Responding to a need expressed by New Mexico American Indian tribal leaders, this document defines and clarifies the status of reservations vis a vis the state's legal authority to impose tax. Divided into two major sections dealing with a current orientation to tax laws and the legal background upon which they are founded, this document also points out problem areas. Specifically, the document addresses: the present state of the law; the scope of tribal self-government; litigation as the least desirable method; tribal tax structure in relation to state; specific recommendations; principles and discussion; Federal control; tribal taxation of individuals; state tax of non-Indians within Indian lands; New Mexico's taxes; property tax; income tax; corporate taxes; license and Gross Receipt tax; use tax; severance tax; alcoholic beverage tax; cigarette tax; gasoline tax; inheritance tax; and motor vehicle registration. The appendices include: footnotes; statutes and laws; opinions and memoranda of the Department of Interior; selected bibliography; cases; New Mexico Constitution, Article XXI; Oil and Gas Severance Tax Act; Gross Receipt Regulation 3 (F) :9; New Mexico Statutes Annotated 1953 (revenue and taxation); Bureau of Revenue Rulings Number 69-110-2, 72-110-1, and 73-110-1. (JC)