Tobacco Tax

Property Tax

Real property usually means buildings and lands. Generally, when Indian lands are held in trust by the Federal Government, that property and the improvements on it are exempt from property taxes. When land is owned by an Indian or Indian tribe under a "fee" patent, the property is subject to property taxes.

The courts have found that the underlying legal issue for property taxation of Indian property is whether the land is "alienable." More specifically, whether the Indian owner is free to sell or transfer the property. If a tribe or tribal member owns real property in such a way that they are free to sell or transfer it, the property is subject to property taxes. If the federal government holds the property in trust or puts other restrictions on the Indian's ability to sell or transfer the property, it is exempt from property tax.

Certain properties that federally recognized tribes own in "fee" may also be exempt beginning with the 2004 assessment year. The 2004 legislature amended property tax statutes to exempt property owned in "fee" by these tribes if that property is used for essential government services. Essential government services means " services such as tribal administration, public facilities, fire, police, public health, education, sewer, water, environmental and land use, transportation, and utility services."

Personal property is defined as the moveable furnishings or equipment used in business. When personal property is owned by a tribe or tribal member and kept in "Indian Country," it is exempt. Indian Country includes trust lands allocated any where and all land within the boundaries of a reservation. The status of reservation land (fee or trust) does not usually affect the taxability of personal property, as long as that land is within Indian Country.

Personal property owned by a tribe or tribal member that is not kept in Indian Country may become subject to taxation. However, personal property owned by tribal Indians and used outside of Indian Country in the treaty fishery remains exempt. The amendments to property tax statutes approved by the 2004 legislature also provide exemption for personal property kept outside of Indian country when that property is used for essential government services.

The taxability of mobile homes in Indian Country depends on both the ownership and whether that mobile home becomes affixed to the land, losing its identity as a moveable piece of personal property. For instance, if a mobile home owned by a tribal member becomes affixed to land that is owned in fee (alienable), it becomes taxable just like the land. Also, personal property owned by an Indian that is not a member of the tribe on whose reservation the property is kept, would be subject to property tax.

If you have questions about specific property tax situations relating to Indian property, you may call the Property Tax Division at (360) 570-5870.

Real Estate Excise Tax

Timber Excise Tax

Generally, timber excise tax is due from a nonmember who harvests timber on fee land within Indian country.
 

Timber excise tax is not due if the timber being harvested is on trust land or is owned by the tribe and located in Indian country, regardless of the identity of the harvester.
 

For specific information on timber tax, you may contact the Department's Timber Tax Program at 1-800-548-8829.

Tax On Telephone Services

Also exempt are telephone services purchased by Indian businesses operated by Indians within the reservations in which they are an enrolled member.
 

An exemption statement may be submitted to the telephone service provider by an individual Indian, or, a consolidated tribal statement may be provided by the Indian tribes for enrolled tribal members entitled to the exemption. An exemption statement is required to be updated or renewed only upon a change of address or location of the Indian, and, in the case of a tribal exemption, need only reflect additions and/or deletions.