The U.S. Supreme Court case Squire v. Capoeman revolved around the issue of whether income derived from the sale of timber on allotted, restricted Indian lands is subject to federal income tax. The respondents were members of the Quinaielt Tribe in Washington state who sold timber from their land and were subsequently assessed for unpaid taxes by petitioner, a collector for Internal Revenue Service (IRS). They argued that under an 1887 law known as General Allotment Act or Dawes Act, they are exempted from such taxation until their lands have been freed of restrictions against alienation. In its decision, the Supreme Court sided with Capoeman et ux., ruling that Congress intended to protect Indians' economic interest in allotments until termination of federal supervision over said property; thus making any gain realized by them through sale or exploitation not taxable under existing laws. This interpretation was based on a clause within Dawes Act which states that upon issuance of fee patents after expiration period set forth in statute "all restrictions as to sale...shall be removed". Therefore, it was held that IRS's imposition violated this provision.

There was no dissenting opinion in the Supreme Court case Squire, Collector of Internal Revenue v. Capoeman et ux., 1955. The decision was unanimous, with all justices agreeing that the income derived from timber on allotted lands is exempt from federal taxation under existing statutes and treaties governing Native American affairs.