North Dakota's Supreme Court has dismissed a lawsuit that sought to block the Tax Department from collecting state fuel taxes from American Indians who buy gasoline on their own reservations.

Its ruling included a request that the Legislature attempt to resolve the dispute, which was brought by members of the Three Affiliated Tribes and Turtle Mountain Band of Chippewa.

Rick Clayburgh, the state tax commissioner, said Thursday that he would be exploring some potential solutions with lawmakers. Dan Rouse, an assistant attorney general who handled the case, said the Supreme Court's dismissal left the status of the dispute uncertain.

"The Supreme Court is simply saying, 'We don't see what we needed to see to grab this case on its own merits and run with it,' " Rouse said.

Vance Gillette, an attorney for the case's Indian plaintiffs, said further legal action is possible.

"These taxes are illegal. People shouldn't have to pay this," he said Thursday.

Both the Tax Department and the Indian plaintiffs in the case were challenging rulings by the case's trial judge, Northwest District Judge Gary Holum, of Minot.

Holum had ruled the Tax Department could not collect state fuel taxes from tribal members who are buying gasoline on their own reservations. However, he agreed to delay a permanent injunction against the Tax Department while the case was being appealed.

Three of the case's four Indian plaintiffs are contesting Holum's decision to drop them from the lawsuit, and the judge's refusal to make the lawsuit into a class action. Gillette said 4,000 to 5,000 tribal members could benefit if the case were made into a class action.

In dismissing the appeal Wednesday, the Supreme Court said in a unanimous ruling that Holum's earlier rulings in the case were not final, and therefore not ready for a Supreme Court appeal. Holum retired from the bench at the end of last year.

Justice Carol Ronning Kapsner, who wrote the decision, said the plaintiffs have indicated they would be satisfied if the Tax Department set up a procedure to refund the fuel taxes they pay. North Dakota's motor fuels tax is 21 cents a gallon.

"We urge the Legislature to address this problem," Kapsner wrote.

Lawsuits over state taxation of Indians who buy fuel on reservations are becoming more common. States have argued that a 1936 federal law, called the Hayden-Cartwright Act, that allows states to collect fuel taxes on federal military bases also applies on Indian reservations.

In recent years, however, federal and state courts have rejected this argument. Kapsner's opinion points to a 2003 South Dakota decision and a 2002 Idaho decision that said the Hayden-Cartwright Act wasn't specific enough to justify requiring Indians to pay state gas taxes on reservations.

Rouse said Idaho and Kansas both have cases pending in the U.S. Supreme Court on questions similar to those raised in the North Dakota case.