within their limits except themselves”), we noted that
“through their original incorporation into the United States
as well as through specific treaties and statutes, Indian
tribes have lost many of the attributes of sovereignty.” 450
U. S., at 563.1 We concluded that the inherent sovereignty
of Indian tribes was limited to “their members and their ter-
ritory”: “[E]xercise of tribal power beyond what is necessary
to protect tribal self-government or to control internal rela-
1 We also noted that nearly 90 million acres of non-Indian fee land had
been acquired as part of the Indian General Allotment Act, 24 Stat. 388,
as amended, 25 U. S. C. § 331 et seq., which authorized the issuance of pat-
ents in fee to individual Indian allottees who, after holding the patent for
25 years, could then transfer the land to non-Indians. Although Congress
repudiated the practice of allotment in the Indian Reorganization Act, 48
Stat. 984, 25 U. S. C. § 461 et seq., we nonetheless found significant that
Congress equated alienation “with the dissolution of tribal affairs and ju-
risdiction.” Montana, 450 U. S., at 559, n. 9. We thus concluded that
it “defie[d] common sense to suppose that Congress would intend that
non-Indians purchasing allotted lands would become subject to tribal juris-
diction.” Ibid.

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tions is inconsistent with the dependent status of the tribes.”
Id., at 564 (citing United States v. Wheeler, 435 U. S. 313,
326 (1978) (“[T]he dependent status of Indian tribes . . . is
necessarily inconsistent with their freedom to determine
their external relations” (emphasis deleted))).
Although we extracted from our precedents “the general
proposition that the inherent sovereign powers of an Indian
tribe do not extend to the activities of nonmembers of the
tribe,” 450 U. S., at 565, we nonetheless noted in Montana
two possible bases for tribal jurisdiction over non-Indian fee
land. First, “[a] tribe may regulate, through taxation, li-
censing, or other means, the activities of nonmembers who
enter consensual relationships with the tribe or its members,
through commercial dealings, contracts, leases, or other
arrangements.” Ibid. Second, “[a] tribe may . . . exercise
civil authority over the conduct of non-Indians on fee lands
within its reservation when that conduct threatens or has
some direct effect on the political integrity, the economic se-
curity, or the health or welfare of the tribe.” Id., at 566.
Applying these precepts, we found that the nonmembers at
issue there had not subjected themselves to “tribal civil ju-
risdiction” through any agreements or dealings with the
Tribe and that hunting and fishing on non-Indian fee land did
not “imperil the subsistence or welfare of the Tribe.” Ibid.
We therefore held that the Crow Tribe’s regulations could
not be enforced.
The framework set forth in Montana “broadly addressed
the concept of ‘inherent sovereignty.’ ” Strate v. A–1 Con-
tractors, 520 U. S. 438, 453 (1997) (quoting Montana, supra,
at 563). In Strate, we dealt with the Three Affiliated
Tribes’ assertion of judicial jurisdiction over an automobile
accident involving two nonmembers traveling on a state
highway within the reservation. Although we did not ques-
tion the ability of tribal police to patrol the highway, see
520 U. S., at 456, n. 11, we likened the public right-of-way to
non-Indian fee land because the Tribes lacked the power to

