[HISTORY: Adopted by the Tribal Council of the Nottawaseppi
Huron Band of the Potawatomi 4-26-2007 by Res. No. 04-26-07-01.[1] Amendments noted where applicable.]
GENERAL REFERENCES
Tax Compliance Act — See Ch. 10.2.
[1]
Editor's Note: The Tax Agreement between the state and the
Tribe was originally entered into 12-20-2002 (implemented 7-1-2007).
The original Tax Agreement, and all amendments, are available from
the Michigan Department of Treasury here: http://www.michigan.gov/taxes/0,4676,7-238-43513_43517-174104--,00.html.
A.
Purpose and intent of this agreement.
(1)
Purpose and intent of agreement. By entering into this agreement,
the state and the Tribe indicate their intention and willingness to
be bound by its terms so long as this agreement is in effect. While
this agreement is in effect between the Tribe and the state, it is
agreed that: (i) their respective rights will be determined by this
agreement with respect to the taxes that are the subject of this agreement;
(ii) neither party will seek additional entitlement or seek to deny
entitlement on any federal ground (including federal preemption),
whether statutorily provided for or otherwise, with respect to the
taxes that are the subject of this agreement; (iii) neither party
will contest the legality of the agreement or the legal authority
of any of its provisions; and (iv) both parties will defend this agreement
from attack by third parties.
(2)
Application of state law. References in this agreement to "state
law" or specific tax acts shall refer to state law or the act as presently
enacted and subsequently amended. Except as modified in this agreement,
the provisions of state law relating to the taxes that are the subject
of this agreement shall apply to the Tribe, tribal members and tribal
entities.
(3)
Scope. The subject matter of this agreement is limited exclusively
to the taxes that are the subject of this agreement. Nothing in this
agreement is intended to be used for any other purpose or bear in
any manner whatsoever on any other subject, including jurisdiction,
affecting the Tribe and the state.
B.
Taxes subject to this agreement. The taxes that are the subject of
this agreement are:
[Amended 1-19-2008 by Res. No. 01-19-08-04[1]]
(1)
Sales tax pursuant to the General Sales Tax Act, as amended, MCLA
§ 205.51 et seq.;
(2)
Use tax pursuant to the Use Tax Act, as amended, MCLA § 205.91
et seq.;
(3)
Motor fuel tax pursuant to the Motor Fuel Tax Act, as amended, MCLA
§ 207.1001 et seq., and the Motor Carrier Fuel Tax Act,
as amended, MCLA § 207.211 et seq.;
(4)
Income tax pursuant to the Income Tax Act of 1967, as amended, MCLA
§ 206.1 et seq.;
(5)
Tobacco products tax pursuant to the Tobacco Products Tax Act, as
amended, MCLA § 205.421 et seq.;
(6)
The single business tax pursuant to the Single Business Tax Act,
as amended, MCLA § 208.1 et seq.; and
(7)
The Michigan business tax pursuant to the Michigan Business Tax Act,
as enacted, MCLA § 208.1101 et seq.
[1]
Editor's Note: This is the Second Amendment to the Tax Agreement.
C.
State law amendments. The state shall give notice to the Tribe of
enrolled bills that amend the taxes that are the subject of this agreement
or the Revenue Act, MCLA § 205.1 et seq. Upon receipt of
the notice, the Tribe may request a meeting to discuss the bill and
its impact. Notice of any such meeting shall be provided to other
tribes which are signatories to an agreement with the state substantially
similar to this agreement, and their representatives shall be permitted
to attend.
D.
Effect of termination of agreement. Except as provided in Subsections E(3) and G(1) and §§ 10.1-13F, 10.1-15C and 10.1-16C, upon termination of this agreement, the Tribe and the state may assert any claim or defense for any period subsequent to the date of termination, and nothing in this agreement shall be construed as a concession, a statement of controlling law, or an admission, nor shall anything contained in this agreement be used affirmatively or as a bar or defense to any claim asserted by either party to this agreement for any such subsequent period.
E.
Confidentiality.
(1)
The terms and provisions of this agreement shall be a public document.
(2)
All information received by the state in the administration of a
tax under this agreement is subject to the confidentiality provisions
of MCLA § 205.28(1)(f) and may be disclosed only in the
manner and for the purposes specified in that provision; provided,
however, that despite the provisions of MCLA § 205.28(1)(f),
authorizing the Treasurer to disclose such information upon the written
request of or pursuant to a reciprocal agreement with the United States
Department of Treasury or any other state, the Treasurer agrees not
to make such disclosure with respect to tax information set forth
in a tax return or report received from the Tribe or as a result of
any investigation or audit of the Tribe pursuant to this agreement.
(3)
In the course of the administration and enforcement of the taxes
that are the subject of this agreement, the state may make certain
taxpayer information relating to tribal members or tribal entities
available to the Tribe. All such information shall be retained in
the strictest confidence and shall only be revealed to persons other
than the taxpayer as required for the proper administration and enforcement
of the terms of this agreement. The tribal obligation to keep information
received confidential shall be a continuing obligation and shall survive
the termination of this agreement.
(4)
The state and the Tribe will enter into a written protocol for the
exchange, retention and destruction of taxpayer information consistent
with the terms of this agreement.
F.
Ongoing relationship. The Tribe and the state recognize the need
to foster a continuing relationship and maintain communication on
issues as they arise.
(1)
Representatives of the Tribe and the state shall attend an annual
summit together with representatives of other tribes that are signatories
to an agreement with the state substantially similar to this agreement.
The purpose of this summit is to provide a forum to discuss matters
relating to this agreement. The first summit shall be called by the
state and held in Lansing before December 31, 2003. The state and
the tribes will endeavor to give notice of agenda items in advance
of the meeting. Prior to adjourning a summit, the tribes and the state
shall set the time and place for the next summit, which shall be approximately
one (1) year later.
(2)
Prior to the summit, the state may conduct a public session devoted
to a presentation by state representatives on changes in tax law that
have occurred over the last year and other matters deemed worthy of
presentation by the state.
G.
Sovereign immunity.
(1)
Tribe's waiver of immunity.
(b)
The Tribe waives its sovereign immunity and consents to suit by the state in Tribal Court with respect to compelling arbitration as provided in §§ 10.1-15 and 10.1-16C of this agreement and enforcement of any award(s) made by the arbitrators under those sections of this agreement. If the Tribal Court has not compelled arbitration or enforced the arbitration award(s), as the case may be, within fourteen (14) business days of initiation of the state's suit in Tribal Court, the Tribe agrees that the state may withdraw such suit from Tribal Court, and the Tribe hereby waives its sovereign immunity and consents to suit by the state in state court with respect to compelling such arbitration as provided in § 10.1-16C of this agreement or enforcement of any award(s) made by the arbitrators under those sections of this agreement. The waiver provided for in this subsection with respect to compelling arbitration as provided in §§ 10.1-15 and 10.1-16C and enforcement of any award(s) made by the arbitrator(s) under these sections shall survive the termination of this agreement.
(c)
If the Tribe elects to use tribal certificates of exemption under § 10.1-13 of this agreement, the Tribe waives its sovereign immunity and consents to suit by the state in state court with respect to the determination and collection of liability for sales tax and use tax and interest resulting from the use of tribal certificates of exemption, as provided at § 10.1-13F of this agreement. Prior to commencing suit against the Tribe in state court, the state shall provide no less than ten (10) business days' notice to the Tribe of its intention to bring suit. During said ten-business-day period, the state shall afford the Tribe an opportunity to meet with representatives of the state for the purpose of resolving the matter at a place designated in the notice, which notice shall offer the Tribe no less than two alternative meeting dates during such period. If, however, the state fails to afford the Tribe the opportunities to meet as described above, this consent shall be ineffective. The waiver provided for in this subsection with respect to determination and collection of liability for sales tax and use tax and interest resulting from the use of tribal certificates of exemption as provided in § 10.1-13F shall survive termination of this agreement.
(2)
State's waiver of immunity. The state hereby acknowledges that:
(i) pursuant to 2002 PA 616,[2] the state is authorized to contractually bind itself to the dispute resolution provisions contained in this agreement and agrees to submit to arbitration as provided in §§ 10.1-15 and 10.1-16C for the purposes of the administration, enforcement and resolution of disputes arising under this agreement, and (ii) pursuant to the legislative waiver of immunity contained in the Court of Claims Act, MCLA § 600.6401 et seq., and Section 22 of the Revenue Act, MCLA § 205.22, the state has consented to suit in State Court sufficient for the purposes of the administration and enforcement of the terms of this agreement, including compelling such arbitration as provided in §§ 10.1-15 and 10.1-16C of this agreement or enforcement of any award(s) made by the arbitrators under those sections of this agreement. In the absence of legislative modification, this waiver shall survive the termination of this agreement.
[2]
Editor's Note: See MCLA § 205.30c.
For purposes of this agreement, the following definitions pertain:
A.
AGREEMENT
AREA — The area designated as such in Appendix A.[1] The Agreement Area is negotiated exclusively for purposes
of this agreement. Neither party makes any admissions, representations
or concessions whatsoever regarding the extent of "Indian country"
and either the Tribe's or state's jurisdiction, and this
negotiated Agreement Area can serve absolutely no precedential purpose
in any administrative or judicial proceeding not directly related
to the administration or enforcement of this agreement.
[1]
Editor's Note: Appendix A is attached to this chapter.
B.
DEPARTMENT — The
Michigan Department of Treasury.
C.
GOVERNMENTAL FUNCTION — Those activities or functions by the Tribe identified in § 10.1-3A(1)(b) of this agreement.
D.
INDIAN
COUNTRY — Those lands considered "Indian country"
under federal law.
E.
NONTRIBAL
MEMBER — An individual who is not an enrolled member
of the Tribe.
F.
RESIDENT
TRIBAL MEMBER — A tribal member whose principal place
of residence is located within the Agreement Area.
G.
STATE — The
State of Michigan.
H.
TAXABLE
SALE — A sale that is not exempt under state law as
modified by this agreement.
I.
TAX YEAR
or TAXABLE YEAR or TAX PERIOD — The calendar year,
or the fiscal year ending during such calendar year, upon the basis
of which a tax subject to this agreement is computed.
J.
TRIBE — Nottawaseppi
Huron Band of Potawatomi, a sovereign, federally recognized tribe
that is a signatory to this agreement. The term "Tribe" shall include
entities wholly owned by the Tribe.
K.
TRIBAL
AND TRUST LANDS —
[Amended 1-19-2008 by Res. No. 01-19-08-04[2]]
(1)
(K-1)
All lands held in trust by the federal government for the benefit
of the Tribe, which are listed on Appendix A[3] (K-1) and designated as tribal and trust lands at the
time this agreement is executed.
[3]
Editor's Note: Appendix A is attached to this chapter.
(2)
(K-2)
All fee lands owned by the Tribe which are listed on Appendix A and
designated as tribal and trust lands at the time this agreement is
executed.
(3)
(K-3)
All tribal lands acquired after execution of this agreement within
an area identified for automatic tribal and trust land status on Appendix
A, so long as they are used for a governmental function.
(4)
(K-4)
All tribal lands accepted into federal trust after execution of this
agreement which are located within the area identified in Appendix
A, regardless of the use of such tribal lands.
(5)
(K-5)
All other lands acquired after execution of this agreement by the
Tribe that are mutually agreed upon in writing by the parties to this
agreement and identified in Appendix A.
(6)
All
lands listed on Appendix A (K-2) that have been subsequently taken
into trust by the federal government for the benefit of the Tribe,
which do not meet the criteria of Appendix A (K-4).
[2]
Editor's Note: This is the Second Amendment to the Tax Agreement.
L.
