WASHINGTON, D.C. ? The U.S. Supreme Court ruled today that Kansas can tax the fuel sold on American Indian reservations without violating tribal sovereignty, reversing a lower court.

In a 7-2 vote, the high court said Kansas can tax distributors who sell fuel at an Indian-owned and operated gas station near the Prairie Band Potawatomi tribe’s casino. Most the Nation Station’s fuel customers are patrons of the casino, which is 15 miles north of Topeka, Kan. (See ruling.)

Writing for the majority, Justice Clarence Thomas said the Denver-based 10th U.S. Circuit Court of Appeals was wrong in ruling that the tax violated tribal sovereignty.

“Kansas law makes clear that it is the distributor, rather than the retailer, that is liable to pay the motor fuel tax,” Thomas wrote. “While the distributors are ‘entitled’ to pass along the cost of the tax to downstream purchasers … they are not required to do so.”

The tribe had argued that it already collects taxes on fuel to pay for maintaining the reservation’s roads, which are among the worst in the nation.

Justices Ruth Bader Ginsburg and Anthony M. Kennedy dissented, arguing that the fuel is “effectively double-taxed” and may force the tribe’s gas station to operate at a deficit or go out of business.

Ginsburg also said Kansas is not gaining much through the tax – about $300,000 annually. But, in doing so, she wrote, the state is preventing the tribe from imposing its own tax.

The case is Wagnon v. Prairie Band Potawatomi Nation, 04-631.