A seller is required to maintain appropriate records on the tax-exempt status of applicable business transactions. The seller must obtain a completed Tax Exemption for Sales to Tribes from the buyer.
Generally, in this state the sale to persons other than tribal members is subject to the retail sales tax regardless of where delivery or rendition of services takes place. A seller is required to collect and remit to the state the retail sales tax upon each taxable sale made by them to nonmembers in Indian country.
A tribe and the Department may enter into an agreement covering the collection of state tax by tribal members or the tribe.
Records of tax-exempt status must be maintained for five years.
In order to substantiate the tax-exempt status of a retail sale to a person who is a tribal member, unless the purchaser is personally known to the seller as a member, the seller must require presentation of a tribal membership card or other suitable identification of the purchaser as an enrollee of the Indian tribe. Examples of other acceptable identification are:
- Letter from tribal official
- List of tribal member from a tribal official; and
- Treaty fishery identification card.
Example: A refuse collection company must verify the tax-exempt status of its customers. The refuse collection company can:
- get a list from the tribe of all tribal members living in Indian country, or
- get a copy of the individual's tribal membership card.
A tribe and the Department may enter into an agreement covering identification of enrolled members, in which case the terms of the agreement govern.