MEMORANDUM OPINION
WILBUR, Judge: In these consolidated cases respondent determined the following Federal income tax deficiencies and additions to tax:
| DOCKET NO. 469-77 |
| ROBERT SATIACUM |
| | Additions to Tax |
| Year | Deficiency | Section 6651(a) 1 | Section 6653(a) |
| 1971 | $145,515 | $36,379 | $ 7,276 |
| 1972 | 439,583 | 109,896 | 21,979 |
| 1973 | 516,250 | 129,063 | 25,813 |
| 1974 | 761,054 | 190,264 | 38,053 |
|
| SUSIE SATIACUM |
|
| 1971 | $ 64,711 | $16,178 | $ 3,236 |
| 1972 | 211,587 | 52,897 | 10,579 |
| 1973 | 249,825 | 62,456 | 12,491 |
| 1974 | 372,139 | 93,035 | 18,607 |
|
| DOCKET NO. 16540-80 |
|
| ROBERT SATIACUM |
|
| 1975 | $393,411 | $98,353 | $19,671 |
| 1976 | 361,453 | 90,363 | 18,073 |
In a supplemental stipulation of facts filed July 12, 1985, the parties agreed that petitioners are not liable for the additions to tax under sections 6651(a) and 6653(a).
After concessions, the only issue for decision is whether income earned from the retail sale of cigarettes and other tobacco products and from a commercial fishing operation conducted by an enrolled member of the Puyallup Indian Tribe is subject to Federal income taxation.
These cases were submitted under Rule 122. 2 The stipulation of facts is incorporated herein by this reference. The pertinent facts are summarized below.
Robert Satiacum and Susie Satiacum (petitioners) resided in Tacoma, Washington at the time their petitions were filed in these cases. Robert Satiacum (petitioner) is an enrolled member of the Puyallup Indian Tribe.
During the years 1971 through 1976, petitioner operated a retail tobacco store (smokeshop) selling cigarettes and other miscellaneous products. The net profits from the cigarette and tobacco sales were as follows:
| Year | Net Profit |
| 1971 | $35,000 |
| 1972 | 95,000 |
| 1973 | 110,000 |
| 1974 | 150,000 |
| 1975 | 300,000 |
| 1976 | 330,000 |
The land upon which the smokeshop was situated was acquired by petitioner's father and has been held in trust by the United States. Petitioner is a "noncompetent Indian" in that he cannot alienate or encumber the land without the consent of the Secretary of the Interior. See Stevens v. Commissioner,452 F.2d 741, 742 n. 1 (9th Cir. 1971), affg. in part and revg. in part 52 T.C. 330 (1969), supplemental opinion 54 T.C. 351 (1970). In addition, petitioner had a net profit from the sale of fish in 1974. The fishing income was derived from the operation of a commercial fishing business at various locations on Puget Sound.
For the years 1971 through 1976, petitioners did not file Federal income tax returns. In the notices of deficiency, respondent determined that the net earnings from the smokeshop and the commercial fishing operation are includable in petitioners' gross income. They do not contest the correctness of the amounts of income determined by respondent in the notices of deficiency for the years 1971 through 1976. They argue, however, that such income is exempt from Federal income taxation.
Section 61 provides that income "from whatever source derived" is subject to Federal income taxation. It is now well settled that the income of American Indians falls within the ambit of section 61. An exception to this general rule is made if a taxpayer can identify express exemptive language in a statute or treaty providing that these amounts are not required to be included in gross income. Dillon v. United States,792 F.2d 849 (9th Cir. 1986), affg. F. Supp. , ( W.D. Wash. 1985, 85-1 USTC par. 9150, 55 AFTR2d 85-705), affg. Cross v. Commissioner,83 T.C. 561 (1984) (Court reviewed), affg. Hargrove v. Commissioner,T.C. Memo. 1985-113, affg. Gord v. Commissioner,T.C. Memo. 1984-517; United States v. Anderson,625 F.2d 910, 913 (9th Cir. 1980); Commissioner v. Walker,326 F.2d 261, 263 (9th Cir. 1964), affg. in part and revg. in part 37 T.C. 962 (1962); Karmun v. Commissioner,82 T.C. 201, 204 (1984);Hoptowit v. Commissioner,78 T.C. 137 (1982), affd. 709 F.2d 564 (9th Cir. 1983); Jourdain v. Commissioner,71 T.C. 980 (1979), affd. 617 F.2d 507 (8th Cir. 1980). Petitioner's status as an Indian is not alone sufficient to insulate him from liability for the payment of Federal income tax. Superintendent Five C. Tribes v. Commissioner,295 U.S. 418 (1935); Choteau v. Burnet,283 U.S. 691 (1931). Petitioners have been unable to identify an express exemptive provision in any Treaty or Act of Congress. Thus, we sustain respondent's determination that the income from the smokeshop and the commercial fishing business is taxable under section 61.
