The typically anti-tribal California State Board of Equalization has taken a turn, for the better, by proposing to exempt from state sales and use tax does the "sales of tangible personal property to and purchases of tangible personal property" by California tribal governments that do not have reservation trust lands. The proposed amendments to Regulation 1616 provides:
(G)Property Used in Tribal Self-Governance. Sales and use tax does not apply to sales of tangible personal property to and purchases of tangible personal property by the tribal government of an Indian tribe that is officially recognized by either the United States or the State of California if:
1. The tribal government’s Indian tribe does not have a reservation or the principal place where the tribal government meets to conduct tribal business cannot be its Indian tribe’s reservation because the reservation does not have a building in which the tribal government can meet or the reservation lacks one or more essential utility services, such as water, electricity, gas, sewage, or telephone, or mail service from the United States Postal Service; 2. The property is purchased by the tribal government for use in tribal self-governance, including the governance of tribal members, the conduct of inter-governmental relationships, and the acquisition of trust land; and 3. The property is delivered to the tribal government and ownership of the property transfers to the tribal government at the principal place where the tribal government meets to conduct tribal business.
The purchase of tangible personal property is not exempt from use tax under this paragraph if the property is used for purposes other than tribal self-governance more than it is used for tribal self- governance within the first 12 months following delivery.
The California BOE's proposed rulemaking is a spectacular acknowledgment of tax-exempt tribal status vis-a-vis fee lands owned by tribal governments. As most recently seen in Madison County v. Oneida Indian Nation, for which SCOTUS accepted certiorari before mooting the case this past term, states and their little siblings in county government typically do everything in their power to extract tax monies from Indian-owned fee lands, even though, like all tribal lands, such lands are used to provide essential governmental services and programs to tribal citizens.
The BOE's original April 2011 proposal is here and a more recent proposal of July 2001 is here.
Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.
