OPINION
LOPEZ, Judge.The taxpayer appeals an order and decision of the Bureau of Revenue imposing gross receipts taxes, interest and penalties. Section 72-16A-4, N.M.S.A.1953 (Repl. Vol. 10, pt. 2, Supp.1975). We affirm.
The taxpayer presents four issues for reversal: (1) that the tax was illegally imposed because the taxpayer’s activities were on Indian land; (2) that the Bureau had no authority to retain an erroneous overpayment of taxes in partial satisfaction of a disputed tax due under a separate transaction; (3) that the assessment of penalties was arbitrary; (4) and that the Commissioner’s role as a decision-maker violated due process.
The taxpayer is a Washington corporation, qualified to do business in New Mexico, which is presently constructing a dam on the Nambe Pueblo. The taxpayer is being paid for this dam by the United States Department of the Interior, Bureau of Reclamation.
(1) State Taxation Jurisdiction
The taxpayer argues that the state is without jurisdiction to impose a tax on it. The argument rests on the location of the activity which gave rise to the tax — the Nambe Pueblo. The territorial view of sovereignty has been subjected to a reexamination when the taxation is of non-Indians. Activities by non-Indians on Indian land have generally been held not exempt from state taxation. Oklahoma Tax Commission v. Texas Co., 336 U.S. 342, 69 S.Ct. 561, 93 L.Ed. 721 (1949); Thomas v. Gay, 169 U.S. 264, 18 S.Ct. 340, 42 L.Ed. 740 (1898); Agua Caliente Band of Mission Indians v. County of Riverside, 442 F.2d 1184 (9th Cir. 1971), cert. denied, 405 U.S. 933, 92 S.Ct. 930, 30 L.Ed.2d 809 (1972); Norvell v. Sangre de Cristo Development Company, Inc., 372 F.Supp. 348 (D.N.M.1974), rev’d on other grounds, 519 F.2d 370 (10th Cir. 1975); Prince v. Board of Education of Central Consolidated Independent School District No. 22, 88 N.M. 548, 543 P.2d 1176 (1975); Chief Seattle Properties, Inc. v. Kitsap County, 86 Wash. 2d 7, 541 P.2d 699 (1975). However, the inquiry does not end with the recognition that the tax is on a non-Indian entity because the tax still has the potential for interference with protected rights. The two major issues are whether the subject of the tax is governed by substantial federal regulation and whether the imposition of the tax will infringe on Indian rights of self-government.
The federal preemption doctrine was developed in Warren Trading Post Co. v. Arizona Tax Comm’n, 380 U.S. 685, 85 S.Ct. 1242, 14 L.Ed.2d 165 (1965), in which the Supreme Court struck down a gross receipts tax on the income of a company which operated a trading post on the Navajo reservation. The Court discerned in the existing federal regulations an intent that the state not impose additional burdens on the traders or those with whom they dealt. There are no comparable existing regulations in this case. The taxpayer’s argument in this case is that federal policies respecting the Indians would be frustrated by the taxation of a contractor executing a federal contract. Insofar as the taxpayer claims immunity solely because he is carrying out a federal contract, he is making the same argument which has been rejected in numerous federal instrumentality cases. See, e.g., Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973). No specific federal policy regarding the Indians has been shown to have been frustrated or impaired by the Bureau’s actions in taxing the contractor.
The other operative principle governing the state’s power to tax non-Indians for their activities on Indian land is derived from Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959). The Court in a later case characterized Williams as summarizing the way in which: “ * * notions of Indian sovereignty have been adjusted to take account of the State’s legitimate interests in regulating the affairs of non-Indians.” McClanahan v. Arizona State Tax Comm’n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973). The Williams test is: “ * * * whether the state action infringed on the right of reservation Indians to make their own laws and be ruled by them.” Williams v. Lee, supra. In Williams because there was a tribal court which could decide the dispute between the non-Indian trader and the Indian defendants, the jurisdictional claims of the state court were denied. In McClanahan the Court noted that Williams was designed to resolve conflicts between the state and the Indian tribe “ * * * by providing that the State could protect its interest up to the point where tribal self-government would be affected.” McClanahan v. Arizona State Tax Comm’n, supra. In the case before us the taxpayer has failed to point to any specific way in which the tribe will be affected, relying instead on a general invocation of sovereignty. The Nambe Indians are not paying the contractor; thus from all that appears of record, the Nambe Indians will not sustain any direct financial burden as a result of this tax. The Nambe Indians have not themselves asserted tax jurisdiction over the taxpayer’s activities, although the record reveals that discussions are being had about such a step. There is no indication from the record that the Pueblo will sustain any direct effects as a result of the tax, and therefore no conflict with tribal sovereignty is shown.
