This section provides definitions of specific terms used throughout the publication. It also explains essential conditions for tax-exempt sales to Indians and requirements for documenting those sales. Be sure to read it before proceeding to the following sections.
Terms used throughout the publication
Please review these terms carefully. How tax applies to different sales can depend on whether a person, organization, or location fits the specific definitions below.
Indian For California sales and use tax purposes, an “Indian” is a person who is both of the following:
An individual of American Indian descent; and
Eligible to receive services as an Indian from the United States Department of the Interior.
A married couple or a registered domestic partnership should be treated as an Indian couple for exemption pur- poses when it consists of two Indians or of an Indian and a non-Indian that have entered into officially recognized family relationships under California law or tribal law. This generally includes a married couple or a domestic part- nership entered into under the Domestic Partner Rights and Responsibilities Act of 2003. Tribes have the authority to establish their own laws and regulations regarding such unions. Tribal laws include not only written laws, but may also include tribal customs and practices. However, such customs and practices must be that of the tribe, not of an individual tribal member. Therefore, if either California law or tribal law recognizes the family relationship, and at least one member of the couple is an Indian, the couple qualifies as an Indian couple.
“Indian organization” includes Indian tribes and tribal organizations, including tribes that incorporate pursuant to section 17 of the Indian Reorganization Act of 1934 (25 U.S.C. § 477). Partnerships qualify as “Indian organizations” for California sales and use tax purposes only when all of the partners are Indians. Corporations and limited liabil- ity companies qualify as Indian organizations only if they are organized under tribal authority and wholly owned by Indians. If an organization does not meet these criteria, it does not qualify, even when owned or operated by Indians.
For California sales and use tax purposes, a sale to an Indian organization (or to an Indian couple as described above) is treated the same as a sale to an individual Indian. Please keep this in mind as you read this publication.
Throughout this document, the proper application of sales and/or use tax to transactions involving Indians is discussed. The discussion of transactions involving a sale of tangible personal property to an Indian uses the term “Indian Purchaser.” An “Indian Purchaser” means and includes an individual Indian, an Indian couple, or an Indian organization, as those terms are discussed above.
Sales and Use Tax Regulation 1616, subdivision (d)(2) defines “reservation” for purposes of the proper application of the Sales and Use Tax Law. Under the Sales and Use Tax Law “reservation” generally has the same meaning as “Indian country” as defined in title 18 of United States Code section 1151. This publication uses the term “Indian country” to refer to tribal areas that would be considered “reservations” under Regulation 1616. For example, Indian country includes any of the following:
SALES TO AMERICAN INDIANS AND SALES IN INDIAN COUNTRY