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652 ATKINSON TRADING CO. v. SHIRLEY
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“assert a landowner’s right to occupy and exclude,” id., at
456. Recognizing that Montana “immediately involved reg-
ulatory authority,” 2 we nonetheless concluded that its rea-
soning had “delineated—in a main rule and exceptions—the
bounds of the power tribes retain to exercise ‘forms of civil
jurisdiction over non-Indians.’ ” 520 U. S., at 453 (quoting
Montana, supra, at 565). We accordingly held that Mon-
tana governed tribal assertions of adjudicatory authority
over non-Indian fee land within a reservation. See 520
U. S., at 453 (“Subject to controlling provisions in treaties
and statutes, and the two exceptions identified in Montana,
the civil authority of Indian tribes and their courts with
respect to non-Indian fee lands generally ‘do[es] not extend
to the activities of nonmembers of the tribe’ ” (emphasis
added) (quoting Montana, supra, at 565)).
Citing our decision in Merrion, respondents submit that
Montana and Strate do not restrict an Indian tribe’s power
to impose revenue-raising taxes.3 In Merrion, just one year
after our decision in Montana, we upheld a severance tax
imposed by the Jicarilla Apache Tribe upon non-Indian les-
sees authorized to extract oil and gas from tribal land. In
so doing, we noted that the power to tax derives not solely
from an Indian tribe’s power to exclude non-Indians from
tribal land, but also from an Indian tribe’s “general authority,
as sovereign, to control economic activity within its juris-
diction.” 455 U. S., at 137. Such authority, we held, was
incident to the benefits conferred upon nonmembers: “They
benefit from the provision of police protection and other gov-
ernmental services, as well as from ‘ “the advantages of a
civilized society” ’ that are assured by the existence of tribal
2 See also South Dakota v. Bourland, 508 U. S. 679 (1993); Brendale v.
Confederated Tribes and Bands of Yakima Nation, 492 U. S. 408 (1989).
3 Respondents concede that regulatory taxes fall under the Montana
framework. See 450 U. S., at 565 (“A tribe may regulate, through taxa-
tion, . . . the activities of nonmembers”).

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government.” Id., at 137–138 (quoting Exxon Corp. v. De-
partment of Revenue of Wis., 447 U. S. 207, 228 (1980)).
Merrion, however, was careful to note that an Indian
tribe’s inherent power to tax only extended to “ ‘transactions
occurring on trust lands and significantly involving a tribe or
its members.’ ” 455 U. S., at 137 (emphasis added) (quoting
Washington v. Confederated Tribes of Colville Reservation,
447 U. S. 134, 152 (1980)). There are undoubtedly parts of
the Merrion opinion that suggest a broader scope for tribal
taxing authority than the quoted language above.4 But
Merrion involved a tax that only applied to activity occur-
ring on the reservation, and its holding is therefore easily
reconcilable with the Montana-Strate line of authority,
which we deem to be controlling. See Merrion, supra, at
142 (“[A] tribe has no authority over a nonmember until the
nonmember enters tribal lands or conducts business with the
tribe”). An Indian tribe’s sovereign power to tax—what-
ever its derivation—reaches no further than tribal land.5
4 Merrion v. Jicarilla Apache Tribe, 455 U. S. 130 (1982), for example,
referenced the decision of the Court of Appeals for the Eighth Circuit in
Buster v. Wright, 135 F. 947 (1905). But we have never endorsed Buster’s
statement that an Indian tribe’s “jurisdiction to govern the inhabitants of
a country is not conditioned or limited by the title to the land which they
occupy in it.” Id., at 951. Accordingly, beyond any guidance it might
provide as to the type of consensual relationship contemplated by the first
exception of Montana v. United States, 450 U. S. 544, 566 (1981), Buster
is not an authoritative precedent.
5 We find misplaced the Court of Appeals’ reliance upon 18 U. S. C.
§ 1151, a statute conferring upon Indian tribes jurisdiction over certain
criminal acts occurring in “Indian country,” or “all land within the limits
of any Indian reservation under the jurisdiction of the United States Gov-
ernment, notwithstanding the issuance of any patent, and, including
rights-of-way running through the reservation.” See also Duro v. Reina,
495 U. S. 676, 680, n. 1 (1990). Although § 1151 has been relied upon to
demarcate state, federal, and tribal jurisdiction over criminal and civil
matters, see DeCoteau v. District County Court for Tenth Judicial Dist.,
420 U. S. 425, 427, n. 2 (1975) (“While § 1151 is concerned, on its face, only

