Are Sales of FET Taxable Articles Tax-exempt if Sold to an Indian Tribe?
By Rose-Michele Nardi Weiner Brodsky Sidman & Kider PC Question: A purchaser would like to buy some trucks from us that are taxable under Internal Revenue Code (IRC) Section 4051. He says he is buying the trucks on behalf of an Indian tribe and that the sale should be tax-free. Is this correct? Answer: Sales of otherwise taxable trucks may be made tax-free to certain Indian tribes, so long as certain requirements are met. The short answer is that a sale to an Indian tribe (or subdivision thereof) may be made on a tax-free basis if: (1) the purchasing Indian tribe qualifies as an Indian tribal government, (2) the sale relates to an essential governmental function and (3) the requirements under IRC Section 4221(a)(4) and Treasury Regulations Section 48.4221-5 are satisfied. See IRC Section 7871(a)(2) and (b). An Indian tribal government is treated as a state for purposes of certain excise taxes. Tax under “Chapter 31 (relating to tax on special fuels)” is one of the types of excise taxes
