The Supreme Court decided against the men, stating that a law of Congress can supersede the provisions of a treaty.

[1] Boudinot and Watie, with the help of attorneys A. Pike, R. W. Johnson, and B.F. Butler,[2] argued that they were exempt from paying the tax on the tobacco.

On the other hand, Amos Akerman, U.S. Attorney General, and Benjamin Bristow, Solicitor General, on behalf of the United States, argued that, the 107th section of the Internal Revenue Act of July 20, 1868, states that, "The internal revenue laws imposing taxes on distilled spirits, fermented liquors, tobacco, snuff, and cigars, shall be construed to extend to such articles produced anywhere within the exterior boundaries of the United States, whether the same shall be within a collection district or not," In other words, under the Internal Revenue Act of 1868, the United States had the authority to tax anyone within its boundaries as well as within its exterior boundaries.

Swayne indicated the legal direction he was heading by noting at the outset of the opinion that the case involved, “first the question of the intention of Congress, and second, assuming the intention to exist, the question of its power, to tax certain tobacco in the Territory of the Cherokee nation in the face of a prior treaty between that nation and the United States that such tobacco should be exempt from taxation.”[2] His decision yielded one of the most problematic and ambiguous doctrines in Indian law- whether tribes, as preexisting entities, may be included or excluded under the scope of general laws enacted by Congress.

The Cherokee Tobacco case, however, created a new interpretation- that general congressional acts do apply to tribes unless Congress explicitly excludes them.