In the case of United States v. John et al., 1977, the Supreme Court ruled that Mississippi could not tax income derived from lands held in trust by the federal government for Native American tribes. The Choctaw Indians had received these lands as part of a treaty with the U.S. Government in 1830 and were exempted from state taxation under federal law. However, Mississippi imposed an income tax on tribal members who earned money from these lands through farming or other activities. The court found this to be illegal because it violated both federal laws protecting Indian rights and treaties between tribes and the U.S Government which explicitly stated that such land "shall remain forever free" from any state taxes.

In the dissenting opinion for United States v. John et al., Justice William Rehnquist disagreed with the majority's interpretation of federal law and its application to tribal lands. He argued that Congress, in passing relevant legislation, did not intend to grant tribes exclusive jurisdiction over their lands but rather sought a balance between state and tribal authority. The majority's decision, he contended, upset this balance by effectively removing state jurisdiction entirely without clear congressional intent to do so. Furthermore, he expressed concern about potential implications for non-tribal members living on or near reservations who might be subject to tribal laws despite having no political representation within the tribe itself.