Key Definitions and Native Americans

This section provides definitions of specific terms used throughout this guide to explain important conditions for tax-exempt sales to Native Americans and requirements for documenting those sales.

Native American

Native American in this guide is used interchangeably to mean “American Indian” and “Indian,” as these terms are used in state and federal law.

For California sales and use tax purposes, a “Native American” is a person who is both:

  • An individual of Native American descent; and
  • Eligible to receive services as a Native American from the United States Department of the Interior.

Native American Couple

Native American couple refers to a married couple or a registered domestic partnership and is treated as a Native American couple for exemption purposes when the couple consists of two Native Americans or of a Native American and a non-Native American who have entered a recognized family relationship under California law or tribal law.

This generally includes a married couple, or a domestic partnership entered 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 California law or tribal law recognizes the family relationship, and at least one member of the couple is a Native American, the couple qualifies as a Native American couple.

Native American Organization

Native American organization includes federally recognized Native American tribes and tribal organizations, including tribes that incorporate under section 17 of the Indian Reorganization Act of 1934 (25 U.S.C § 5124).

Partnerships qualify as Native American organizations for California sales and use tax purposes only when all the partners are Native Americans.

Corporations and limited liability companies qualify as Native American organizations only if they are organized under tribal authority and wholly owned by Native Americans.

If an organization does not meet these criteria, it does not qualify, even when owned or operated by Native Americans.

Native American Purchaser

The term Native American purchaser is used to discuss the proper application of sales and use tax to transactions involving Native Americans.

Native American purchaser means and includes an individual Native American, a Native American couple, or a Native American organization.

Reservation

Reservation means “Indian country” for purposes of the proper application of Sales and Use Tax Law.

These terms refer to tribal areas. For example, Indian country includes any of the following:

  • A reservation, including rights-of-way and easements running through a reservation,
  • A rancheria, and
  • Any land held by the United States in trust for any federally recognized Native American tribe or Native American individual (also known as “trust land”).

Not all portions of a facility housing a Native American gaming establishment are necessarily on a reservation.

For example, some portions of a facility containing a gaming establishment (for example, parking lot) may be located on land adjacent to a reservation. Transactions occurring on land adjacent to a reservation may not meet the exemption requirements.