TRIBAL
CHAIRPERSON — The duly elected President of the Executive
Council of the Tribe.
M.
TRIBAL
ENTITY — An entity, other than a single resident tribal
member or an entity wholly owned by the Tribe, that is wholly owned
by any combination of the Tribe and its resident tribal members or
is wholly owned by its resident tribal members.
N.
TRIBAL
MEMBER — An individual who is an enrolled member of
the Tribe.
A.
Exemptions.
(1)
Tribe.
(a)
Purchases by the Tribe or a tribal entity of tangible personal property for its use, including but not limited to governmental functions identified in Subsection A(1)(b) below, and commercial activities are exempt from both the sales tax and use tax if the transaction takes place and the property is used exclusively within the tribal and trust lands.
(b)
Purchases by the Tribe of tangible personal property that is
primarily used (95% or more) in performing one of the following tribal
governmental functions is exempt from both the sales tax and use tax
if the transaction takes place within the Agreement Area, regardless
of where the tangible personal property is used:
[1]
Public safety and conservation.
[2]
Environmental services.
[4]
Public welfare and other social services.
[5]
Education.
[6]
Health services.
[7]
Housing and housing services.
[8]
Casino gaming (limited to actual gaming activities).
[9]
Other similar functions customarily performed by state or local
units of government.
(c)
For the purpose of application of Subsection A(1)(b), the term "Tribe" means the Tribe acting alone or in combination with one or more other tribes that have entered into a tax agreement with the state that is substantially similar to this agreement.
(d)
Purchases of vans and buses by the Tribe for use in transporting
passengers to and from a tribal gaming facility shall be exempt from
both sales tax and use tax, if used exclusively within the Agreement
Area or within a twenty-five-mile radius of a tribal gaming facility,
provided that an occasional use (5% or less) for other governmental
functions shall not preclude entitlement to this exemption.
(2)
Resident tribal member.
(a)
Tangible personal property, other than motor vehicles, purchased
or acquired by a resident tribal member for his or her commercial
use is exempt from both sales tax and use tax if the transaction takes
place in the tribal and trust lands and the property is used exclusively
within the tribal and trust lands.
(b)
Purchases by a resident tribal member of tangible personal property
for personal use are exempt from both the sales tax and use tax if
the transaction takes place in the Agreement Area and the property
is used exclusively within the Agreement Area.
(c)
Exemptions on certain items.
[Amended 8-20-2015 by Res. No. 08-20-15-12[3]]
[1]
Resident tribal members are exempt from both the sales tax and
use tax on the following items, regardless of where purchased or used,
provided they are purchased for noncommercial use, used primarily
by the resident tribal member and principally garaged, berthed or
stored within the Agreement Area:
[2]
Where an item is purchased under this subsection and subsequently
transferred to a nonresident tribal member relative, and the transfer
would be exempt under MCLA § 205.93(3)(a) or 205.94bb, the
resident tribal member shall reimburse the state an amount equal to
the current sales or use tax rate times the retail dollar value of
the item at the time of the transfer. The reimbursement shall be paid
to the Department within thirty (30) days of the date of transfer.
Such reimbursement will not be required where the retail dollar value
at the time of transfer is below $2,000 for a passenger vehicle or
is below $1,000 for other enumerated items.
[3]
Editor's Note: This is the Fourth Amendment to the Tax Agreement.
(d)
Resident tribal members are exempt from both the sales tax and
use tax on modular homes and mobile homes used as their principal
residence. Where a mobile home purchased under this subsection is
subsequently transferred to a nonresident tribal member relative,
and the transfer would be exempt under MCLA § 205.93(3)(a),
the resident tribal member shall reimburse the state an amount equal
to the current sales or use tax rate times the retail dollar value
of the mobile home at the time of the transfer. The reimbursement
shall be paid to the Department within thirty (30) days of the date
of transfer. Such reimbursement shall not be required where the retail
dollar value of the mobile home at the time of transfer is below $2,000.
(e)
The exemptions in Subsection A(2)(c), (d) and (3)(b) shall apply in full to: 1) purchases made solely by a resident tribal member where the items are solely titled in the name of the resident tribal member; 2) purchases made jointly by a resident tribal member and his or her resident tribal member spouse where the item is titled exclusively in one or both names; or 3) purchases made exclusively by multiple resident tribal members where the item is titled exclusively in one or more of the resident tribal member purchasers' names. With regards to Subsection A(2)(b) (only for purchase and affixation of materials for construction, renovation or improvement of the resident tribal member's principal residence), Subsection A(2)(c), (d) and (3)(b), the resident tribal member shall qualify for a fifty-percent exemption on purchases that are made by the resident tribal member, or his or her nonresident tribal member spouse, and exclusively titled in both their names. With regards to Subsection A(2)(c) only, a resident tribal member minor, licensed to drive a motor vehicle in the State of Michigan, shall qualify for a fifty-percent exemption on purchases that are at least 50% made by the resident tribal member and exclusively titled in the resident tribal member's and the resident tribal member's nonresident tribal member parent's name. This subsection does not otherwise alter any of the other requirements identified in Subsection A(2)(b), (c), (d) and (3)(b).
(3)
Affixation to real estate.
[Amended 8-1-2007 by Res. No. 08-01-07-01[4]]
(a)
Materials that are purchased, used or acquired in the performance
of a contract entered into by a resident tribal member, Tribe or tribal
entity for construction, renovation or improvement of real property
owned by the Tribe or the federal government in trust for the Tribe
are exempt from both sales tax and use tax if the real property is
located within the tribal and trust lands and there is no contractual
entitlement for a nonresident tribal member or nontribal entity to
remove the improvement.
(b)
Materials that are purchased, used or acquired in the performance
of a contract for construction, renovation or improvement to the principal
residence of a resident tribal member are exempt from both the sales
tax and use tax.
(c)
Where a resident tribal member seeks exemption claimed under either Subsection A(2)(b), (d) or (3)(b) for the purchase, construction, renovation or improvement of a new principal residence, the resident tribal member shall repay to the Department any previously received exemption claimed under Subsection A(2)(b), (d) or (3)(b) for the purchase, construction, renovation or improvement of his or her previous principal residence(s) for a period of two (2) years immediately preceding the purchase of the item(s) on which the exemption is to be claimed. Repayment will not be required where the cumulative cost of the previously purchased items for which exemption was received does not exceed $2,000 for the two-year period.
(d)
A resident tribal member cannot have more than one principal residence at a time. For purposes of Subsection A(3)(b), where the resident tribal member has not yet relocated into the new residence, a resident tribal member's principal residence changes from the old residence to the new residence as of the date of the purchase for which exemption is sought regarding the new residence.
[4]
Editor's Note: This is the First Amendment to the Tax Agreement.
(4)
Treaty fishing.
(a)
Tangible personal property purchased or acquired by a resident
tribal member within the Agreement Area for use in exercising a treaty
fishing right is exempt from both the sales tax and use tax, regardless
of where the property is used.
(b)
Tangible personal property purchased or acquired by the Tribe,
a tribal entity or any tribal member for use in exercising a commercial
treaty fishing right is exempt from both the sales tax and use tax,
regardless of where the property is purchased or acquired.
(5)
Rental rooms. Rental rooms owned by the Tribe that are within tribal and trust lands and within a one-quarter-mile radius of a tribal gaming facility also located within the tribal and trust lands are exempt from the lodging use tax and are not subject to tax sharing, as provided in Subsection B below.
(6)
Restaurant food and beverage sales. Restaurant food and beverage sales at casino operations located within the tribal and trust lands are exempt from both the sales tax and use tax and are not subject to tax sharing as provided in Subsection B below.
(7)
Sale of electricity, natural or artificial gas, home heating fuels,
and telecommunications and Internet services.
(a)
Sales of electricity, natural gas or artificial gas, home heating
fuels and all transmission and distribution charges are exempt from
both the sales tax and use tax if the product is delivered to:
[1]
Land owned by the Tribe or held in trust by the federal government
for the benefit of the Tribe, to the extent that the land is occupied
by the Tribe, a tribal entity or a tribal member and is within tribal
and trust lands;
[2]
Land occupied by the Tribe within the Agreement Area that is
primarily used (95% or more) in performing a governmental function;
or
[3]
A resident tribal member's principal residence located
within the Agreement Area.
(b)
In addition, telephone (intrastate and interstate), telegraph
leased wire, Internet, cable and other similar communications rendered
to and paid for by the Tribe, a tribal entity or resident tribal member
are exempt from both the sales tax and use tax if the service is rendered
to:
[1]
Land owned by the Tribe or held in trust by the federal government
for the benefit of the Tribe, to the extent that the land is occupied
by the Tribe, a tribal entity or a tribal member and is within the
tribal and trust lands;
[2]
Land occupied by the Tribe within the Agreement Area that is
primarily used (95% or more) in performing a governmental function;
or
[3]
A resident tribal member's principal residence located
within the Agreement Area.
(8)
Sourcing of transactions. The determination of where a transaction
occurs will be made in accordance with the Streamline Sales Tax Project
Sourcing Rules, as follows:
(a)
When the product is received by the purchaser at a business
location of the seller, the sale is sourced to that business location.
(b)
When the product is not received by the purchaser at a business
location of the seller, the sale is sourced to the location where
receipt by the purchaser (or the purchaser's donee, designated
as such by the purchaser) occurs, including the location indicated
by instructions for delivery to the purchaser (or donee), known to
the seller.
(c)
When Subsection A(8)(a) and (b) do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business, when use of this address does not constitute bad faith.
(d)
When Subsection A(8)(a), (b) and (c) do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, when use of this address does not constitute bad faith.
(e)
When none of the previous rules of Subsection A(8)(a), (b), (c) or (d) apply, including the circumstance where the seller is without sufficient information to apply the previous rules, then the location will be determined by the address from which tangible personal property was shipped, from which the digital good was first available for transmission by the seller or from which the service was provided (disregarding for these purposes any location that merely provided the digital transfer of the product sold).
(f)
The terms "receive" and "receipt" mean: taking possession of
tangible personal property; making first use of services; or taking
possession or making first use of digital goods, whichever comes first.
The terms "receive" and "receipt" do not include possession by a shipping
company on behalf of the purchaser.
(g)
It is understood that if the rules adopted are different than
those set forth above, there will be further discussion on the sourcing
issue by the Tribe and the state, and those further discussions may
result in changes to this section, if mutually agreed upon in writing
by the parties.
B.
Tax sharing. Sales tax and use tax will be collected, remitted and
shared between the state and the Tribe as provided in this section.
(1)
Outside of the tribal and trust lands. Tribal, tribal member and tribal entity retailers shall collect the state sales tax or use tax as applicable on all sales to nontribal members, nonresident tribal members and on all other taxable sales that occur within the state and outside of the tribal and trust lands. All tax collected shall be remitted to the state and shall not be subject to tax sharing as provided in this Subsection B.
(2)
Inside the tribal and trust lands. Tribal, tribal member and tribal
entity retailers shall collect and remit to the state the state sales
tax or use tax, as applicable, on all sales to nontribal members and
nonresident tribal members and on all other taxable sales that occur
within the tribal and trust lands. The state shall share the tax collected
and remitted as follows:
(a)
On the first $5,000,000 of annual gross receipts from nontribal
members, nonresident tribal members and all other taxable sales, 2/3
of the tax collected shall be paid to the Tribe and 1/3 to the state.
(b)
On annual gross receipts from nontribal members, nonresident
tribal members and all other taxable sales in excess of $5,000,000,
1/2 of the tax collected shall be paid to the Tribe and 1/2 to the
state.
