In the case of Oklahoma Tax Commission v. Chickasaw Nation, 1994, the U.S. Supreme Court ruled that a state cannot impose its income tax and motor fuel sales tax on an Indian tribe or its members residing within tribal territory without explicit authorization from Congress. The court held that while states have broad power to levy taxes under their sovereign authority, this does not extend to Indian tribes due to their unique status as domestic dependent nations with inherent sovereignty predating the Constitution. Therefore, any attempt by a state to assert taxing jurisdiction over tribal lands or members must be explicitly approved by Congress in order for it not to infringe upon these rights. This decision reaffirmed longstanding principles of federal Indian law regarding tribal sovereignty and immunity from state taxation.

In the dissenting opinion for Oklahoma Tax Commission v. Chickasaw Nation, Justice Thomas, joined by Justices O'Connor and Scalia, argued that the majority's decision was inconsistent with previous case law regarding tribal sovereignty and taxation. They contended that there is no historical or legal basis to exempt tribes from state taxes when conducting off-reservation activities. The dissenters believed that this ruling would create an unfair advantage for tribal businesses over non-tribal ones in terms of tax obligations. Furthermore, they expressed concern about potential negative impacts on states' abilities to raise revenue if tribes could avoid paying certain taxes based on their status as sovereign entities. In essence, they disagreed with the majority's interpretation of federal laws related to Indian affairs and its application of these laws in favor of tribal interests against those of state governments.