Court Below: 208 F. 3d 871 (first judgment); 210 F. 3d 389 (second judgment)
The Indian Regulatory Gaming Act (Gaming Act) provides, as relevant here, that Internal Revenue Code (Code) provisions "(including [§§]1441, 3402(q), 6041, and 6050I, and chapter 35 ...) concerning the reporting and withholding of taxes" with respect to gambling operations shall apply to Indian tribes in the same way as they apply to States. 25 U. S. C. §2719(d)(i). Chapter 35 imposes taxes from which it exempts certain state-controlled gambling activities, but says nothing about tax reporting or withholding. Petitioners, the Choctaw and Chickasaw Nations, claim that the Gaming Act subsection's explicit parenthetical reference exempts them from paying those chapter 35 taxes from which the States are exempt. Rejecting that claim, the Tenth Circuit held that the subsection applies only to Code provisions concerning tax withholding and reporting.
Held: Section 2719(d)(i) does not exempt tribes from paying the gambling-related taxes that chapter 35 imposes. Pp. 311.
(a) The subsection's language outside the parenthetical says that the subsection applies to Code provisions concerning reporting and withholding, and the other four parenthetical references arguably concern reporting and withholding. The Tribes nonetheless claim that the subsection's explicit parenthetical reference to chapter 35 expands the Gaming Act's scope beyond reporting and withholding provisions -- to the tax-imposing provisions that chapter 35 contains -- and at the very least gives the subsection an ambiguity that can be resolved by applying the canon that statutes are to be construed liberally in favor of Indians with ambiguous provisions interpreted to their benefit. Rejecting their argument reduces the chapter 35 phrase to surplusage, but there is no other reasonable reading of the statute. Pp. 34.
(b) The statute's language is too strong to give the chapter 35 reference independent operative effect. The unambiguous language outside the parenthetical says without qualification that the subsection applies to "provisions ... concerning the reporting and withholding of taxes"; and the language inside the parenthetical, prefaced with the word "including," literally says the same, since to "include" means to "contain." The use of parentheses emphasizes the fact that that which is within is meant simply to be illustrative. To give the chapter 35 reference independent operative effect would require seriously rewriting the rest of the statute. One would have to read "including" to mean what it does not mean, namely, "including ... and." To read the language outside the parenthetical as if it referred to (1) Code provisions concerning tax reporting and withholding and (2) those "concerning ... wagering operations" would be far too convoluted to believe Congress intended it. There is no reason to think Congress intended to sweep within the subsection's scope every Code provision concerning wagering. The subject matter at issue -- tax exemption -- also counsels against accepting the Tribes' interpretation. This Court can find no comparable instance in which Congress legislated an exemption through a parenthetical numerical cross-reference. Since the more plausible role for the parenthetical to play in this subsection is that of providing an illustrative list of examples, common sense suggests that "chapter 35" is simply a bad example that Congress included inadvertently, a drafting mistake. Pp. 46.
(c) The Gaming Act's legislative history on balance supports this Court's conclusion. And the canons of interpretation to which the Tribes point --that every clause and word of a statute should be given effect and that statutes are to be construed liberally in favor of the Indians with ambiguous provisions interpreted to their benefit -- do not determine how to read this statute. First, the canons are guides that need not be conclusive. Circuit City Stores, Inc. v. Adams, 532 U. S. 105, 115. To accept these canons as conclusive here would produce an interpretation that the Court firmly believes would conflict with congressional intent. Second, specific canons are often countered by some maxim pointing in a different direction. Ibid. The canon requiring a court to give effect to each word "if possible" is sometimes offset by the canon permitting a court to reject words as mere surplusage if inadvertently inserted or if repugnant to the rest of the statute. Moreover, the pro-Indian canon is offset by the canon warning against interpreting federal statutes as providing tax exemptions unless the exemptions are clearly expressed. Given the individualized nature of this Court's previous cases, one cannot say that the pro-Indian canon is inevitably stronger, particularly where the interpretation of a congressional statute rather than an Indian treaty is at issue. Pp. 611.