(3)
If the Tribe enacts a sales tax on transactions occurring within its tribal and trust lands on sales made by the Tribe, tribal members or tribal entities, which: (i) utilizes a base at least as inclusive as that provided under state law; and (ii) applies a rate at least as high as that imposed by state law, Subsection B(2) above shall not apply. Rather, the state agrees to exempt those transactions from the state use tax, and the Tribe agrees to collect its sales tax from all tribal, tribal member and tribal entity retailers engaging in taxable sales within the tribal and trust lands. The Tribe shall share the tax collected as follows:
(a)
On the first $5,000,000 of annual gross receipts from taxable
sales, 2/3 of the tax collected shall be retained by the Tribe and
1/3 paid to the state (but not to exceed the amount payable to the
state if the state tax rate were applied).
(b)
On annual gross receipts from taxable sales in excess of $5,000,000,
1/2 of the tax collected shall be retained by the Tribe and 1/2 paid
to the state (but not to exceed the amount payable to the state if
the state tax rate were applied).
C.
General.
(1)
The state will impose a sales tax on all nontribal retailers, nontribal member retailers and nontribal entity retailers within the Agreement Area including tribal and trust lands on all sales including those to the Tribe, tribal members or tribal entities, unless a valid exemption certificate is presented at time of sale. Imposition of the tax at the retail level shall not preclude the Tribe, a resident tribal member, or a tribal entity from obtaining the benefit of an exemption provided in this agreement by use of the tax table or other refund mechanism provided in § 10.1-13 of this agreement.
(2)
Tribal, tribal member and tribal entity retailers will not be eligible
for the vendor's prepayment discount at MCLA §§ 205.54
and 205.94f on sales that occur within the tribal and trust lands.
[Amended 12-15-2012 by Res. No. 12-15-12-11[1]]
A.
Part 1 [person, other than a corporation as defined under Part 1
Section 51(8)(A) of Act No. 38 of the Public Acts of 2011[2]].
(1)
Nonbusiness income. Resident tribal members are exempt from state
income tax on all nonbusiness income, including but not limited to:
(a)
All income derived from wages are exempt whether the wages are
earned within the Agreement Area or outside of the Agreement Area;
(b)
All interest and passive dividends are exempt;
(c)
All rents and royalties derived from real property located within
the Agreement Area are exempt;
(d)
All rents and royalties derived from tangible personal property,
to the extent the personal property is utilized within the Agreement
Area, are exempt;
(e)
Capital gains from the sale or exchange of real property located
within the Agreement Area are exempt;
(f)
Capital gains from the sale or exchange of tangible personal
property which is located within the Agreement Area at the time of
sale are exempt;
(g)
Capital gains from the sale or exchange of intangible personal
property are exempt;
(h)
All pension income and benefits, including, but not limited
to, 401(k) IRA, defined contribution plan, and defined benefit plan
payments are exempt;
(i)
All per capita payments by the Tribe to resident tribal members
are exempt without regard to the source of payment; and
(j)
All gaming winnings are exempt.
(2)
Business income. Resident tribal members are exempt from the state
income tax on business income as follows:
(a)
Business income shall be apportioned in the manner provided
in the State Income Tax Act[3] and, with the exception of transportation services, shall
be by application of the sales factors. In arriving at the portion
to be taxed, the numerators provided in that section shall include
sales in the state and shall exclude sales which are outside of the
state or within the tribal and trust lands. The denominator shall
consist of all sales everywhere. Business income includes income derived
from a flow-through entity. Transportation services shall be based
on revenue miles as described under Section 132 of Act No. 38 of the
public acts of 2011,[4] except that revenue miles in Michigan shall exclude those
within tribal and trust lands.
(3)
Treaty fishing. All income derived from treaty fishing is exempt
from the state income tax to the extent excluded from federal income.
(4)
Spouses. Spouses who are not resident tribal members are subject
to the state income tax.
[2]
Editor's Note: See MCLA § 206.51(8).
B.
Part 2 (corporations)
(1)
EXPANDED TRIBAL AGREEMENT AREA
RESIDENT TRIBAL MEMBER (CIT)
TRIBAL ENTITY (CIT)
TRIBAL MEMBER (CIT)
TRIBE (CIT)
For purposes of application of the tax enacted under Part 2 of Act
No. 38 of the Public Acts of 2011 (Corporate Income Tax or CIT) only,
the following definitions shall apply:
The lands within the combined agreement areas of each tribe
(CIT).
A tribal member (CIT) whose principal place of residence
is located within his or her Tribe's agreement area.
An entity other than a single tribe (CIT) acting alone or
single resident tribal member (CIT) acting alone, that is wholly comprised
of any combination of the Tribe (CIT) and resident tribal members
(CIT) or is wholly owned by resident tribal members (CIT).
An individual who is an enrolled member of a tribe (CIT).
Any tribe that has entered into a tax agreement with the
state that is substantially similar to this agreement.
(2)
The corporate income tax (CIT) exemptions provided by this agreement
will be applied without regard to the law under which an entity is
organized. Publicly traded entities shall be subject to the CIT without
regard to Tribe (CIT) or tribal member (CIT) ownership and without
regard to the expanded tribal agreement area.
(3)
Entities taxable under the CIT in which the ownership interests are
entirely comprised of one or more tribes (CIT), tribal members (CIT)
or tribal entities (CIT) that engage in business activity within the
state will apportion their tax base by application of the statutory
sales factor to determine the portion of the tax base attributable,
if any, to the state but outside the expanded tribal agreement area.
The portion of the tax base attributable to the expanded tribal agreement
area will be exempt from the CIT.
(4)
Entities taxable under the CIT which are not wholly owned by any
combination of tribes (CIT), tribal members (CIT) or tribal entities
(CIT) will apportion their tax base by application of the statutory
sales factor to determine the portion of the tax base attributable
to the state and to the expanded tribal agreement area. The portion
of the tax base attributable to the expanded tribal agreement area
which is equal to the percentage of ownership interests held in combination
of tribes (CIT), tribal members (CIT) or tribal entities (CIT) will
be exempt. The portion of the tax base attributable to nontribes (CIT),
nontribal members (CIT) or nontribal entities (CIT) is subject to
the CIT for activity within the state both within and outside of the
expanded tribal agreement area. In calculating the state sales factor
of the apportionment formula, the numerator shall only exclude sales
that are destined to:
C.
Withholding and reporting.
(1)
Tribal, tribal member and tribal entity employers located within the Agreement Area will withhold and remit to the state income tax described under Subsection A of this section from all employees who are not resident tribal members.
(2)
Where the Tribe, tribal members and tribal entities disburse pension
or annuity payments for those who are not resident tribal members,
they will withhold on the taxable part of the payments as described
under Section 703(1) of Act No. 38 of the public acts of 2011.[5]
[5]
Editor's Note: See MCLA § 206.703(1).
(3)
Flow-through entities, wholly or partially owned by the Tribe, tribal
members or tribal entities, will withhold a tax on the distributive
share of taxable income of each nonresident member of the flow-through
entity who is an individual as described under Section 703(3) of Act
No. 38 of the Public Acts of 2011.[6]
[6]
Editor's Note: See MCLA § 206.703(3).
(4)
Flow-through entities, wholly or partially owned by the Tribe, tribal
members, or tribal entities, with more than $200,000 of allocated
or apportioned business income will withhold on the distributive share
of the business income of each member as described under Section 703(4)
and (5) of Act No. 38 of the Public Acts of 2011.[7]
[7]
Editor's Note: See MCLA § 206.703(4) and (5).
(6)
The Tribe will report to the state gaming winnings in the same manner
as reported to the federal government.
(7)
The Tribe's casino operators and/or entertainment facility operators
will report gross receipts and contact information regarding each
professional performer in a manner consistent with reporting practices
required by the state for nontribal casino operators and/or entertainment
facilities.
[1]
Editor's Note: This is the Third Amendment to the Tax Agreement.
A.
The Tribe may purchase a quantity of tax-exempt motor fuel. The exempt
motor fuel will be administered by either the quota method or the
refund method. The Tribe shall select which method it will use to
acquire tax-exempt motor fuel, consistent with the provisions of this
agreement.
B.
Implementation; refund method.
(1)
The Tribe will prepay the state motor fuel and sales taxes on all
motor fuel purchases and seek a refund on exempt sales.
(2)
All motor fuel for resale shall be purchased in accordance with state
law from any state-licensed wholesaler and shall be tax prepaid. All
taxable sales of such motor fuel shall include the tax in the retail
price.
(3)
The Tribe shall determine which retailers within the Agreement Area
will be entitled to seek refunds on exempt sales.
(4)
The total amount of refunds obtainable by the Tribe or its designated
retailers shall be limited by a ceiling determined jointly by the
Tribe and the state in the same manner as a quota. The entitlement
shall be prospective and shall be reviewed periodically. There shall
be no retroactive reconciliation.
(5)
Tribes that engage in interstate transportation activities shall
be subject to the International Fuel Tax Agreement (IFTA). No refund
under this agreement shall be requested by the Tribe or its designated
retailers, and no tax-exempt fuel shall be used for interstate activities
subject to IFTA.
(6)
The Tribe shall not engage in commercial intrastate transportation activities, other than those associated with its casino gaming operations as provided at § 10.1-3A(1)(d), with fuel that is not taxed.
(7)
All refunds shall be issued within forty-five (45) days of the receipt
of the claim for refund, after which interest shall accrue at the
statutory rate.
C.
Implementation; quota method.
(1)
The Tribe may purchase an annual quota of motor fuel per the agreed
schedule without the imposition of the state motor fuel and sales
taxes. The entitlement shall be prospective and shall be reviewed
periodically. There shall be no retroactive reconciliation.
(2)
The Tribe shall acquire its tax-free quota of motor fuel from a single
pre-identified state-licensed wholesaler.
(3)
All motor fuel acquired for resale in excess of the quota shall be
purchased in accordance with state law from any state-licensed wholesaler
with state motor fuel taxes prepaid. All retail sales of such motor
fuel shall include the tax in the retail price.
(4)
The Tribe shall determine which retailers within the Agreement Area
will receive tax-free quota motor fuel.
(5)
All tax-free diesel fuel acquired under the quota will be clear diesel
fuel.
(6)
Tribes that engage in interstate transportation activities shall
be subject to the IFTA. No tax-free quota motor fuel shall be used
for interstate activities subject to IFTA.
(7)
The Tribe shall not engage in commercial intrastate transportation activities other than those associated with its casino gaming operations, as provided at § 10.1-3A(1)(d), with fuel that is not taxed.
D.
The Tribe shall ensure that tribal member and tribal entity retailers
only purchase motor fuel from state-licensed wholesalers. The Tribe
shall also ensure that tribal member and tribal entity retailers prepay
all taxes on motor fuel purchases except for quota exempt purchases
authorized by the Tribe.
E.
All sales of motor fuel by the Tribe, tribal members or tribal entities
to nontribal members shall be with all taxes paid and included in
the price.
F.
The Tribe, tribal members and tribal entities shall not act as importers,
wholesalers or suppliers of motor fuel unless licensed by the state.
The Tribe and the state agree that all tobacco products sold
within the Agreement Area shall be subject to the provisions of the
Tobacco Products Tax Act, except as provided in this agreement.[1]
A.
The Tribe may purchase a quantity of tax-exempt tobacco products.
The exempt purchases of cigarettes and other tobacco products shall
be administered by either the quota method or the refund method set
forth in this agreement.
B.
Implementation; refund method.
(1)
All tobacco products for resale shall be purchased in accordance
with state law from any state-licensed wholesaler and shall be tax
prepaid. Taxable sales of such tobacco products shall include the
tax in the retail price.
(2)
The Tribe shall determine which retailers within the Agreement Area
will be entitled to seek refunds on exempt sales.