In addition to the broad principles of preemption and sovereignty, the taxpayer points to several statutory provisions which he argues prohibit the imposition of this tax. Because the tax is on a non-Indian, none have the dispositive effect for which the taxpayer contends, and their effect must be determined by the principles governing conflicts between Indian sovereignty and state law discussed above.
Buck Act
The Buck Act (4 U.S.C. § 105 et seq. (1970)) provides for imposition of taxes in certain federal areas. Included among these taxes are gross receipts taxes. 4 U.S.C. § 110(c). The exemption for Indians found in the Act applies only to taxes “on or from any Indian”. 4 U.S.C. § 109 (1970). Thus, although the Act does not necessarily give the state a power to tax (see, Warren Trading Post v. Arizona Tax Comm’n, 380 U.S. 691 at n. 18, 85 S.Ct. 1242), it does not in this instance restrict the state’s power.
Disclaimer
The taxpayer argues that New Mexico, in its Constitution, disclaimed all right to tax activities on Indian lands. The disclaimer is of “all right and title” to Indian lands. N.M.Const. Art. XXI, § 2. This disclaimer has been interpreted to be a disclaimer of proprietary interest, not of governmental control. Sangre De Cristo Dev. Corp., Inc. v. City of Santa Fe, 84 N.M. 343, 503 P.2d 323 (1972). See Organized Village of Kake v. Egan, 369 U.S. 60, 82 S.Ct. 562, 7 L.Ed.2d 573 (1962). Thus, taxation of activities of non-Indians on Indian land does not violate this provision.
Public Law 83-280
The taxpayer argues that since New Mexico did not assume jurisdiction over the Nambe Pueblo under Public Law 83-280 (18 U.S.C. § 1162 (1970) and 28 U.S. C. § 1360 (1970)) New Mexico cannot assert taxing jurisdiction over activities on Indian lands.
In State v. Warner, 71 N.M. 418, 379 P.2d 66 (1963), the New Mexico Supreme Court held that the state’s failure to assume jurisdiction under this Act did not prevent the imposition of the state’s criminal laws on a non-Indian for his actions on the reservation. In Paiz v. Hughes, 76 N.M. 562, 417 P.2d 51 (1966), it was explained that the Williams test, discussed above, must be used to determine the state’s jurisdiction over a non-Indian for actions on Indian lands.
Indian Trade and Intercourse Act
The taxpayer argues that the federal statutes regulating Indian traders (25 U.S.C. § 261-64 (1970)) preempt taxation of his activities, as in Warren Trading Post Company v. Arizona Tax Comm’n, supra. Since the taxpayer is not an Indian trader, the Act does not appear to have any regulatory effect on him.
Appropriations Act
The taxpayer also relies on a provision contained in the Appropriations Act of March 3, 1905 (33 Stat. 1048, Chap. 1479, § 1). In relevant portion this Act states that “ * * * all personal property furnished said Indians [the Pueblo Indians of New Mexico] by the United States * * * ” shall be free from taxation. Although the contract is arguably “personal property”, it was not given to the Indians, but rather to the non-Indian taxpayer, and the section is inapplicable.
Due Process
The taxpayer argues that the state cannot tax him because it has not extended any benefits to the Nambe Indians. Wisconsin v. J. C. Penney Co., 311 U.S. 435, 61 S.Ct. 246, 85 L.Ed.2d 267 (1940). The state’s ability to tax this taxpayer is not controlled by the lack of benefits given the Nambe Indians since the taxpayer received benefits from the state while present here.
(2) Refund
At the time the taxpayer was engaged in construction of the Nambe Dam, it was also subcontractor on an unrelated project in Las Cruces. Through an error the taxpayer paid gross receipts on the Las Cruces project, which were not owed. The Bureau retained these receipts and applied them to the amount due on the Nambe project. No demand for repayment was made and the Commissioner was within his discretion in applying the amount wrongfully paid to the amount he determined to be owing. Section 72-13^13(C), N.M.S.A. 1953 (Repl.Vol. 10, pt. 2, Supp.1975).
(3) Penalties Imposed
The taxpayer contests the decision of the Commissioner to assess a penalty and interest under § 72-13-80 and § 72-13-82, N.M.S.A.1953 (Repl. Vol. 10, pt. 2, Supp.1975) as arbitrary and without foundation. The evidence was conflicting as to-the taxpayer’s negligence and the Commissioner’s decision was supported by substantial evidence.
(4) Lack of Impartial Arbiter
The taxpayer raises several points relating to unfairness in the procedure below, including the failure of the Bureau to supply an impartial arbiter. These arguments were not made below and will not be considered here. Section 72-13-39, N.M. S.A.1953 (Repl. Vol. 10, pt. 2, Supp.1975).
The decision and order of the Commissioner are hereby affirmed.
IT IS SO ORDERED.
HERNANDEZ, J„ concurs. SUTIN, J., concurs specially.