The Jicarilla Apache Tribe in New Mexico operated numerous on-reservation oil and gas leases under the Indian Mineral Leasing Act of 1938 (IMLA), 25 U.S.C. § 396. Cotton Petroleum Corporation (Cotton) (plaintiff) was a non-Indian company that produced oil and gas under a lease with the Apache Tribe. Beginning in 1972, the Apache Tribe assessed an 8 percent tax on the oil and gas extracted by Cotton. This tax was contested but upheld by the United States Supreme Court. The State of New Mexico (defendant) also levied a state tax on oil and gas production extracted on the reservation. Cotton challenged New Mexico’s tax in state court. Cotton argued that New Mexico should not be allowed to tax oil and gas production on an Indian reservation because New Mexico did not expend significant resources to support such production. The Apache Tribe intervened, arguing that imposition of state taxes interfered with tribal taxes on oil and gas and decreased Apache Tribe revenues by discouraging companies from working on the reservation. The New Mexico state courts upheld the state tax. The United States Supreme Court granted certiorari.