Chickasaw Nation v. United States

The operative language of § 2719(d) unambiguously covers only Internal Revenue Code provisions concerning the reporting and withholding of taxes on gaming winnings. Chapter 35 instead imposes wagering-related excise and occupational taxes. Although the parenthetical lists chapter 35 among provisions “including” reporting-and-withholding provisions, the word “including” makes the list illustrative rather than independently operative.

Giving chapter 35 the effect the Nations sought would require rewriting the statute. The Court would have to treat “including” as if it meant “including and,” or otherwise alter the provision so that it addressed taxation as well as reporting and withholding. The Nations offered a grammatically possible alternative reading, but the Court found it too convoluted and implausibly broad because it would sweep in every Code provision concerning wagering.

Congress ordinarily expresses a tax exemption explicitly. The Court found no comparable example in which Congress created an exemption through an indirect numerical cross-reference, particularly one embedded in a parenthetical. The better explanation was that chapter 35 was an erroneous example left in the statute after the bill was revised, not an affirmative grant of a tax exemption.

The legislative history reinforced that conclusion. An early Senate bill applied Code provisions concerning both “taxation” and reporting and withholding; under that wording, a reference to chapter 35 would have made sense. The committee later deleted “taxation” but retained the chapter 35 cross-reference. Nothing showed that Congress deliberately substituted the cross-reference for the deleted taxation language, and a post-enactment letter from one bill sponsor could not overcome the enacted text and drafting history.

The Court acknowledged that its reading leaves the chapter 35 reference without operative effect. But canons are interpretive guides, not mandatory commands. In context, the reference could be treated as an inadvertently retained and therefore defective example rather than a basis for changing the operative language of the statute.

The Indian canon applies when a statute is fairly capable of more than one interpretation. The Court concluded that the Nations' proposed reading was not a fairly possible reading of the text because it would effectively restore the word “taxation,” which Congress had removed from the bill.

The pro-Indian canon also conflicted with the established rule that federal tax exemptions must be clearly expressed and cannot rest on implication. The Court declined to assign automatic priority to the Indian canon in a statutory tax case and held that the competing canons could not displace Congress's evident choice to limit § 2719(d) to reporting and withholding provisions.