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654 ATKINSON TRADING CO. v. SHIRLEY
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We therefore do not read Merrion to exempt taxation
from Montana’s general rule that Indian tribes lack civil au-
thority over nonmembers on non-Indian fee land. Accord-
ingly, as in Strate, we apply Montana straight up. Because
Congress has not authorized the Navajo Nation’s hotel occu-
pancy tax through treaty or statute, and because the inci-
dence of the tax falls upon nonmembers on non-Indian fee
land, it is incumbent upon the Navajo Nation to establish the
existence of one of Montana’s exceptions.
Respondents argue that both petitioner and its hotel
guests have entered into a consensual relationship with the
Navajo Nation justifying the imposition of the hotel occu-
pancy tax.6 Echoing the reasoning of the Court of Appeals,
respondents note that the Cameron Trading Post benefits
from the numerous services provided by the Navajo Nation.
The record reflects that the Arizona State Police and the
Navajo Tribal Police patrol the portions of United States
with criminal jurisdiction, the Court has recognized that it generally ap-
plies as well to questions of civil jurisdiction [citing cases]”), we do not
here deal with a claim of statutorily conferred power. Section 1151 sim-
ply does not address an Indian tribe’s inherent or retained sovereignty
over nonmembers on non-Indian fee land.
At least in the context of non-Indian fee land, we also find inapt the
Court of Appeals’ analogy to state taxing authority. Our reference in
Merrion to a State’s ability to tax activities with which it has a substantial
nexus was made in the context of describing an Indian tribe’s authority
over tribal land. See 455 U. S., at 137–138 (citing Exxon Corp. v. Depart-
ment of Revenue of Wis., 447 U. S. 207, 228 (1980); Japan Line, Ltd. v.
County of Los Angeles, 441 U. S. 434, 445 (1979)). Only full territorial
sovereigns enjoy the “power to enforce laws against all who come within
the sovereign’s territory, whether citizens or aliens,” and Indian tribes
“can no longer be described as sovereigns in this sense.” Duro v. Reina,
supra, at 685.
6 Because the legal incidence of the tax falls directly upon the guests,
not petitioner, it is unclear whether the Tribe’s relationship with petitioner
is at all relevant. We need not, however, decide this issue since the hotel
occupancy tax exceeds the Tribe’s authority even considering petitioner’s
contacts with the Navajo Nation.

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Highway 89 and Arizona Highway 64 traversing the reserva-
tion; that the Navajo Tribal Police and the Navajo Tribal
Emergency Medical Services Department will respond to an
emergency call from the Cameron Trading Post; and that
local Arizona Fire Departments and the Navajo Tribal Fire
Department provide fire protection to the area.7 Although
we do not question the Navajo Nation’s ability to charge an
appropriate fee for a particular service actually rendered,8
we think the generalized availability of tribal services pat-
ently insufficient to sustain the Tribe’s civil authority over
nonmembers on non-Indian fee land.
The consensual relationship must stem from “commercial
dealing, contracts, leases, or other arrangements,” Montana,
450 U. S., at 565, and a nonmember’s actual or potential re-
ceipt of tribal police, fire, and medical services does not cre-
ate the requisite connection. If it did, the exception would
swallow the rule: All non-Indian fee lands within a reserva-
tion benefit, to some extent, from the “advantages of a civi-
lized society” offered by the Indian tribe. Merrion, supra,
at 137–138 (internal quotation marks and citation omitted).
Such a result does not square with our precedents; indeed,
we implicitly rejected this argument in Strate,9 where we
held that the nonmembers had not consented to the Tribes’
adjudicatory authority by availing themselves of the benefit
of tribal police protection while traveling within the reserva-
tion. See 520 U. S., at 456–457, and n. 11. We therefore
reject respondents’ broad reading of Montana’s first excep-
tion, which ignores the dependent status of Indian tribes and
subverts the territorial restriction upon tribal power.
7 The Navajo Tribal Fire Department has responded to a fire at the
Cameron Trading Post. See App. to Pet. for Cert. 57a.
8 The Navajo Nation charges for its emergency medical services (a flat
call-out fee of $300 and a mileage fee of $6.25 per mile). See App. 127–129.
9 See Reply Brief for Petitioners 13–14 and Brief for United States as
Amicus Curiae 29 in Strate v. A–1 Contractors, O. T. 1996, No. 95–1872.

