The State of New Mexico sought to impose its gross receipts tax on the several contractors who had done construction work for the Mescalero Apache Tribe on a resort complex and other projects within the boundaries of the State of New Mexico. The work was performed for the Mescaleros and on reservation lands. The trial court held that the tax was imposed on the contractors and they were liable for it to the State of New Mexico. The trial court held that the Tribe had purchased materials on the housing job constructed by Quiller Construction Company, Inc. and these purchases were not within the gross receipts tax by reason of a specific exemption.
The basic issue on this appeal is the application of the New Mexico gross receipts tax. The state act makes the materials used and work of a building contractor taxable as services. It is levied on the contractor. N.M.StatAnn. §§ 7-9-3 F, K et seq. (1978). The contractors here concerned were individuals or entities engaged in the general construction business.
The state tax is on the privilege of engaging in the business of a building contractor in the state. The contractors were engaged in such a business, and built and supervised the building of the resort and housing. There is nothing in the record to show that “all their activities” were on reservation lands and the indications are otherwise. The construction was, of course, done on Indian land and this is all the record shows. The New Mexico tax has been considered by the New Mexico courts to be a privilege tax. Mescalero Apache Tribe v. Bureau of Revenue, 88 N.M. 525, 543 P.2d 493; First Nat. Bank of Santa Fe v. Commissioner of Revenue, 80 N.M. 699, 460 P.2d 64; Bell Telephone Laboratories v. Bureau of Revenue, 78 N.M. 78, 428 P.2d 617. The incidence of the tax has been so held to be on the seller — the contractor — as the one providing the services.
The holding of a state court as to the incidence of a tax of its state is generally determinative on the consideration of the issue by the federal courts. See Kern-Lim*969erick, Inc. v. Seurlock, 347 U.S. 110, 74 S.Ct. 403, 98 L.Ed. 546, and Federal Land Bank v. Bismarck Lumber Co., 314 U.S. 95, 62 S.Ct. 1, 86 L.Ed. 65.
This court considered the same tax in United States v. State of N. M., 581 F.2d 803 (10th Cir.), and decided that the sovereignty of the United States did not prevent the imposition of this tax on a contractor providing services to the federal government on federal lands. We there also necessarily considered the incidence of this tax.
“Thus, the decisive issue in this case is whether the legal incidence of the challenged New Mexico taxes falls on the United States, regardless of where the economic burden ultimately rests. .
“The Act specifically makes the gross receipts tax applicable to the doing of business in New Mexico without reference to whether that business is with the United States and, with uniformly applied exceptions, assesses the tax upon anyone receiving compensation. There is no evidence that the tax interferes with the performance of federal functions. The tax is not directly imposed on the United States and, although the contractors pass the tax on to the United States they are not required by the Act to do so.”
The incidence of this tax cannot be different here just because Indians are involved. The tax is the same, the incidence remains the same, and it is clearly on the contractor. The Indians here are in no different a position than was the federal government in United States v. State of N. M., 581 F.2d 803 (10th Cir.).
At the outset it might be well to state what this case is not about. It is not about .the power to tax Indian lands, nor about taxation of income from Indian lands, nor the income of Indians on such lands. These issues have long been settled, and the state has disclaimed that it has any such rights. The case is also not about Indian lands generally. Instead, we are only concerned with a state privilege tax on a contractor engaged in business in New Mexico with the measure of such tax to include construction of the lands set apart for the Mescale-ros. The case is also not about an indemnity agreement whereby the Mescaleros undertook to indemnify the contractors for the tax.
The tax here concerned could have been included in the funding from the E.D.A. No reason appears why this was not done. The trial court of this stated:
“The Tribe had not budgeted such taxes as a cost in its proposal to the E.D.A. for funds to build the complex, although E. D.A. does permit inclusion of the cost of passed-on state taxes in a grant for a project. After the initial bids for various aspects of the complex were received, the Tribe told the contractors that the four percent gross receipts tax would not be due to the state and instructed them to submit alternative bids omitting such costs. The Tribe found it necessary to enter into an indemnification agreement with each contractor, agreeing to reimburse each for any such tax that might be determined to be due the state. If the taxes in question are found to be due, the amount of money owed the state is substantial, and the cost is imposed upon the Tribe by virtue of its indemnification agreements with the contractors.” Mes-calero Apache Tribe v. O’Cheskey, 439 F. Supp. 1063, at 1071-72 (D.N.M.).