Petitioners contend that the Medicine Creek Treaty of 1854, 10 Stat. 1132, is the definitive document regulating relations between the United States and the Puyallup Indian Tribe. In a recent Court reviewed opinion, we considered this treaty in its historical context and we concluded that no express or implied provision exists to exempt petitioners' smokeshop and fishing income from taxation. Cross v. Commissioner,83 T.C. 561 (1984), affd. Dillon v. United States,supra.See also Saunooke v. United States,8 Cl. Ct. 327 (1985), on appeal (Fed. Cir., April 2, 1986).
Petitioners further argue that their smokeshop income is exempt from taxation under the General Allotment Act of 1887, 24 Stat. 388, 25 U.S.C. sec. 331 et seq. (1982) (the Act). 3 Even if we assume that petitioners' trust land comes under the jurisdiction of that Act, no exemption from taxation would exist on these facts. The Supreme Court held that the Act exempts from taxation income from land held in trust if such income is "directly derived" from the land. Squire v. Capoeman,351 U.S. 1 (1956). The numerous courts that have held income exempt under the Act have done so only in factual situations where the land itself was being exploited.4 The Ninth Circuit, in affirming an opinion of this Court, recently held that income from a smokeshop located on trust property is not directly derived from the land and is therefore fully subject to Federal taxation. Dillon v. United States,supra.5 For the reasons expressed in that opinion, we reach the same conclusion in the instant cases. 6
Petitioners argue that the income produced by their commercial fishing business should also be tax exempt. This issue was decided adversely to petitioners by this Court in Earl v. Commissioner,78 T.C. 1014 (1982). In Earl, the taxpayer, a puyallup Indian, worked as a crew member on a commercial fishing vessel. He argued that the income he received in his capacity as a crew member was exempt from Federal taxation under Article Three of the Medicine Creek Treaty of 1854, 10 Stat. 1132. Article Three states that the right to fish in the usual and accustomed areas is secured to the Puyallup Indians in common with all other citizens of that region. That provision has been interpreted to mean that Indians would be entitled to share the fish caught equally with other residents. United States v. State of Washington,384 F. Supp. 312 (W.D. Wash. 1974), affd. 520 F.2d 676 (9th Cir. 1975). Article Three, however, does not contain any language dealing with the Federal taxation of fishing income and no such exemption can arise by implication. Mescalero Apache Tribe v. Jones,411 U.S. 145, 156 (1973); Fry v. United States,557 F.2d 646, 649 (9th Cir. 1977);Jourdain v. Commissioner,71 T.C. 980, 990 (1979), affd. 617 F.2d 507 (8th Cir. 1980).
As previously indicated, the Supreme Court held that income directly derived from land allotted to an Indian under the General Allotment Act of 1887, 24 Stat. 388, 25 U.S.C. sec. 331 et seq. (1982), is exempt from Federal income taxation. Squire v. Capoeman,supra. But the reasoning in Squire has no application to the facts of the instant cases because petitioner "has no individual fishing rights analogous to an allotment under the General Allotment Act of 1887." Earl v. Commissioner,supra at 1019 (citations omitted).7 According to this Court's interpretation of the Medicine Creek Treaty of 1854, 10 Stat. 1132:
[Taxpayer's] fishing rights under the treaty as a member of the Puyallup Tribe are more comparable to his rights as a member of the tribe in unallotted land on the reservation than to individual rights in allotted land. Similarly, [taxpayer's] income from the exercise of the tribe's communal fishing rights would be more analogous to income obtained from unallotted tribal land and not to income derived from allotted land, which was involved in Squire v. Capoeman * * * [78 T.C. at 1019.]
We conclude that, regardless of whether petitioners were exercising their tribal rights while engaging in their commercial fishing operation, their income is taxable.
To reflect concessions and our conclusions with respect to the disputed matters,
Decisions will be entered under Rule 155.