(3)
The total amount of refunds obtainable by the Tribe or its designated
retailers shall be limited by a ceiling determined jointly by the
Tribe and the state in the same manner as a quota described in the
quota option set forth below. The entitlement shall be prospective
and shall be reviewed periodically. There shall be no retroactive
reconciliation.
(4)
All refunds shall be issued within forty-five (45) days of the receipt
of the claim for refund, after which interest shall accrue at the
statutory rate.
C.
Implementation; quota method.
(1)
The Tribe may purchase an annual quota of tobacco products without
the imposition of the state tobacco products tax. The entitlement
shall be prospective and shall be reviewed periodically. There shall
be no retroactive reconciliation.
(2)
The Tribe shall acquire its tax-free quota of tobacco products from
a single pre-identified state-licensed wholesaler.
(3)
All tobacco products acquired for resale in excess of the quota shall
be purchased in accordance with state law from any state-licensed
wholesaler with state tobacco products tax prepaid. All retail sales
of such tobacco products shall include the tax in the retail price.
(4)
The Tribe shall determine which retailers within the Agreement Area
will receive tax-free quota tobacco products.
(5)
All tobacco products purchased by the Tribe shall bear the state
tribal stamp.
D.
The Tribe shall ensure that tribal member and tribal entity retailers
only purchase tobacco products bearing the state tribal stamp and
only purchase from state-licensed wholesalers. The Tribe shall also
ensure that tribal member and tribal entity retailers prepay all taxes
on tobacco product purchases, except for quota exempt purchases authorized
by the Tribe.
E.
All sales of tobacco products by the Tribe, tribal members or tribal
entities to nontribal members shall be with all taxes paid and included
in the price.
F.
The Tribe, tribal members and tribal entities shall not act as wholesalers,
secondary wholesalers or unclassified acquirers of tobacco products
unless licensed by the state.
[1]
Editor's Note: See MCLA § 205.421 et seq.
A.
EXPANDED TRIBAL AGREEMENT AREA
RESIDENT TRIBAL MEMBER (SBT)
TRIBAL ENTITY (SBT)
TRIBAL MEMBER (SBT)
TRIBE (SBT)
For purposes of application of the single business tax section only,
the following definitions shall apply:
The lands within the combined agreement areas of each tribe
(SBT).
A tribal member (SBT) whose principal place of residence
is located within his or her Tribe's agreement area.
An entity other than a single tribe (SBT) acting alone or
single resident tribal member (SBT) acting alone, that is wholly comprised
of any combination of the tribe (SBT) and resident tribal members
(SBT), or is wholly owned by resident tribal members (SBT).
An individual who is an enrolled member of a tribe (SBT).
Any tribe that has entered into a tax agreement with the
state that is substantially similar to this agreement.
B.
The Single Business Tax Act (SBTA) exemptions provided by this agreement
will be applied without regard to the law under which an entity is
organized. Traded entities shall be subject to the SBTA without regard
to tribe (SBT) or tribal member (SBT) ownership and without regard
to the expanded tribal agreement area.
C.
Entities in which the ownership interests are entirely comprised
of one or more tribes (SBT), tribal members (SBT) or tribal entities
(SBT) that engage in business activity within the state will apportion
their tax base by application of the three statutory factors (property,
payroll and sales) to determine the portion of the tax base attributable,
if any, to the state but outside the expanded tribal agreement area.
The portion of the tax base attributable to the expanded tribal agreement
area will be exempt from the SBTA.
D.
Entities which are not wholly owned by any combination of tribes
(SBT), tribal members (SBT) or tribal entities (SBT) will apportion
their tax base by application of the three statutory factors (property,
payroll and sales) to determine the portion of the tax base attributable
to the state and to the expanded tribal agreement area. The portion
of the tax base attributable to the expanded tribal agreement area
which is equal to the percentage of ownership interests held in combination
of tribes (SBT), tribal members (SBT) or tribal entities (SBT) will
be exempt. The portion of the tax base attributable to nontribes (SBT),
nontribal members (SBT) or nontribal entities (SBT) is subject to
the SBTA for activity within the state both within and outside of
the expanded tribal agreement area. In calculating the state sales
factor of the apportionment formula, the numerator shall only exclude
sales that are destined to:
E.
To the extent a tax base or portion of a tax base is attributable
to the state under this agreement and a tax is due, a credit against
the tax may be claimed to the extent the business is conducted in
an area designated as a Renaissance Zone under state law (see MCLA
§ 125.2681 et seq.). The credit shall be determined in accordance
with state law using the payroll and property factors. The denominator
of the respective factors is calculated in accordance with state law,
except that payroll and property within the expanded tribal agreement
area must be excluded. The numerators of the respective factors will
be the property located within a designated Renaissance Zone, excluding
property within the expanded tribal agreement area, and the payroll
for services performed in a designated Renaissance Zone, excluding
payroll within the expanded tribal agreement area. The credit is otherwise
allowed in accordance with state law.
[Added 1-19-2008 by Res. No. 01-19-08-04[1]]
A.
EXPANDED TRIBAL AGREEMENT AREA
RESIDENT TRIBAL MEMBER (MBT)
TRIBAL ENTITY (MBT)
TRIBAL MEMBER (MBT)
TRIBE (MBT)
For purposes of application of the Michigan business tax section
only, the following definitions shall apply:
The lands within the combined agreement areas of each tribe
(MBT).
A tribal member (MBT) whose principal place of residence
is located within his or her Tribe's agreement area.
An entity other than a single tribe (MBT) acting alone or
single resident tribal member (MBT) acting alone, that is wholly comprised
of any combination of the tribe (MBT) and resident tribal members
(MBT), or is wholly owned by resident tribal members (MBT).
An individual who is an enrolled member of a tribe (MBT).
Any tribe that has entered into a tax agreement with the
state that is substantially similar to this agreement.
B.
The Michigan Business Tax Act (MBTA) exemptions provided by this
agreement will be applied without regard to the law under which an
entity is organized. Publicly traded entities shall be subject to
the MBTA without regard to tribe (MBT) or tribal member (MBT) ownership
and without regard to the expanded tribal agreement area.
C.
Entities in which the ownership interests are entirely comprised
of one or more tribes (MBT), tribal members (MBT) or tribal entities
(MBT) that engage in business activity within the state will apportion
their tax base by application of the statutory sales factor to determine
the portion of the tax base attributable, if any, to the state but
outside the expanded tribal agreement area. The portion of the tax
base attributable to the expanded tribal agreement area will be exempt
from the MBTA.
D.
Entities which are not wholly owned by any combination of tribes
(MBT), tribal members (MBT) or tribal entities (MBT) will apportion
their tax base by application of the statutory sales factor to determine
the portion of the tax base attributable to the state and to the expanded
tribal agreement area. The portion of the tax base attributable to
the expanded tribal agreement area, which is equal to the percentage
of ownership interests held in combination of tribes (MBT), tribal
members (MBT) or tribal entities (MBT), will be exempt. The portion
of the tax base attributable to nontribes (MBT), nontribal members
(MBT) or nontribal entities (MBT) is subject to the MBTA for activity
within the state both within and outside of the expanded tribal agreement
area. In calculating the state sales factor of the apportionment formula,
the numerator shall only exclude sales that are destined to:
E.
To the extent a tax base or portion of a tax base is attributable
to the state under this agreement and a tax is due, a credit against
the tax may be claimed to the extent the business is conducted in
an area designated as a Renaissance Zone under state law (see MCLA
§ 125.2681 et seq.). The credit shall be determined in accordance
with state law using the payroll and property factors. The denominator
of the respective factors is calculated in accordance with state law,
except that payroll and property within the expanded tribal agreement
area must be excluded. The numerators of the respective factors will
be the property located within a designated Renaissance Zone, excluding
property within the expanded tribal agreement area, and the payroll
for services performed in a designated Renaissance Zone, excluding
payroll within the expanded tribal agreement area. The credit is otherwise
allowed in accordance with state law.
[1]
Editor's Note: This is the Second Amendment to the Tax Agreement.
A.
Consistent with state law, the Tribe, tribal members and tribal entities
shall maintain records (including retention of original receipts other
than those for purchases claimed on the sales tax table return) sufficient
to substantiate claims for exemption from tax under this agreement.
B.
By December 15 of each year, the Tribe shall provide to the state
a current list of:
(2)
Tribal, tribal member and tribal entity businesses operating within
the Agreement Area. The list shall state the business name, the business
address, the business' federal tax identification number, and the
name(s) of the business owners. The list shall also identify:
[Amended 8-1-2007 by Res. No. 08-01-07-01[2]]
(a)
Businesses that are engaged in the sale or storage of motor
fuel, with a statement as to the location of the storage tanks;
(b)
Businesses that are engaged in the sale or storage of tobacco products, identifying the facilities operated by the Tribe; provided, however, that in identifying a facility owned, leased or operated by the Tribe, the Tribe may designate the specific rooms in the facility where tobacco products are authorized to be stored or offered for sale under this agreement. If such a designation is made, the state's authority to conduct inspections referenced at § 10.1-14C(4)(a) without a tribal court order shall be limited to the whole of the rooms designated and all rooms which are directly accessible from those rooms as well as all areas through which tobacco products are transported. In the absence of a designation of rooms, the state shall be permitted to inspect the entire facility designated;
(c)
Businesses that are authorized by the Tribe to sell tax-exempt
motor fuel; and
(d)
Businesses that are authorized by the Tribe to sell tax-exempt
tobacco products.
[2]
Editor's Note: This is the First Amendment to the Tax Agreement.
(3)
Nontribal businesses operating within the Tribal Agreement Area that
are authorized by the Tribe to sell tax-exempt motor fuel;
(4)
Nontribal businesses within the Agreement Area that are authorized
by the Tribe to sell tax-exempt tobacco products; and
(5)
The tribal official(s) authorized to sign tribal certificates of exemption on behalf of the Tribe as provided at § 10.1-13B(1)(a) or refund requests under § 10.1-13B(2) of this agreement.
C.
The Tribe shall notify the state in writing of all lands, title to which is acquired in the name of the Tribe or in federal trust for the Tribe after execution of this agreement, which are within the Agreement Area or claimed as tribal and trust lands under § 10.1-2 of this agreement.[3] If the parties agree, Appendix A, setting forth the tribal
and trust lands, shall be amended to reflect all of the lands that
are tribal and trust lands under this agreement.[4]
[3]
Editor's Note: See the definitions of "Agreement Area" and "tribal and trust lands" in § 10.1-2.
[4]
Editor's Note: Appendix A is attached to this chapter.
A.
Income tax.
(1)
Part 1 - Individual (§ 10.1-4A). All resident tribal members shall file a state individual income tax return if they owe a Michigan individual income tax, are due a refund, or their federal adjusted gross income exceeds their exemption allowance. See MCLA § 206.30(2) and (3). In addition, a resident tribal member shall file a return in all instances where a federal return is required in order to eliminate unnecessary correspondence with the Department. A taxpayer who is entitled to exemption based on this agreement shall complete a schedule in accordance with its instructions whereat the subtractions will be taken. These subtractions shall then be carried over to the MI-1040.
(2)
Part 2 - Corporate (§ 10.1-4B). A taxpayer claiming entitlement to exemptions provided in this agreement shall prepare and file the Michigan corporate income tax (CIT) annual return Form 4891. A taxpayer claiming CIT exemption under this agreement shall complete a separate schedule, which will guide the taxpayer through the special apportionment calculations to arrive at the nonexempt sales numbers, which will then be carried over to Form 4891 for use in completing the return.
B.
Withholding. Withholding is to be done in accordance with regulations/instructions
applicable to all persons required to withhold.
C.
