Members of two of North Dakota's American Indian tribes say the state is illegally pocketing more than $2 million in fuel taxes annually from tribal members who buy gasoline on reservations.

North Dakota's Supreme Court has been asked to sort through the dispute, and the justices are hearing arguments in the case today.

Both the state Tax Department and four plaintiffs in the case, including a Mandaree road and building contractor, are challenging rulings by Northwest District Judge Gary Holum.

The plaintiffs say tribal members who buy fuel on reservations should not have to pay North Dakota's motor fuels tax, which is 21 cents a gallon. They claim tribal members pay $2.1 million annually in state fuel taxes, while the state estimates the sum is roughly half that.

No other state exempts Indians who buy fuel on reservations from its state tax, said Dan Rouse, an assistant attorney general for the Tax Department.

Holum has ruled the tax should not apply to tribal members who buy fuel on reservations, but he has not ordered the state to pay refunds. The judge has declined to make the lawsuit into a class action, which would make all tribal members who bought gas on North Dakota reservations potentially eligible to get their tax payments back.

The case does not affect the Standing Rock Sioux reservation, where the tribe charges its own 21-cents-a-gallon tax on gasoline and diesel fuel. The Tax Department administers the tax, and the tribe collected just over $300,000 in revenue during its last budget year.

In legal filings, the Tax Department is asking the Supreme Court to conclude that a 1936 federal law, called the Hayden-Cartwright Act, allows North Dakota to collect fuel taxes from tribal members who buy gasoline on reservations.

The tribal members want the Supreme Court to affirm an injunction that bars the state from keeping the fuel taxes they pay. Three of the four plaintiffs also are challenging Holum's decision to drop them from the lawsuit, on the grounds that the Tax Department never refused to pay them refunds.

Joan Mann, a member of the Three Affiliated Tribes, and two Turtle Mountain Band of Chippewa members, Tracy Wilkie and Christa Monette, were dismissed from the case earlier.

Ken Danks, owner of TEK Enterprises, a Mandaree road contractor, was allowed to continue the lawsuit because the Tax Department refused his request for a refund for fuel taxes he paid in 2000 and 2001.

The tribal members' attorney, Vance Gillette, of Minot, argues Congress has not given explicit permission for North Dakota to collect state fuel taxes from Indian buyers on reservations.

"The tax is unenforceable unless there is a clear congressional authorization for the tax," Gillette wrote in a court filing.

Gillette also contends the Tax Department's appeal was filed too late, and the Supreme Court does not have jurisdiction over it.

"The state agents refuse refunds, and attempt to stall this case," Gillette wrote in a Supreme Court filing. "Such tactics merely delay the inevitable, and delay justice for the Indian consumers stuck with the illegal taxes."

Almost all of North Dakota's tax collections for gasoline and diesel fuel are used to build or repair roads. The state Department of Transportation maintains 323 miles of roads on the state's Indian reservations.