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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
I
305.0000 Indians
Annotation 305.0028.200
305.0028.200 Off-Reservation Sales to Indians. Sales and Use Tax Regulation 1616 requires that possession and title (ownership) to tangible personal property must pass to the Indian purchaser on a reservation in order for the sale to be exempt from tax. In general, ownership of the property transfers upon delivery if delivery is made by facilities of the retailer, and ownership transfers upon shipment if delivery is made by mail or carrier. If the contract authorizes or requires the retailer to send the property to the purchaser, but does not require the retailer to deliver it at destination, the retailer completes its performance with reference to the physical delivery of the property at the time and place of shipment. If the contract expressly requires delivery at destination, the retailer completes its performance with reference to the physical delivery of the property on tender to the purchaser at the destination. When delivery of the property is by facilities of the retailer, title passes when the property is delivered to the purchaser at the destination unless there is an explicit written agreement executed prior to the delivery that title is to pass at another time.
When delivery to an Indian purchaser is by contract carrier or common carrier, the following conditions must be met in order for title and possession to pass to the Indian purchaser on the reservation: (1) the contract of sale (or an equivalent document) must expressly contain an F.O.B. reservation clause or equivalent provision; (2) title cannot have been passed to the purchaser prior to delivery on the reservation; and (3) the goods must in fact be delivered to the Indian purchaser on the reservation as specified in the contract of sale. If all of these conditions are met, then the sale is exempt from sales tax. 2/6/06. (2007–1).