The only reason this point is mentioned is because the way it was handled by the Tribe makes it appear that the incidence of the tax was on the Tribe when it was not. The point does not appear to be otherwise significant. The asserted direct “burden” on the Tribe was thus by its own election to indemnify the contractors. The result in this case should not be determined or influenced in any way by such a contractual arrangement.
It is apparent that in doing business in New Mexico the contractors here benefitted from the state laws and the state governmental activities. The trial court so found and also found the Mescaleros also so bene-fitted. As the trial court stated, the Indian *970lands concerned were obviously within New Mexico. The gross receipts tax on contractors, and all others, obviously is a cost of doing business as are the employment security taxes, social security taxes, income taxes, and all the overhead that goes into the jobs, and must be recovered from the work charges. The tax nevertheless is on the seller. An indirect burden obviously is initially on the one for whom the services are performed — thus on the Tribe or the Government. However, it is equally apparent that this indirect burden is again passed on to the users of the resort and again by them. The tax becomes dispersed. There is no way of telling where the ultimate economic burden falls. This is the reason why the initial incidence of the tax must be the determinative factor. It is the only significant matter for our consideration.
The state has extensive powers over Indians like any other persons and on reserva-: tions which may be exercised if it chooses to do so. Thus the Supreme Court in Kake Village v. Egan, 369 U.S. 60, 82 S.Ct. 562, 7 L.Ed.2d 573 (a non-reservation group), said after referring to the cases involving the authority of the states:
“These decisions indicate that even on reservations state laws may be applied to Indians unless such application would interfere with reservation self-government or impair a right granted or reserved by federal law.”
See generally, Craig, 9 N.M.L.Rev. 221. Worcester v. Georgia, 6 Pet. 515, 8 L.Ed. 483, is discussed, and it is pointed out that other decisions have reduced its scope. In the Kake opinion the Court points out as to Worcester:
“By 1880 the Court no longer viewed reservations as distinct nations. On the contrary, it was sáid that a reservation was in many cases a part of the surrounding State or Territory, and subject to its jurisdiction except as forbidden by federal law.” (Citations omitted.)
The Court then states how “the influence of state law increased rather than decreased.” This referred to the policy after 1934. The Court in the Kake opinion again mentions how Justice Marshall’s decision in Worcester, that the state cannot penetrate the reservation boundaries, “has yielded to closer analysis when confronted, in the course of subsequent developments, with diverse concrete situations.” There was no reservation involved in Kake, but it included activities provided by Treaty.
Again, the Supreme Court said in ikfes-ealero Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S.Ct. 1267, 1270, 36 L.Ed.2d 114.
“The upshot has been the repeated statements of this Court to the effect that, even on reservations, state laws may be applied unless such application would interfere with reservation self-government or would impair a right granted or reserved by federal law.”
This clearly states again the position of, or application of state laws on the Mescalero Reservation. This leaves no room for any ' doctrine of preemption. The relationship of the parties is defined. The parties are defined, and are only the state and Congress.
The fact that some of the services, and most of them, were performed on Indian land is thus not a factor to be considered under the above decisions. The tax is on the contractor and on the privilege of doing business in New Mexico. It is also apparent, as the trial court points out, there is at least an initial economic impact on the Tribe since the contractor can pass the tax along. This is the initial indirect burden, and in the normal course of events would have been absorbed in the E.D.A. funding or grant. The Tribe chose instead to accept the “indirect burden” and whether the Tribe so absorbs it until it in turn passes it on to the users of the resort, or whether the Government' does, is of no consequence. This is into the morass of indirect burdens.