208 F. 3d 871 (first judgment);
The opinion of the court was delivered by: Justice Breyer.*fn2
On Writ Of Certiorari To The United States Court Of Appeals For The Tenth Circuit
In these cases we must decide whether a particular subsection in the Indian Gaming Regulatory Act, 102 Stat. 2467-2486, 25 U. S. C. §§2701-2721 (1994 ed.), exempts tribes from paying the gambling-related taxes that chapter 35 of the Internal Revenue Code imposes -- taxes that States need not pay. We hold that it does not create such an exemption.
The relevant Indian Gaming Regulatory Act (Gaming Act) subsection, as codified in 25 U. S. C. §2719(d)(i), reads as follows:
"The provisions of [the Internal Revenue Code of 1986] (including sections 1441, 3402(q), 6041, and 6050I, and chapter 35 of such Code) concerning the reporting and withholding of taxes with respect to the winnings from gaming or wagering operations shall apply to Indian gaming operations conducted pursuant to this chapter, or under a Tribal-State compact entered into under section 2710(d)(3) of this title that is in effect, in the same manner as such provisions apply to State gaming and wagering operations."
The subsection says that Internal Revenue Code provisions that "concer[n] the reporting and withholding of taxes" with respect to gambling operations shall apply to Indian tribes in the same way as they apply to States. The subsection also says in its parenthetical that those provisions "includ[e]" Internal Revenue Code "chapter 35." Chapter 35, however, says nothing about the reporting or the withholding of taxes. Rather, that chapter simply imposes taxes -- excise taxes and occupational taxes related to gambling --from which it exempts certain state-controlled gambling activities. See, e.g., 26 U. S. C. §4401(a) (1994 ed.) (imposing 0.25% excise tax on each wager); §4411 (imposing $50 occupational tax on each individual engaged in wagering business); §4402(3) (exempting state-operated gambling operations, such as lotteries).
In this lawsuit two Native American Indian Tribes, the Choctaw and Chickasaw Nations, claim that the Gaming Act subsection exempts them from paying those chapter 35 taxes from which States are exempt. Brief for Petitioners 34-36. They rest their claim upon the subsection's explicit parenthetical reference to chapter 35. The Tenth Circuit rejected their claim on the ground that the subsection, despite its parenthetical reference, applies only to Code provisions that concern the "reporting and withholding of taxes." 208 F. 3d 871, 883-884 (2000); see also 210 F. 3d 389 (2000). The Court of Appeals for the Federal Circuit, however, reached the opposite conclusion. Little Six, Inc. v. United States, 210 F. 3d 1361, 1366 (2000). We granted certiorari in order to resolve the conflict. We agree with the Tenth Circuit.
The Tribes' basic argument rests upon the subsection's explicit reference to "chapter 35" -- contained in a parenthetical that refers to four other Internal Revenue Code provisions as well. The subsection's language outside the parenthetical says that the subsection applies to those Internal Revenue Code provisions that concern "reporting and withholding." The other four parenthetical references are to provisions that concern, or at least arguably concern, reporting and withholding. See 26 U. S. C. §1441 (withholding of taxes for nonresident alien); §3402(q) (withholding of taxes from certain gambling winnings); 26 U. S. C. §6041 (reporting by businesses of payments, including payments of gambling winnings, to others); §6050I (reporting by businesses of large cash receipts, arguably applicable to certain gambling winnings or receipts).
But what about chapter 35? The Tribes correctly point out that chapter 35 has nothing to do with "reporting and withholding." Brief for Petitioners 28-29. They add that the reference must serve some purpose, and the only purpose that the Tribes can find is that of expanding the scope of the Gaming Act's subsection beyond reporting and withholding provisions -- to the tax-imposing provisions that chapter 35 does contain. The Gaming Act therefore must exempt them (like States) from those tax payment requirements. The Tribes add that at least the reference to chapter 35 makes the subsection ambiguous. And they ask us to resolve the ambiguity by applying a special Indian-related interpretative canon, namely, " `statutes are to be ...