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Respondents and their principal amicus, the United
States, also argue that petitioner consented to the tax by
becoming an “Indian trader.” Congress has authorized the
Commissioner of Indian Affairs “to appoint traders to the
Indian tribes and to make such rules and regulations as he
may deem just and proper specifying the kind and quantity
of goods and the prices at which such goods shall be sold to
the Indians.” 25 U. S. C. § 261. Petitioner has acquired the
requisite license to transact business with the Navajo Nation
and therefore is subject to the regulatory strictures promul-
gated by the Indian Affairs Commissioner. See 25 CFR pt.
141 (2000).10 But whether or not the Navajo Nation could
impose a tax on activities arising out of this relationship, an
issue not before us, it is clear that petitioner’s “Indian
trader” status by itself cannot support the imposition of the
hotel occupancy tax.
Montana’s consensual relationship exception requires that
the tax or regulation imposed by the Indian tribe have a
nexus to the consensual relationship itself. In Strate, for
example, even though respondent A–1 Contractors was on
the reservation to perform landscaping work for the Three
Affiliated Tribes at the time of the accident, we nonetheless
held that the Tribes lacked adjudicatory authority because
the other nonmember “was not a party to the subcontract,
and the [T]ribes were strangers to the accident.” 520 U. S.,
at 457 (internal quotation marks and citation omitted). A
nonmember’s consensual relationship in one area thus does
not trigger tribal civil authority in another—it is not “in for
a penny, in for a Pound.” E. Ravenscroft, The Canterbury
Guests; Or A Bargain Broken, act v, sc. 1. The hotel occu-
pancy tax at issue here is grounded in petitioner’s relation-
ship with its nonmember hotel guests, who can reach the
Cameron Trading Post on United States Highway 89 and
10 Although the regulations do not “preclude” the Navajo Nation from
imposing upon “Indian traders” such “fees or taxes [it] may deem appro-
priate,” the regulations do not contemplate or authorize the hotel occu-
pancy tax at issue here. 25 CFR § 141.11 (2000).

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Arizona Highway 64, non-Indian public rights-of-way. Peti-
tioner cannot be said to have consented to such a tax by
virtue of its status as an “Indian trader.”
Although the Court of Appeals did not reach Montana’s
second exception, both respondents and the United States
argue that the hotel occupancy tax is warranted in light of
the direct effects the Cameron Trading Post has upon the
Navajo Nation. Again noting the Navajo Nation’s provision
of tribal services and petitioner’s status as an “Indian
trader,” respondents emphasize that petitioner employs al-
most 100 Navajo Indians; that the Cameron Trading Post
derives business from tourists visiting the reservation; and
that large amounts of tribal land surround petitioner’s iso-
lated property.11 Although we have no cause to doubt re-
spondents’ assertion that the Cameron Chapter of the Nav-
ajo Nation possesses an “overwhelming Indian character,”
Brief for Respondents 13–14, we fail to see how petitioner’s
operation of a hotel on non-Indian fee land “threatens or has
some direct effect on the political integrity, the economic
security, or the health or welfare of the tribe.” Montana,
supra, at 566. 12
11 The record does not reflect the amount of non-Indian fee land within
the Navajo Nation. A 1995 study commissioned by the United States
Department of Commerce states that 96.3 percent of the Navajo Nation’s
16,224,896 acres is tribally owned, with allotted land comprising 762,749
acres, or 4.7 percent, of the reservation. See Economic Development Ad-
ministration, V. Tiller, American Indian Reservations and Indian Trust
Areas 214 (1995). The 1990 Census reports that that 96.6 percent of
residents on the Navajo Nation are Indian. Joint Lodging 182. The
Cameron Chapter of the Navajo Nation, in which petitioner’s land lies, has
a non-Indian population of 2.3 percent. See id., at 181.
12 Although language in Merrion referred to taxation as “necessary to
tribal self-government and territorial management,” 455 U. S., at 141, it
did not address assertions of tribal jurisdiction over non-Indian fee land.
Just as with Montana’s first exception, incorporating Merrion’s reasoning
here would be tantamount to rejecting Montana’s general rule. In Strate
v. A–1 Contractors, 520 U. S. 438, 459 (1997), we stated that Montana’s
second exception “can be misperceived.” The exception is only triggered
by nonmember conduct that threatens the Indian tribe; it does not broadly

