Federal law provides that the sales of tangible goods, including motor vehicles, to tribes and enrolled tribal members are exempt from retail sales tax if the goods are delivered to or the sale is made in the tribe or enrolled tribal member’s Indian country.
Starting June 9, 2016, a new Washington law states there are updated requirements to document:
The sale of a motor vehicle was to a tribe or an enrolled tribal member and The motor vehicle was delivered to or the sale was made in the buyer’s Indian country.
How to document a tax exempt sale to a tribe or enrolled tribal member?
The buyer is a tribe or an enrolled tribal member
A buyer must present to the seller, and the seller must keep a copy of, one of the following documents to substantiate that a sale was made to a tribe or an enrolled tribal member:
- the buyer’s tribal membership or citizenship card;
- the buyer’s certificate of tribal enrollment; or
- a letter signed by a tribal official confirming the buyer’s tribal membership status or that the buyer is a tribe
- If a buyer does not provide one of the above documents, the seller must collect retail sales tax on the sale.
Delivery to or sale made in the buyer’s Indian country
An exempt motor vehicle sale to a tribe or an enrolled tribal member must also meet one of the following:
The motor vehicle is delivered in the buyer’s Indian country
To establish delivery in the buyer’s Indian country, the seller must:
- Deliver the motor vehicle to the buyer’s Indian country and
- Complete a declaration, attesting to the location of delivery and enrollment status of the buyer. Both the buyer and seller must sign the declaration. The Department of Revenue created the Declaration for a Dealer Selling a Motor Vehicle to Tribes for buyers and sellers to use.
- The seller must keep the declaration in their records.
No additional proof is required to document delivery.
No other Department of Revenue form or certificate may be used to document delivery.
Note: If a declaration is not completed and signed by both the buyer and the seller, the seller will be unable to meet the delivery requirement and retail sales tax is due on the sale, unless the sale is made in the buyer’s Indian country as discussed below.
The sale of the motor vehicle is made in the buyer’s Indian country
If the sale is made in the buyer’s Indian country, a declaration does not need to be completed by the buyer and the seller. The buyer must still present one of the three documents above and the seller must examine and keep a copy of the document presented.
For motor vehicle sales, the most common example of when a sale is made in the buyer’s Indian country happens when the seller’s business (such as an auto dealership) is located in the buyer’s Indian country and the sale is completed at the seller’s location.
Who qualifies as "Native American?"
For purposes of the exemption, a Native American is defined as a person duly registered on the tribal rolls of the tribe occupying a Native American reservation and a person duly registered on the tribal rolls of the reservation upon and within whose reservation such transaction or activity takes place.
A partnership consisting of Native American partners is considered "Native American".
A partnership consisting of Native American and non-Native American partners is considered non-Native American.
A corporation owned by Native Americans and consisting of Native American officers or directors is considered "Native American".
A marital community consisting of a Native American and non-Native American member is considered "Native American" if all other qualifications are met.
Private Party Sales
Tribal members/citizens must use the form Private Party Selling a Motor Vehicle to Tribes (pdf) when purchasing a vehicle from a private party. For more information, see our webpage on Information for tribal member/citizens.
Business and occupation tax
Generally, the B&O tax applies to sales to Native Americans who take delivery in Washington. However, the B&O tax does not apply when the seller delivers the property to the buyer in Indian country and:
- The property is located in Indian country at the time of sale
- The seller has a place of business in Indian country that is used to receive the order or distribute the property, or
- The sale of the property is solicited by the seller while the seller is in Indian country.
For a purchase of a vehicle, the buyer must complete the Department of Licensing form Affidavit for Vehicle/Vessel Excise Tax Exemption for Enrolled Tribal Member Living on Reservation each year the vehicle is licensed.
Recognized Native American tribes in Washington
- Chehalis Confederated Tribes
- Colville Confederated Tribes
- Cowlitz Tribe
- Hoh Tribe
- Jamestown S' Klallam Tribe
- Kalispel Tribe
- Lower Elwha Klallam Tribe
- Lummi Nation Tribe
- Makah Tribe
- Muckleshoot Tribe
- Nisqually Tribe
- Nooksack Tribe
- Port Gamble S' Klallam Tribe
- Puyallup Tribe
- Quileute Tribe
- Quinault Nation
- Samish Nation
- Sauk-Suaittle Tribe
- Shoalwater Bay Tribe
- Skokomish Tribe
- Snoqualmie Tribe
- Spokane Tribe
- Squaxin Island Tribe
- Stillaguamish Tribe
- Suquamish Tribe
- Swinomish Tribe
- Tulalip Tribes
- Upper Skagit Tribe
- Yakama Nation
Washington Administrative Code (WAC) 458-20-192
The Handbook on Federal Indian Law (1982)
Makah Indian Tribe vs. Clallam County. 73 Wn. 2d 677, 440 p. 2d 442 (1968)
Wofford vs. Department of Revenue, 28 Wn. App. 68 (1980)