Moe v. Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96, is significant in that it concerned, in part, a tax on the non-Indian buyer of cigarettes on the reservation. The Court there used the incidence of the tax, which was on the buyer, to validate it as to such sales. There, of course, was no indirect burden argument, *971but the state tax on a transaction on the reservation was upheld. The incidence of such tax was the factor considered. Here we have the tax incidence also outside and also on a non-Indian. The only difference is the indirect burden argument which is not persuasive. See also our Ute Indian Tribe v. State Tax Comm’n., 574 F.2d 1007 (10th Cir.).
In Moe v. Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96, the Court referred to McClanahan v. Arizona State Tax Comm’n., 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129, and Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114. In the footnote on page 481 of 425 U.S. (page 1645 of 96 S.Ct.) the Court said in part:
“It is thus clear that the basis for the invalidity of these taxing measures, which we have found to be inconsistent with existing federal statutes, is the Supremacy Clause, U.S.Const., Art. VI, cl. 2, and not any automatic exemptions ‘as a matter of constitutional law’ either under the Commerce Clause or the intergovernmental-immunity doctrine . . .”
In Moe the Court further observed that the tax in Warren Trading Post v.- Tax Comm’n., 380 U.S. 685, 85 S.Ct. 1242, 14 L.Ed.2d 165, was imposed directly on the seller. There was no claim in Warren that the tax could be imposed on reservation sales to non-Indians. The position of the trader in Warren as licensed and regulated was obviously a very significant factor. The Court in McClanahan v. Arizona State Tax Comm’n., 411 U.S. 164, 93 S.Ct. 1257,36 L.Ed.2d 129, explains that part of the reason was the policy of Congress as to the Navajo Reservation and tribal self-determination thereon. Warren concerned an entity long regulated by Congress. It concerned only income from sales to Indians (as presented to the Court), and was on a permanent enterprise on the reservation. The licensing in the case before us was of course a pretext or a fiction and in no way was comparable to the licensing in Warren. See the trial court finding of fact as to the licensing.
The Treaty with the Mescaleros does not assist us in arriving at a solution. The Mescaleros came under the sovereignty of the United States by the Treaty of Guadalupe Hidalgo with Mexico. The sovereignty over the Mescaleros exercised by Spain in the sixteenth and seventeenth centuries was actual as was, of course, that exercised by the government of Mexico. The sovereignty was transferred over all the inhabitants of what became New Mexico from Spain to Mexico to the United States by treaties. The record contains a “Treaty with the Apaches.” This was an agreement entered into with some Apaches, including some Mescaleros, and was ratified by Congress. It is binding on the United States but there appears to have been, at least at one time, some doubt as to whether it was binding on any Apaches except those who signed it. It is apparent from the events which followed it that the Apaches did not agree among themselves as to who was bound or which bands were bound. But be that as it may we must assume for these purposes that the Treaty was valid. It was a treaty of “peace and friendship.” As this was all it purported to be, it established no rights generally for either party nor any rights in land. See Choate v. Trapp, 224 U.S. 665, 32 S.Ct. 565, 56 L.Ed. 941. The Mescaleros were then under the complete sovereignty of the United States. The Treaty thus does not appear to be of any significance as to our problem.
Thus we are left with the non-discriminatory state gross receipts or privilege tax the incidence of which is on the building contractors. The contractors benefitted from state governmental activities and services during the time they performed the services taxed. It is obvious that the indirect burden is on the one for whom the services were performed as recognized in United States v. State of N. M., 581 F.2d 803 (10th Cir.). This indirect burden was not enough there, and it is not enough here. The only measure here is whether this indirect burden constitutes an interference with the internal affairs of the Mescaleros. It is a non-discriminatory tax levied on all contractors. It is something everybody pays. *972The indirect burden is, as we have said above, something to be again passed on as the Tribe engages in its resort and other business. It is the indirect consequence of taxes on others which reaches the Mescale-ros as do all other costs, levies and taxes on persons with whom they do business. If this is an interference, all such taxes and levies on those doing business with them, the suppliers of such persons, the wholesalers and the manufacturers are likewise an interference. All these taxes affect the money of the Mescaleros the same way, and the money available for other purposes.
We find no merit to the several other contentions and issues advanced by the appellants.
The judgment of the trial court is AFFIRMED.