Single business tax. A taxpayer claiming entitlement to exemptions
provided in this agreement shall prepare and file the SBT annual return
form C-8000. The C-8000 shall have a box on its face indicating that
the taxpayer is claiming exemptions under this agreement. A taxpayer
who checks that box will be directed to complete a separate schedule,
which will guide the taxpayer through the special apportionment calculations
to arrive at the nonexempt property, payroll and sales numbers, which
will then be carried over to the C-8000H for use in completing the
return.
D.
Michigan business tax. A taxpayer claiming entitlement to exemptions
provided in this agreement shall prepare and file the MBT annual return
Form 4567. A taxpayer claiming MBT exemption under this agreement
shall complete a separate schedule, which will guide the taxpayer
through the special apportionment calculations to arrive at the nonexempt
sales numbers, which will then be carried over to Form 4567 for use
in completing the return.
The Tribe shall utilize either a quota system or a refund system
to acquire motor fuel for exempt tribal and tribal member use as determined
by the quota or refund ceiling. The election to use a refund or quota
system shall be effective for an entire calendar year. The Tribe may
change from one system to the other upon at least sixty (60) days'
written notice to the state. The change shall be effective on the
first day of the next calendar year.
A.
Quota system.
(1)
The quota amount shall be determined by negotiation and will
be reviewed and may be adjusted by mutual consent of the parties,
on request of either party but not more frequently than semiannually
(in May and November) during the first two (2) years of this agreement.
Thereafter, the quota amount will be reviewed at the request of either
party and may be adjusted by mutual consent of the parties, but not
more frequently than annually. A separate quota shall be established
for gasoline and diesel. The quota will be calculated on a twelve-month
basis. In any given month, the total amount of tax-free quota motor
fuel delivered to the Tribe and those authorized by the Tribe to store
or sell tax-free motor fuel shall not exceed 15% of the total quota
amount calculated on a twelve-month basis.
(2)
The Tribe shall purchase all of its tax-free quota motor fuel
from a single wholesaler licensed by the state. The Tribe shall notify
the state in writing of the wholesaler it will use, prior to making
any purchase of tax-free quota motor fuel. The state shall contact
the wholesaler and authorize the quantity of tax-free quota motor
fuel to be sold to the Tribe. The designated wholesaler may be changed
by written notice to the state, providing the name of the new wholesaler
and providing at least fourteen (14) days' advance notice of the date
that the change will be effective. The notice from the Tribe to the
state shall also state the total number of gallons purchased from
the old wholesaler and the number of gallons remaining to be purchased
under the quota. The state shall then advise the new supplier that
it is authorized to make sales of tax-free quota motor fuel to the
Tribe and the amount remaining under the quota.
(3)
The Tribe shall determine which retailers within the Agreement
Area will be authorized to purchase and sell tax-free motor fuel and
the quantities that each retailer may acquire. The Tribe shall establish
a system whereby the Tribe shall preapprove, and clearly designate
all purchases of tax-free fuel prior to submission to the wholesaler.
In addition to maintaining the books and records required by state
law, all authorized retailers (including the Tribe itself) shall maintain
a log of their purchases of tax-free quota motor fuel, showing the
delivery date and the type (gasoline or diesel) and quantity of fuel
purchased.
(4)
The Tribe shall maintain a record of its use of tax-free motor
fuel acquired under the quota. This record shall indicate the vehicle(s)
in which motor fuel is used, the number of gallons used by each vehicle
(or each category of vehicles), and a general description of the use
of the vehicles.
B.
Refund system.
(1)
A refund ceiling shall be negotiated and will be reviewed and
may be adjusted by mutual consent of the parties, upon written request
of either party but not more frequently than semiannually (in May
and November) during the first two (2) years of this agreement. Thereafter,
the refund ceiling amount will be reviewed at the request of either
party and may be adjusted by mutual consent of the parties, but not
more frequently than annually. Separate refund ceilings shall be established
for both gasoline and diesel for which a refund will be sought. The
refund ceilings shall be calculated on a twelve-month basis.
(2)
The Tribe shall determine which retailers located within the
Agreement Area will be entitled to seek a refund for sales of motor
fuel. The Tribe shall be responsible for devising a means for dividing
the refund ceiling(s) among the retailers authorized by the Tribe
to receive refunds and the Tribe itself. The retailers authorized
by the Tribe to receive refunds shall submit their claims to the Tribe,
which will compile them as a single request to be filed with the state
on a monthly or quarterly basis. The state will then issue a single
refund check to the Tribe. The state will not make additional refunds
for the period covered under the refund ceiling once the refund ceiling
amount has been reached.
(3)
In addition to maintaining the books and records required by
state law, all authorized retailers (including the Tribe itself) shall
maintain a log of their sales of tax-free motor fuel, showing the
date, the purchaser's name, the purchaser's tribal identification
number, the purchaser's signature, and the amount and type (gasoline
or diesel) of fuel purchased. The purchaser's signature shall
not be required if a swipe-card system, acceptable to both the Tribe
and the state, is utilized.
(4)
Upon receipt of a refund request from the Tribe, the state shall
verify that the refund ceiling has not been exceeded and then process
the request. Interest will be paid at the statutory rate if the refund
is not paid within forty-five (45) days of receipt by the Department.
(5)
The Tribe shall maintain a record of its use of tax-free motor
fuel acquired under the refund ceiling. This record shall indicate
the vehicle(s) in which motor fuel is used, the number of gallons
used by each vehicle (or each category of vehicles), and a general
description of the use of the vehicles.
The Tribe shall utilize either a quota system or a refund system
to acquire tobacco products for tribal and tribal member use as determined
by the quota or refund ceiling. The election to use a refund or quota
system shall be effective for an entire calendar year. The Tribe may
change from one system to the other upon at least sixty (60) days'
written notice to the state. The change shall be effective on the
first day of the next calendar year.
A.
Quota system.
(1)
The quota amount shall be determined by negotiation and will
be reviewed and may be adjusted by mutual consent of the parties on
request of either party, but not more frequently than semiannually
(in May and November) during the first two (2) years of this agreement.
Thereafter, the quota amount will be reviewed at the request of either
party and may be adjusted by mutual consent of the parties, but not
more frequently than annually. A separate quota shall be established
for cigarettes and other tobacco products. The quota shall be calculated
on a twelve-month basis. In any given month, the total amount of tax-free
quota tobacco products delivered to the Tribe and those authorized
by the Tribe to store or sell tax-free tobacco products shall not
exceed 15% of the total quota amount calculated on a twelve-month
basis.
(2)
The Tribe shall purchase all of its tax-free quota tobacco products
from a single wholesaler licensed by the state. The Tribe shall notify
the state in writing of the wholesaler it will use, prior to making
any purchase of tax-free quota tobacco products. The state shall contact
the wholesaler and authorize the quantity of tax-free quota tobacco
products to be sold to the Tribe. The designated wholesaler may be
changed by written notice to the state, providing the name of the
new wholesaler and providing at least fourteen (14) days' advance
notice of the date that the change will be effective. The notice from
the Tribe to the state shall also state the total number of cigarette
sticks and quantity of other tobacco products purchased from the old
wholesaler and the number of cigarette sticks and quantity of other
tobacco products remaining to be purchased under the quota. The state
shall then advise the new supplier that it is authorized to make sales
of tax-free quota tobacco products to the Tribe and the amount remaining
under the quota.
(3)
All cigarettes sold to retailers authorized to sell tax-free
cigarettes shall bear the state tribal stamp.
(4)
The Tribe shall determine which retailers within the Agreement
Area will be authorized to purchase and sell tax-free tobacco products
and the quantities that each retailer may acquire. The Tribe shall
establish a system whereby the Tribe shall preapprove and clearly
designate all purchases of tax-free product prior to submission to
the wholesaler. In addition to maintaining the books and records required
by state law, all authorized retailers (including the Tribe itself)
shall maintain a log of their purchases of tax-free quota tobacco
products, showing the date, type (cigarettes, cigar, chew, etc.),
quantity and brand.
B.
Refund system.
(1)
A refund ceiling shall be negotiated and will be reviewed and
may be adjusted by mutual consent of the parties upon written request
of either party, but not more frequently than semiannually (in May
and November) during the first two (2) years of this agreement. Thereafter,
the refund ceiling amount will be reviewed at the request of either
party and may be adjusted by mutual consent of the parties, but not
more frequently than annually. A separate refund ceiling shall be
established for cigarettes and other tobacco products for which a
refund will be sought. The refund ceiling shall be calculated on a
twelve-month basis.
(2)
The Tribe shall determine which retailers located within the
Agreement Area will be entitled to seek a refund for sales of tobacco
products. The Tribe shall be responsible for devising a means for
dividing the refund ceiling(s) among the retailers authorized by the
Tribe to receive refunds and the Tribe itself. The retailers authorized
by the Tribe to receive refunds shall submit their claims to the Tribe,
which will compile them as a single request to be filed with the state
on a monthly or quarterly basis. The state will then issue a single
refund check to the Tribe. The state will not make additional refunds
for the period covered under the refund ceiling(s) once the refund
ceiling(s) amount has been reached.
(3)
In addition to maintaining the books and records required by
state law, all authorized retailers (including the Tribe itself) shall
maintain a log of their sales of tax-free tobacco products, showing
the date, type, quantity and brand of product sold with the name,
tribal identification number, and signature of the purchaser. The
purchaser's signature shall not be required if a swipe-card system,
acceptable to both the Tribe and the state, is utilized.
(4)
Upon receipt of a refund request from the Tribe, the state shall
verify that the refund ceiling has not been exceeded and then process
the request. Interest will be paid at the statutory rate if the refund
is not paid within forty-five (45) days of receipt by the Department.
A.
General.
(1)
A tribal member or tribal entity retailer making a sale within
the Agreement Area to the Tribe, a resident tribal member or a tribal
entity which is exempt under the terms of this agreement need not
collect sales tax or use tax on such a sale. No refund requests will
be honored for a purchase from a retail establishment owned by the
Tribe, a tribal member or a tribal entity located with the Agreement
Area.
(2)
To obtain the benefit of statutory exemptions other than those specifically identified in § 10.1-3A(1), (2), (3) or (4), of this agreement, the Tribe, tribal member or tribal entity shall use the standard procedures and forms used by all taxpayers claiming exemption. See Revenue Administrative Bulletin 2002-15.
B.
Tribal purchases. The Tribe shall have the option of using a tribal
certificate of exemption or seeking a refund of sales tax and use
tax paid for those transactions that are exempt under the terms of
this agreement.
(1)
Tribal certificate of exemption option.
(a)
Application for tribal certificate of exemption. The Tribe may apply for a tribal certificate of exemption by filing a written request with the Department, stating the name and business address of the Tribe and the names and titles of the Tribal officials that are authorized by the Tribe to sign tribal certificate of exemption on behalf of the Tribe. Upon receipt of the Tribe's request signifying its election to use the tribal certificate of exemption, the Department shall issue to the Tribe a letter of authorization, indicating that it may begin using the tribal certificate of exemption as provided in this § 10.1-13.
(b)
Use of tribal certificate of exemption. To obtain the benefit of an exemption under § 10.1-3A(1), (3) and (4) of this agreement, the Tribe shall present to the vendor or contractor a signed tribal certificate of exemption with a copy of the letter of authorization attached. In the case of affixation to real property by a contractor, the contractor shall submit the tribal certificate of exemption, together with the contractor's sales and use tax certificate of exemption, to the supplier at the time of purchase.
(c)
The Tribe shall not use or authorize the use of any tribal certificate
of exemption after the termination of this agreement.
(2)
Refund option.
(a)
General. If the Tribe does not choose to use a tribal certificate of exemption, it may instead seek a refund under § 10.1-3A(1), (3), and (4) of sales tax and use tax on a monthly or quarterly basis using a tribal sales tax and use tax refund form prescribed by the Department. The refund request shall be signed by a designated official of the Tribe.
