Purchasers and Native Americans

Purchases by Native Americans

This section provides information for Native American purchasers regarding the proper application of use tax on purchases of tangible personal property (items) and the type of documentation the purchaser must retain to support an exemption from use tax.

Reporting and Paying Use Tax

Native American purchasers may owe use tax when the transaction is exempt from sales tax.

Use tax is due when Native American purchasers who reside on a reservation take ownership of the property delivered on a reservation and use the property off the reservation more than half of the time during the first 12 months after the sale.

For example: A Native American purchaser who resides on a reservation operates an event business and negotiates the purchase of a sound system for $3,500 from a dealer in Los Angeles. The dealer, using their own truck, delivers the system on the reservation and ownership transfers to the purchaser upon delivery. The sale is exempt from sales tax. The purchaser will use the sound system at concerts and events all over California. The purchaser owes use tax based on the system's purchase price ($3,500) if the purchase is used or stored outside the reservation for more than half of the time during the first 12 months after the purchase.

Paying Use Tax

If you owe use tax, you can pay it by using our online services system. Businesses that hold seller's permits should pay any use tax they owe when filing their sales and use tax return. Other businesses that are required to collect use tax from customers and pay it to us must obtain a California Certificate of Registration – Use Tax.


Mobilehomes are structures designed to be transportable in one or more sections and are equipped to contain one or two dwelling units. They are designed for use with or without foundation systems.

A mobilehome is often referred to as a manufactured home. Revenue and Taxation Code uses the term mobilehome for such homes, and for consistency, this tax guide does also. “Manufactured home” is a relatively new term and meets the definition of a mobilehome.

Recreational vehicles, commercial coaches, and factory-built houses are not considered mobilehomes.

A sale of a mobilehome to a Native American purchaser who resides on a reservation and takes ownership and delivery on the reservation will not be exempt from tax if the mobilehome is used outside the reservation more than half of the time during the first 12 months after the sale.

In this case, the Native American purchaser who resides on a reservation owes use tax and is responsible for paying it using one of these methods:

  • Report a One-Time Use Tax – Go to our website, select the Login button. From there, select the File a Return under and thenselect the One-Time Use tax and/or Lumber Return
  • Report use tax on a sales and use tax return if the purchaser has a California seller's permit

For more information on mobilehomes and factory-built housing, please see publication 47, Mobilehomes and Factory-Built Housing, and publication 9, Construction and Building Contractors.


Sales or use tax generally does not apply to leases of tangible personal property to a Native American lessee for any period when the leased property is located and used on a reservation.

In the absence of evidence to the contrary, it is assumed the property used by the Native American lessee is on a reservation if the lessor delivers the property to the Native American lessee on the reservation. However, tax applies to leased vehicles registered with the Department of Motor Vehicles to the extent that the vehicles are used outside the reservation.

Vehicle or Vessel Purchases

The sale of a vehicle or vessel by an “off-reservation” retailer is generally not subject to tax when the vehicle or vessel is purchased by a Native American who resides on a reservation, and delivery is made to the purchaser on a reservation and the ownership transfers on the reservation to the Native American. This exemption also applies to purchases by Native American organizations and Native American couples.

Use tax does not apply if a vehicle or vessel is used on a reservation more than half of the time during the first 12 months after the purchase. A vehicle or vessel is used off a reservation when it is used or stored off the reservation. Use tax, if due, is payable by the Native American purchaser directly to us.

How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)

To file a request for a use tax clearance, please submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to us. If you are registering more than one vehicle or vessel, you can attach a list to the form. Please include copies of the following documentation:

  • A copy of the certificate of title or current registration if title is not available;
  • Purchase invoice, showing the date you took title of the vehicle or vessel and showing the date and place the vehicle or vessel was delivered to you; and
  • Documentation showing you are a Native American residing on a reservation. This may include any one of the following:
    • Either a proof-of-residency letter from your tribal council, or
    • Your tribal identification card, or
    • A letter from the U.S. Department of the Interior to show the purchaser is a Native American.

For more information, please see publication 146, Sales to Native Americans and Sales in Indian Country, and our Tax Guide for Purchasers of Vehicles, Vessels, & Aircrafts.

Documenting Exempt Transactions

This segment provides information regarding the correct type of documentation to support claimed exempted sales. This documentation should be provided by the purchaser to the seller and maintained in the seller's records as proof of the exempt sale.

Transfer of Title (Ownership) on the Reservation

How tax applies to a particular sale or purchase depends on whether ownership of the item being sold or purchased transfers to the Native American purchaser on a reservation.

Sale by retailer located on a reservation

Ownership of an item being sold transfers on a reservation when an “on-reservation” retailer negotiates the sale on the reservation and delivers the property to a Native American or Native American's agent on the reservation.

Sale by retailer not located on reservation

“Off-reservation” retailers may sell to Native American purchasers who request delivery on a reservation.

For a sale to qualify as a transfer of ownership on a reservation, the contract of sale or other sales agreement cannot transfer ownership of the property to the purchaser before the property is delivered on the reservation and the purchaser or purchaser's agent cannot take possession of the property before delivery on the reservation.

In addition, the retailer generally must deliver the property:

  1. Using their own vehicle, or
  2. By mail, common carrier (for example, UPS, FedEx), or contract carrier (for example, a shipping, trucking, or transport company), when both of the following conditions are met:
    • The contract of sale or sales invoice includes a statement specifically requiring delivery on a reservation (for example, Freight on Board [F.O.B.] name of Native American reservation) and provides that ownership passes upon delivery on a reservation, and
    • The goods are in fact delivered on a reservation.

When delivery does not take place as described here, ownership of the property being sold or purchased generally transfers to the purchaser outside a reservation because the retailer's obligations with respect to physical delivery are usually completed outside the reservation.

Claimed Exempt Sales to Native Americans Require Documentation

If you are a Native American purchaser residing on a reservation, you need to provide documentation to the retailer that you qualify for the sale or use tax exemption. Generally, you need to provide the retailer with a signed exemption certificate stating that you reside on a reservation. Other than providing an exemption certificate, you may provide the retailer with documentation showing you are a Native American, such as a tribal ID card, a letter from your tribal council, or a letter from the U.S. Department of the Interior, and documentation that you reside on a reservation.

If you are a Native American organization, you must also provide documents showing that you qualify for the exemption, such as:

  • Partnership agreements, showing all partners are Native Americans, if the organization is a partnership.
  • Documents showing that the organization is a federally recognized Native American tribe or tribal organization.
  • Articles of incorporations showing that the organization is under tribal authority and wholly owned by Native Americans.
  • An exemption certificate containing certain required elements.

Exemption Certificates

For more information on exemption certificates, please see Regulation 1667, Exemption Certificates.