Does the tribe itself pay federal or state income taxes?
The tribal government, like the state of Colorado, pays no state or federal income tax. Certain tribal investments may be taxed, however, depending on what they are and how they are set up. Does the tribe or its members pay city or county sales tax? The tribe is considered a governmental entity, so it is exempt from paying sales taxes on purchases. Tribal members do pay sales taxes just as nontribal shoppers do, but they can qualify for exceptions on items purchased within the boundaries of the reservation or on goods ordered from home and delivered to them on the reservation. Can the tribe collect taxes? Yes, but for the most part it doesn’t. The tribe has the power to levy taxes, but the only significant tax it collects is a severance tax on oil and gas companies that extract minerals from the ground. The tribe does not collect income tax because it does not need the money. There are few retail businesses on the reservation to provide sales-tax revenue.