(b)
Taxes paid by contractor. The Tribe may seek reimbursement from the state of sales tax and use tax paid by a contractor under § 10.1-3A(3). Refund claims shall be filed on the tribal sales tax and use tax refund form and accompanied by a signed statement from the contractor, stating the location at which materials were affixed to real estate, the date that the work was done, the amount paid for materials, and the sales tax and use tax paid on the purchases of the materials.
C.
Resident tribal member and tribal entity purchases.
(1)
Tribal certificate of exemption option. If the Tribe has elected to use a tribal certificate of exemption under Subsection B(1), the Tribe may elect to authorize resident tribal members or tribal entities to use a tribal certificate of exemption for the purchases described in this Subsection C(1)(a) or (c) below. If the Tribe so elects and notifies the state of such election, resident tribal members and tribal entities shall use a tribal certificate of exemption and may not seek refunds of taxes paid for purchases described in Subsection C(1)(a) or (c) below.
(a)
Resident tribal member purchases where a tribal certificate
of exemption must be used:
[Amended 8-1-2007 by Res. No. 08-01-07-01[1]]
[1]
Section 10.1-3A(2)(a) (only for the purchase and affixation by the resident tribal member of materials for construction, renovation or improvement of real property owned by the Tribe or the federal government in trust for the Tribe which is located within tribal and trust lands);
[2]
Section 10.1-3A(2)(b) (only for the purchase and affixation by the resident tribal member of materials for construction, renovation or improvement of his or her principal residence within the Agreement Area);
[3]
Section 10.1-3A(2)(c) and (d);
[4]
Section 10.1-3A(2)(e);
[5]
Section 10.1-3A(3); and
[6]
Section 10.1-3A(4).
[1]
Editor's Note: This is the First Amendment to the Tax Agreement.
(b)
Resident tribal member purchases where a tribal certificate of exemption may not be used: A resident tribal member may only obtain the benefit of an exemption under § 10.1-3A(2)(a) (except for purchases of materials for construction, renovation or improvement of real property owned by the Tribe or the federal government in trust for the Tribe which is located in tribal and trust lands) by filing a refund using the Resident Tribal Member/Tribal Entity Sales Tax and Use Tax Refund Request form.
(c)
Tribal entity purchases where a tribal certificate of exemption
must be used:
[1]
Section 10.1-3A(1)(a) (only for the purchase and affixation by a tribal entity of materials or construction, renovation or improvement of real property owned by the Tribe or the federal government in trust for the Tribe which is located within tribal and trust lands);
[2]
Section 10.1-3A(3)(a); and
[3]
Section 10.1-3A(4)(b).
(d)
Tribal entity purchases where a tribal certificate of exemption may not be used: A tribal entity may only obtain the benefit of an exemption under § 10.1-3A(1)(a) (except for purchases of materials for construction, renovation or improvement of real property owned by the Tribe or the federal government in trust for the Tribe which is located in tribal and trust lands) by filing a refund using the Resident Tribal Member/Tribal Entity Sales Tax and Use Tax Refund Request form.
(e)
Issuance of tribal certificate of exemption. A resident tribal member or tribal entity shall submit to the Tribe a signed resident tribal member/tribal entity claim indicating the requester's name, address, items to be purchased (including identification numbers for vehicles and mobile homes) and, in the case of a resident tribal member, his or her identification number and a certification that the resident tribal member resides within the Agreement Area. In those instances where the claim is made under § 10.1-3A(3), a signed statement from the contractor stating the location at which materials will be affixed to real estate, the date that the work is to be done, and an estimate as to the amount to be paid for materials shall also be submitted to the Tribe by the resident tribal member or tribal entity seeking authorization. Upon verifying the information provided in the claim and determining that the claim is consistent with the terms of this agreement, an authorized tribal representative shall complete and sign a tribal certificate of exemption authorizing the resident tribal member's or tribal entity's exempt purchase. The certificate shall indicate the name of the requester, the items to be purchased, including identification numbers for vehicles and mobile homes, and, for resident tribal members, the resident tribal member's identification number.
(f)
Use of tribal certificate of exemption. If a tribal certificate of exemption is issued to a resident tribal member or tribal entity, the resident tribal member or tribal entity shall present the certificate (together with the letter of authorization) to the vendor or contractor at the point of purchase. In those instances where the claim is made for purchase of material affixed to real property by a contractor under § 10.1-3A(3), the resident tribal member or tribal entity shall obtain a tribal certificate of exemption from the Tribe, indicating the resident tribal member or tribal entity as the purchaser and the contractor as the seller. The contractor shall complete a Michigan Sales and Use Tax Certificate of Exemption (Form 3372) and present the form, together with the tribal certificate of exemption and the letter of authorization, to the vendor/supplier of the tangible personal property that will be affixed to the real estate. Where a contractor is used for affixation or construction under § 10.1-3A(3), when obtaining the tribal certificate of exemption from the Tribe, the resident tribal member shall also submit (in addition to any other required documentation) a signed statement from the contractor, stating the location at which materials will be affixed to real property, the date that the work is to be done, and an estimate as to the amount to be paid for materials.
[Amended 8-1-2007 by Res. No. 08-01-07-01[2]]
[2]
Editor's Note: This is the First Amendment to the Tax Agreement.
(2)
Refund method (without tribal certificate of exemption authorization). If the Tribe has not elected to use tribal certificates of exemption as provided at § 10.1-13B(1), or has elected to use the tribal certificate of exemption at § 10.1-13B(1) but has not authorized its resident tribal members and tribal entities to use tribal certificates of exemption, resident tribal members and tribal entities shall pay sales tax and use tax on all purchases, except those that would be exempt under state law in the absence of this agreement or those made from a tribal, tribal member or tribal entity retailer where the retailer is not required to collect tax as described in § 10.1-13A(1). Refund requests for sales tax and use tax shall be made on the resident tribal member/tribal entity sales tax and use tax refund request form, as follows:
(a)
A resident tribal member may seek a refund of sales tax and use tax paid on transactions exempted under § 10.1-3A(2)(a), (b) (only for the purchase and affixation by the resident tribal member of materials for construction, renovation or improvement of his or her principal residence within the Agreement Area), (c), (d), (e), (3) and (4) of this agreement.
[Amended 8-1-2007 by Res. No. 08-01-07-01[3]]
[3]
Editor's Note: This is the First Amendment to the Tax Agreement.
(b)
A resident tribal member may seek a refund of sales tax and use tax paid by a contractor under § 10.1-3A(3), as follows:
[1]
Within tribal and trust lands. The resident tribal member shall
use the resident tribal member/tribal entity sales tax and use tax
refund request and shall also file a signed statement from the contractor,
stating the location at which materials were affixed to real estate,
the date the work was done, the amount paid for materials, and the
sales tax and use tax paid on the purchases of the materials. If the
claim is for an affixation to a resident tribal member's principal
residence, the resident tribal member shall attest to that fact.
[2]
Personal residence within agreement area. The resident tribal
member shall use the resident tribal member/tribal entity sales tax
and use tax refund request and shall also file a signed statement
from the contractor, stating the location at which materials were
affixed to real estate, the date the work was done, the amount paid
for materials, and the sales tax and use tax paid on the purchases
of the materials. If the claim is for an affixation to a resident
tribal member's principal residence, the resident tribal member
shall attest to that fact.
(c)
Tribal entities may seek refunds for taxes paid on transactions exempted under § 10.1-3A(3)(a) and (4)(b) of this agreement.
(d)
Tribal entities may seek a refund of sales tax and use tax paid by a contractor under § 10.1-3A(3)(a). The tribal entity shall file a signed statement from the contractor, stating the location at which materials were affixed to real estate, the date the work was done, the amount paid for materials, and the sales tax and use tax paid on the purchases of the materials.
(e)
Refund request form content. The resident tribal member/tribal
entity sales tax and use tax refund request form shall require the
following information and attachments:
[1]
The name of the purchaser with tribal affiliation, member number,
resident address;
[2]
The date of the purchase;
[3]
The name and address of the vendor;
[4]
A description of the item(s) purchased;
[5]
For items claimed exempt under § 10.1-3A(2)(c) and (d), the sales tax account number of the vendor;
[6]
The original receipt;
[7]
For a passenger vehicle, pickup truck, recreational vehicle,
motorcycle, recreational watercraft, snowmobile or off-road vehicle
(ORV), the vehicle identification number and a statement as to where
the items will be principally garaged, berthed or stored;
[8]
For a vehicle required to be registered with the Secretary of
state, an RD-108 form;
[9]
For a modular or mobile home, the unit serial number and a statement
that the purchase is for use exclusively within the tribal and trust
lands or as a principal residence within the Agreement Area;
[10]
For a purchase or acquisition of tangible personal
property for use in exercising of a treaty fishing right, a statement
that the property will be used in the exercise of the right.
(f)
Filing and payment of refund requests. Resident tribal member/tribal
entity sales tax and use tax refund request forms may be filed with
the state in April, July, October and January. The state shall pay
refunds and interest on late payments in accordance with state law.
(3)
Refund Table: resident tribal members.
(a)
A resident tribal member shall be entitled to an annual refund representing sales tax and use tax paid on tangible personal property acquired under § 10.1-3A(2)(b) (except for the purchase and affixation by the resident tribal member of materials for construction, renovation or improvement of his or her principal residence within the Agreement Area). This refund shall apply under both the tribal certificate of exemption method described in § 10.1-13C(1), above, and the refund method described in § 10.1-13C(2) above. This refund shall be determined by use of the following table:
[1]
Resident tribal member's federal adjusted gross income
modified to include social security benefits, social security disability
benefits, railroad retirement benefits, veteran disability pay, 50%
of the combat zone compensation for enlisted members of the armed
forces, unemployment benefits, fishing income under Section 7873 of
the Internal Revenue Code, public assistance payments made directly
to a resident tribal member pursuant to a tribal supplemental assistance
program qualifying for exemption under the Tribal General Welfare
Exclusion Act of 2014, and disability income to the extent they are
specifically exempt from or excluded from the computation of federal
adjusted gross income (but not to exceed $80,000) x 15% x 6%.
(b)
The Table shall be reviewed upon the written request of either
party with notice to all other tribes that have agreements that are
substantially similar to this agreement but not more frequently than
once every three (3) years. It is the intent of the parties that any
revision to the Table shall be uniformly applied to all tribes that
have agreements that are substantially similar to this agreement.
D.
Collection, remittance and sharing of sales and use taxes.
(1)
Outside of tribal and trust lands. Except as provided at § 10.1-13A(1), the Tribe, tribal members and tribal entities operating as retailers anywhere in the state outside of tribal and trust lands shall collect and remit sales tax and use tax to the state in accordance with state procedures generally applicable to retail sellers.
(2)
Inside tribal and trust lands.
(a)
In those instances where the Tribe has not enacted its own sales tax on transactions occurring within tribal and trust lands, the Tribe, tribal members, and tribal entities operating as retailers within tribal and trust lands shall collect and remit state sales tax or use tax, as applicable, in accordance with state procedures generally applicable to retail sellers, on a special form prescribed by the state. The Department shall, not later than forty-five (45) days after the close of the calendar quarter or the receipt of all of the prescribed returns, whichever is later, review the information received and send a check to the Tribe, together with a schedule showing the calculation of the amount paid to the Tribe pursuant to § 10.1-3A(2) of this agreement. The state shall pay interest at the statutory rate applicable for refunds not paid as of the 45th day following the later of the end of the calendar quarter or the receipt of all of the prescribed returns.