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658 ATKINSON TRADING CO. v. SHIRLEY
Opinion of the Court
We find unpersuasive respondents’ attempt to augment
this claim by reference to Brendale v. Confederated Tribes
and Bands of Yakima Nation, 492 U. S. 408, 440 (1989) (opin-
ion of Stevens, J.). In this portion of Brendale, per the
reasoning of two Justices, we held that the Yakima Nation
had the authority to zone a small, non-Indian parcel located
“in the heart” of over 800,000 acres of closed and largely
uninhabited tribal land. Ibid. Respondents extrapolate
from this holding that Indian tribes enjoy broad authority
over nonmembers wherever the acreage of non-Indian fee
land is minuscule in relation to the surrounding tribal land.
But we think it plain that the judgment in Brendale turned
on both the closed nature of the non-Indian fee land 13 and
the fact that its development would place the entire area “in
jeopardy.” Id., at 443 (internal quotation marks and citation
omitted).14 Irrespective of the percentage of non-Indian fee
land within a reservation, Montana’s second exception
grants Indian tribes nothing “ ‘beyond what is necessary to
permit the exercise of civil authority wherever it might be considered
“necessary” to self-government. Thus, unless the drain of the nonmem-
ber’s conduct upon tribal services and resources is so severe that it ac-
tually “imperil[s]” the political integrity of the Indian tribe, there can be
no assertion of civil authority beyond tribal lands. Montana, 450 U. S.,
at 566. Petitioner’s hotel has no such adverse effect upon the Navajo
Nation.
13 Justice Stevens’ opinion in Brendale sets out in some detail the
restrictive nature of “closed area” surrounding the non-Indian fee land.
See 492 U. S., at 438–441. Pursuant to the powers reserved it in an 1855
treaty with the United States, the Yakima Nation closed this forested area
to the public and severely limited the activities of those who entered the
land through a “courtesy permit system.” Id., at 439 (internal quotation
marks and citation omitted). The record here establishes that, save a few
natural areas and parks not at issue, the Navajo Reservation is open to
the general public. App. 61.
14 See Strate v. A–1 Contractors, supra, at 447, n. 6 (noting that the
Yakima Nation “retained zoning authority . . . only in the closed area”);
Duro v. Reina, 495 U. S., at 688 (noting that zoning “is vital to the mainte-
nance of tribal integrity and self-determination”).

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659 Cite as: 532 U. S. 645 (2001)
Souter, J., concurring
protect tribal self-government or to control internal rela-
tions.’ ” Strate, 520 U. S., at 459 (quoting Montana, 450
U. S., at 564). Whatever effect petitioner’s operation of the
Cameron Trading Post might have upon surrounding Navajo
land, it does not endanger the Navajo Nation’s political integ-
rity. See Brendale, supra, at 431 (opinion of White, J.)
(holding that the impact of the nonmember’s conduct “must
be demonstrably serious and must imperil the political integ-
rity, the economic security, or the health and welfare of the
tribe”).
Indian tribes are “unique aggregations possessing attri-
butes of sovereignty over both their members and their ter-
ritory,” but their dependent status generally precludes ex-
tension of tribal civil authority beyond these limits. United
States v. Mazurie, 419 U. S. 544, 557 (1975). The Navajo
Nation’s imposition of a tax upon nonmembers on non-Indian
fee land within the reservation is, therefore, presumptively
invalid. Because respondents have failed to establish that
the hotel occupancy tax is commensurately related to any
consensual relationship with petitioner or is necessary to
vindicate the Navajo Nation’s political integrity, the pre-
sumption ripens into a holding. The judgment of the Court
of Appeals for the Tenth Circuit is accordingly
Reversed.
Justice Souter, with whom Justice Kennedy and
Justice Thomas join, concurring.
If we are to see coherence in the various manifestations of
the general law of tribal jurisdiction over non-Indians, the
source of doctrine must be Montana v. United States, 450
U. S. 544 (1981), and it is in light of that case that I join the
Court’s opinion. Under Montana, the status of territory
within a reservation’s boundaries as tribal or fee land may
have much to do (as it does here) with the likelihood (or not)
that facts will exist that are relevant under the exceptions
to Montana’s “general proposition” that “the inherent sover-

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660 ATKINSON TRADING CO. v. SHIRLEY
Souter, J., concurring
eign powers of an Indian tribe do not extend to the activities
of nonmembers of the tribe.” Id., at 565. That general
proposition is, however, the first principle, regardless of
whether the land at issue is fee land, or land owned by or
held in trust for an Indian tribe.