(b)
In those instances where the Tribe has enacted its sales tax on transactions occurring within tribal and trust lands, which is subject to sharing under the terms of the agreement, the Tribe shall collect the taxes due and shall, not later than forty-five (45) days after the close of each quarter, compile the information received during the quarter and send a check to the state, together with a schedule showing the calculation of the amount paid to the state pursuant to §10.1-3A(3) of this agreement. The Tribe shall pay interest at the statutory rate provided under state law for refunds not paid as of the 45th day following the end of the calendar quarter.
[Amended 8-1-2007 by Res. No. 08-01-07-01[6]]
[6]
Editor's Note: This is the First Amendment to the Tax Agreement.
E.
Record retention.
(1)
General.
(a)
Records shall be separately maintained for items that are claimed
exempt on the basis that the transaction occurred in and the use is
exclusively in tribal and trust lands.
(b)
Tribal, tribal member and tribal entity retailers shall maintain
records regarding sales that are not taxable sales under this agreement.
(c)
With respect to sales on which no tax was collected as provided in § 10.1-13A(1), tribal, tribal member and tribal entity retailers shall maintain a record of such sales, including the date, the name and tribal identification number of the purchaser, the amount and, for any item of more than $50 or sales of more than $200 in the aggregate, the identification of the items purchased and any other data sufficient to document the exemption. This Subsection E(1)(c) shall not apply to sales of motor fuel.
(2)
Tribe.
(a)
For each item claimed exempt under § 10.1-3A(1)(b) that is not used exclusively for a governmental function, the Tribe shall maintain a log setting forth all uses of the item and the amount of each use. In establishing the percentage of each type of use, the Tribe shall consistently use the same measure for each class of item. For example, a vehicle-use log would typically be maintained on the basis of miles driven. A copy-machine log would typically be maintained on the basis of number of copies made for each respective use. A log for a piece of heavy equipment, such as a snowplow, may be maintained on the basis of hours of actual use excluding storage time or on the basis of miles plowed.
(b)
If the Tribe is authorized under this agreement to use the tribal
certificate of exemption, the Tribe shall separately maintain a copy
of all exemption certificates used.
(3)
Resident tribal members and tribal entities. If the Tribe is
authorized under this agreement to use the tribal certificate of exemption
and the Tribe authorizes a resident tribal member or tribal entity
to use such a certificate, the resident tribal member or tribal entity
shall maintain a copy of all certificates used. For items not covered
by the Table, information and documentation must also be retained
to substantiate where the transaction took place. This information
shall include shipping documents showing the manner and means by which
the item was delivered, e.g., common carrier, seller's truck,
purchaser's truck, postal service, etc.
F.
Tribal responsibility for tribal, tribal member or tribal entity
use of the tribal certificates of exemption. The Tribe shall be responsible
for and agrees to pay to the state any sales tax or use tax, including
interest, resulting from the use of tribal certificate of exemption
in the following situations:
(1)
Tribal use.
(b)
Use prior to termination. Where the state, after termination
of this agreement, discovers a certificate that was used prior to
termination of this agreement and asserts that the transaction is
not exempt under this agreement.
(c)
Use after termination. Where the Tribe uses a tribal certificate
of exemption after termination of this agreement.
(2)
Tribal member and tribal entity use.
(a)
Use prior to termination whenever discovered. Where there is
a final determination of liability against a tribal member or tribal
entity which remains unpaid for sixty (60) days following the final
determination of the liability.
(b)
Use after termination. Where the state has issued a final assessment
with respect to the use of a tribal certificate of exemption by a
tribal member or tribal entity after termination of this agreement
and the assessment remains unpaid for sixty (60) days after its issuance.
(c)
Prior to holding the Tribe responsible as provided in this § 10.1-13F for the wrongful use of a tribal certificate of exemption by a tribal member or tribal entity, the state shall give the Tribe notice of such use, including the name of the tribal member or tribal entity using the certificate, the date of the occurrence and of a copy of the tribal certificate of exemption alleged to have been wrongfully used. The Tribe agrees to pay the sales tax or use tax, together with interest, within sixty (60) days of receiving the notice. The obligations contained in this § 10.1-13F shall survive the termination of this agreement.
(3)
Contractor exemption: use after termination. Notwithstanding the provisions of § 10.1-13F(1) and (2) above, a tribal certificate of exemption provided by Tribe, resident tribal member or tribal entity to a contractor for the purpose of construction, improvement or renovation of real property as permitted in § 10.1-3A(3) shall remain effective after the termination of this agreement by the state until the contract is completed, but not to exceed a period of twelve (12) months; provided, however, that such contract may not be expanded or extended after the state provides notice of its intent to terminate the agreement; provided, further, that the use and benefit of such certificates shall not be extended beyond the termination of the agreement where the agreement is terminated by the state for cause or is voluntarily terminated by the Tribe.
G.
Utilities. The Tribe shall provide the state with a list of utility,
telecommunications, cable, and Internet providers serving the Agreement
Area. The state shall advise the providers of the terms of this agreement
and that sales to named individuals and businesses shall be made without
the imposition of sales tax or use tax.
H.
Rental rooms. Except as otherwise provided by this agreement, the
Tribe, resident tribal members and tribal entities shall remit, in
accordance with regular state law procedures, use tax on rooms subject
to tax under state law.
A.
General. Consistent with the purposes of this agreement, the determination
of the tax liability owed to the state by the Tribe, tribal members,
and tribal entities pursuant to this agreement, and the enforcement
of the payment of any such liability, shall be made in accordance
with state law, except as modified by the terms of this agreement.
State law, including judicial decisions interpreting state law, prescribing
the scope and entitlement to exemptions or deductions other than those
recognized in this agreement shall govern the determination of tax
liability. To the extent that the provisions of this agreement differ
from those of the otherwise applicable state law, this agreement shall
control.
B.
Enforcement action against nontribal members in Indian country. The
state may exercise its tax enforcement authority under state law with
respect to a nontribal member or nontribal entity located or doing
business within Indian country; provided, however, that where the
nontribal member or nontribal entity is located or doing business
on trust lands, the state shall, before taking any enforcement action
that requires entry upon such lands, provide notice of the proposed
enforcement action to the tribal police or public safety department.
Upon receipt of such notice, the tribal police or public safety department
may direct one or more officers to accompany the state officers during
the enforcement activity. If the tribal police or public safety department
is unable or unwilling to promptly assign a tribal officer to accompany
the state officers, the state officers may, nonetheless, carry out
the proposed enforcement action against the nontribal member or nontribal
entity without the participation of a tribal officer.
C.
Enforcement action against the Tribe.
(1)
Criminal penalties. The Tribe and its officers, officials, employees
and agents acting within the scope of their authority are not subject
to the criminal penalty provisions imposed by state law with respect
to taxes that are the subject of this agreement. This provision shall
not be construed to limit the state's ability to collect interest
on past due taxes as authorized by state law.
(2)
Notice of audit. The state shall have the authority to conduct
routine audits of the Tribe with respect to taxes that are the subject
of this agreement for all periods or partial periods commencing after
the effective date of this agreement and until this agreement has
been terminated. Prior to conducting any such audit, the state shall
provide the Tribe with at least thirty (30) days' advance written
notice. The notice shall include a statement of the business to be
audited, the tax(es) involved in the audit, and the taxable period(s)
at issue.
(3)
Seizure for tax liabilities. Tribal assets, wherever situated,
are not subject to seizure nor the filing of notices of state tax
liens to enforce a tax liability owed to the state under this agreement.
In lieu of such seizures and the filing of notices of state tax liens,
dispute resolution or termination as provided in this agreement shall
be used to resolve issues.
(4)
Inspections and seizures within Indian country. Notwithstanding § 10.1-14C(3), for purposes of enforcing the provisions of the Tobacco Products Tax Act, the Motor Fuel Tax Act, or the Motor Carrier Fuel Tax Act, as those acts are modified by this agreement, the Tribe grants to the state the authority to take the following actions within the Tribe's Indian country:
(a)
The state may conduct inspections (including unannounced inspections) of tribal facilities that have been identified by the Tribe to the state as facilities where tobacco [see § 10.1-9B(2)(b)] or motor fuel [see § 10.1-9B(2)(a)] products are sold or stored under this agreement as well as the vehicles used to transport these products. If the inspection reveals any tobacco or motor fuel products held in violation of the Tobacco Products Tax Act, the Motor Fuel Tax Act, or the Motor Carrier Fuel Tax Act, as those acts are modified by this agreement, the state may seize any such tobacco or motor fuel and any vehicle (including trailers) in which such product is found, together with associated books and records.
(b)
If the state is lawfully at a location within a tribally owned facility and discovers in plain view any tobacco or motor fuel products held in violation of the Tobacco Products Tax Act, the Motor Fuel Tax Act, or the Motor Carrier Fuel Tax Act, as those acts are modified by this agreement, the state officer may seize such product. The authority described in this § 10.1-14C(4)(b) is not intended to authorize any state officer to enter into areas not otherwise open to the public or open to inspection by the state under the terms of this agreement.
[1]
If the state has reason to believe that tobacco or motor fuel
products may be transported or stored by the Tribe within its Indian
country contrary to the terms of this agreement, the state may apply
to the Tribal Court for a search warrant authorizing inspection of
such locations. The Tribal Court shall rule on the search warrant
request within twenty-four (24) hours of receiving the application
and shall issue the warrant if the Court finds that the state has
reasonable cause to believe that tobacco or motor fuel may be stored
at the location(s) set forth in the request. If the state is concerned
that unlawful product may be removed during the pendency of such an
application, the tribal police shall, upon the request of the state,
secure the location or vehicle until the Tribal Court makes its determination.
[2]
If the state seizes tobacco or motor fuel products under this § 10.1-14C(4), the state shall, before removing the property, leave a written statement on the premises describing the factual circumstances and statutory and/or regulatory basis for the seizure. This statement shall be in addition to any notification required by state law.
D.
Enforcement action against tribal members and tribal entities.
(1)
General. The parties recognize that (i) tax enforcement actions, and (ii) the process of audit, assessment and appeals of tax assessments under this agreement may be affected by jurisdictional issues where a tribal member or tribal entity or property is located within the Tribe's Indian country. The parties intend to avoid such effects by providing in certain instances identified in this agreement for tribal enforcement or joint tribal/state enforcement. For purposes of this § 10.1-14 of this agreement, the terms "tax enforcement action" or "enforcement action" shall refer to the power of the State Treasurer or the Commissioner of Revenue (including his or her successor by law or pursuant to executive or administrative order), as set forth in the Revenue Act, to effectuate subpoenas, execute levies upon tangible personal property, real property or rights in such property, and to execute jeopardy tax assessments/warrants. In addition, these terms shall include the right to inspect tobacco products, to seize contraband tobacco products and related books and records held in violation of the Tobacco Products Tax Act. These terms shall also refer to the enforcement/inspection provisions of the Motor Fuel Tax Act.
(2)
Notice of audit. The state, consistent with state law, shall
have the authority to conduct audits of tribal members residing within
Indian country and tribal entities whose principal place of business
is located within Indian country with respect to taxes that are the
subject of this agreement. Prior to conducting any such audit, the
state shall provide the tribal member or tribal entity with at least
thirty (30) days' advance written notice. The notice shall include
a statement of the business or entity to be audited, the tax(es) involved
in the audit, and the taxable period(s) at issue. Audits of tribal
members who reside outside of Indian country and tribal entities whose
principal place of business is located outside of Indian country shall
be conducted in accordance with state law.
(3)
Enforcement of state judicial orders outside of Indian country.
The state may exercise its enforcement authority under state law with
respect to the property of a tribal member or tribal entity where
the property is located outside of Indian country. Further, the state
may exercise its enforcement authority under state law with respect
to a tribal member or tribal entity whose person is located outside
of Indian country.
(4)
Enforcement of state judicial orders within Indian country.
In any case where the state has obtained a State Court judgment or
order affecting the person or property of a tribal member or tribal
entity located within Indian country, the state may petition the Tribal
Court to grant recognition and enforcement of the State Court order
or judgment. The Tribal Court shall, within fourteen (14) business
days, rule on the petition using the same standards as contained in
Michigan Court Rule 2.615. If the Tribal Court grants the petition,
the Tribe, upon request of the state, shall promptly direct one or
more tribal police or public safety officers to enforce the judgment
or order in the presence of and with the assistance of one or more
state enforcement officers.
(5)
State exercise of nonjudicial enforcement actions outside of
Indian country. The state may exercise its tax enforcement authority
under state law, with respect to the property of a tribal member or
tribal entity where the property is located outside of Indian country.
Further, the state may exercise its tax enforcement authority under
state law with respect to a tribal member or tribal entity located
outside of Indian country.
(6)
State exercise of nonjudicial enforcement actions within Indian
country. In any case where the state is authorized by state law to
compel the production of books and records, to compel the appearance
or testimony of an individual, or to undertake an audit, where the
enforcement action affects a tribal member or tribal entity whose
person or property is located within Indian country and the taxpayer
has failed or refused to comply with the requested state enforcement
action, the state may petition the Tribal Court for an order compelling
compliance with that enforcement action. The Tribal Court shall conduct
a hearing on the petition within ten (10) business days following
service by the state on the taxpayer and shall issue its decision
within fourteen (14) business days of such service on the taxpayer.
If the Tribal Court determines that: (i) the taxpayer is a tribal
member or tribal entity; (ii) the taxpayer and/or property is located
within the Tribe's Indian country; (iii) the proposed state tax
enforcement action pertains to one or more of the taxes that is the
subject of this agreement; and (iv) the proposed state tax enforcement
action is consistent with relevant state law and procedures and with
this agreement, the Tribal Court shall grant the petition and shall
order the taxpayer to comply. In the event that the tribal member
or tribal entity fails or refuses to comply with the Tribal Court
order, the Tribe shall promptly direct one or more tribal police or
public safety officers to enforce the order with the assistance of
one or more state enforcement officers.
(7)
State exercise of nonjudicial enforcement actions where the location of Indian country is in dispute. In any case where the state is authorized by state law to compel the production of books and records, to compel the appearance or testimony of an individual, or to undertake an audit, where the enforcement action affects the person or property of a tribal member or tribal entity and there is disagreement between the Tribe and the state regarding whether the taxpayer or property is located within Indian country, the state may elect to proceed based upon the assumption that the taxpayer or property is within its enforcement authority under state law. If the taxpayer fails or refuses to comply with the requested state enforcement action, and the taxpayer asserts that the taxpayer or property is located within Indian country, and the state and the Tribe stipulate that there is a dispute regarding whether the taxpayer or property is located within Indian country, the state may petition the Tribal Court for an order compelling compliance with the enforcement action. The Tribal Court, for purposes of this agreement only and for no other precedential purpose, shall treat the location of the taxpayer or property as being within Indian country and shall follow the standards and procedures set forth in Subsection D(6) above. In the event that the tribal member or tribal entity fails or refuses to comply with the Tribal Court order, the Tribe shall promptly direct one or more tribal police or public safety officers to enforce the order with the assistance of one or more state enforcement officers.
(8)
State tax enforcement actions outside of Indian country prior
to a hearing. The state may exercise its authority under state law
to seize or inspect property without a prior order or hearing where
the taxpayer is a tribal member or tribal entity whose affected property
is located outside of Indian country.
(9)
State tax enforcement actions within Indian country prior to
a hearing.
(a)
Notwithstanding Subsection D(6) above, in any case where the state is authorized by the Revenue Act, the Tobacco Products Act or the Motor Fuel Tax Act, to seize real or tangible personal property or inspect such property without a prior order or hearing, and where the taxpayer is a tribal member or tribal entity and the property is located within Indian country, the Tribe and the state shall jointly execute such action. In such cases the enforcement action shall be taken without first filing a petition in Tribal Court, provided that the state gives notice of the need for the proposed action by the tribal police or public safety department. Such notice shall specify the grounds for the enforcement action and the appropriate statutory or regulatory authority for such action. Upon receipt of such notice, the tribal police or public safety department shall promptly direct one or more tribal police or public safety officers to execute the enforcement action jointly with one or more state enforcement officers. The affected tribal member or tribal entity may, within seven (7) days following the enforcement action, file a petition in Tribal Court seeking a review of the enforcement action under the standard described in this Subsection D(9)(a). If the Tribal Court determines that;
[1]
The taxpayer is a tribal member or tribal entity;
[2]
The taxpayer and/or property is located within Indian country;
[3]
The state tax enforcement action pertains to one or more of
the taxes that are the subject of this agreement; and
[4]
The state action is in compliance with relevant state law procedures
and this agreement, the Tribal Court shall affirm the enforcement
action.
(b)
The administrative enforcement actions authorized under this Subsection D(9) are:
[1]
Actions in furtherance of a jeopardy assessment. (MCLA § 205.26)
[2]
Inspection of vending machines or places where tobacco products
are sold or stored. (MCLA § 205.426a)
[3]
Seizure of contraband consistent with the Tobacco Products Tax
Act. (MCLA § 205.429)
[4]
Inspections or seizures consistent with this agreement authorized
under the Motor Fuel Tax Act or the Motor Carrier Fuel Tax Act.
(10)
Jurisdiction; state tax enforcement actions prior to a hearing
where the location of Indian country is in dispute.
(a)
In any case where the state proposes to take any authorized enforcement action described in Subsection D(9)(b) above that may affect the person or property of a tribal member or tribal entity and there is disagreement between the Tribe and the state regarding whether the affected person or property is located within or without of Indian country, the state may elect to proceed based upon the assumption that the person or property is within its enforcement authority under state law. If the state knows prior to taking the proposed enforcement action that: (i) the taxpayer is a tribal member or tribal entity, and (ii) there is a dispute between the state and the Tribe as to whether the site of the proposed action is within Indian country, the state shall give notice of the proposed action to the tribal police or public safety department. Such notice shall specify the grounds for the enforcement action and the appropriate statutory or regulatory authority for such action. Upon receipt of such notice, the tribal police or public safety department shall promptly direct one or more tribal police or public safety officers to execute the enforcement action jointly with one or more state enforcement officers.
(b)
If the taxpayer wishes to challenge the state enforcement action on the grounds that it is unlawful under state law, including any modification to state law made under this agreement, and the taxpayer asserts that the taxpayer or property is located within Indian country, and the state and the Tribe stipulate to the Tribal Court that there is a dispute regarding whether the person or property is located within Indian country, the taxpayer may petition the Tribal Court to review the propriety of the enforcement action applying state law, including any modification to state law made under this agreement. The Tribal Court, for purposes of this agreement only and for no other precedential purpose, shall treat the location of the person or property as being within Indian country and shall follow the standards and procedures set forth in Subsection D(9) above. If the Tribal Court determines that the affected person or property is not located within Indian country or is not within the stipulated disputed area, the Tribal Court shall promptly dismiss the action.
(11)
Jurisdiction; final tax assessment issued or refund denied to
a tribal member residing or a tribal entity operating wholly within
Indian country. In any case where the state has issued a final tax
assessment or denied a tax refund to a tribal member residing within
Indian country or to a tribal entity doing business wholly within
Indian country, for a tax imposed upon income, business activity,
transactions or privileges which were realized, occurred or exercised
wholly within Indian country, and the tribal member or tribal entity
wishes to appeal the assessment or denial of refund on the grounds
that it is unlawful under (i) state law, including any modification
to state law made under this agreement, or (ii) the Michigan Constitution,
the U.S. Constitution, or federal law, provided that such claims shall
be limited to those that are not predicated on Indian tribal membership,
the tribal member or tribal entity may appeal the final assessment
or denial of refund to the Tribal Court within thirty-five (35) days
of the issuance of the final assessment or denial of refund. The Tribal
Court shall follow state law relative to the practices and procedures
of a case in the Michigan Court of Claims; provided, however, that
the taxpayer shall not be required to prepay the contested portion
of the tax, penalty or interest prior to filing the appeal. The uncontested
portion of the tax, penalty or interest shall be paid prior to filing
the appeal. The Tribal Court shall make its ruling within one (1)
year of the filing of the appeal.
(12)
Jurisdiction; final tax assessment issued to a tribal member
or a tribal entity or denial of refund where the location of Indian
country is in dispute.
(a)
In any case where the state has issued a final tax assessment or denied a tax refund to a tribal member or to a tribal entity for a tax which the member or entity asserts is imposed upon income, business activity, transactions or privileges which were realized, occurred or exercised wholly within Indian country, and the tribal member or tribal entity wishes to appeal the assessment or denial of refund on the grounds that it is unlawful under (i) state law, including any modification to state law made under this agreement, or (ii) the Michigan Constitution, the U.S. Constitution, or federal law, provided that such claims shall be limited to those that are not predicated on Indian tribal membership, the tribal member or Tribal Entity may appeal the final assessment or denial of refund to the Tribal Court within thirty-five (35) days of the issuance of the final assessment or denial of the refund. If the Tribal Court determines all of the income, business activity, transaction or privilege being taxed was realized, occurred or was exercised wholly within Indian country or the stipulated disputed area, the Tribal Court shall, for purposes of this agreement only and for no other precedential purpose, treat the location of the income, business activity, transaction or privilege as being within Indian country and shall follow the standards and procedures set forth in Subsection D(11) above.
(b)
If the Tribal Court determines that any of the taxes assessed
or refunds denied were for a tax upon income, business activity, transactions
or privileges which were realized, occurred or exercised within the
state but outside of either Indian country or the stipulated disputed
area, the Tribal Court shall promptly dismiss the action. Once such
a dismissal is entered, the tribal member or tribal entity may, consistent
with state law, file a petition with the Michigan Tax Tribunal within
thirty-five (35) days, or a complaint with the Michigan Court of Claims
within ninety (90) days, of the final Tribal Court order of dismissal.
(13)
Jurisdiction; final tax assessment or denial of tax refund to
a resident tribal member or a tribal entity where any portion of the
activity occurs outside of Indian country and outside of a disputed
area. State courts or tribunals will be used for the appeal of any
final tax assessment or denial of tax refund to a resident tribal
member or tribal entity in those instances where any portion of the
income, business activity, transaction, or privilege being taxed was
realized, occurred or was exercised within the state but outside of
either Indian country or any area where the Tribe and the state have
a disagreement as to what constitutes Indian country.
(14)
Application of state law as modified by this agreement. The Tribe and the state agree that state law, as modified by this agreement, will apply to the determination of tax liability or tax refund in any appeal of an assessment or denial of a tax refund filed in any state or tribal quasi-judicial or judicial forum under this § 10.1-14.
E.
Licensure and registration.
(1)
Tribal registration. The Tribe shall comply with state licensure
and registration provisions for the taxes that are the subject of
this agreement. With respect to activity occurring solely within tribal
and trust lands, such licensure and registration shall serve only
to identify tribal operations that are subject to this agreement.
The Tribe shall not be subject to disciplinary action or penalty as
a licensee or be subject to the revocation provisions applicable to
any licensee under any of the taxes that are the subject of this agreement,
except for violations of the Motor Carrier Fuel Tax Act or the International
Fuel Tax Agreement, to the extent not altered by this agreement. Rather,
alleged violations shall be addressed in the dispute resolution process
or through termination of the agreement.
(2)
Licensure and registration of tribal members and tribal entities
outside of Indian country. Tribal members or tribal entities operating
to any extent outside of Indian country shall comply with all state
licensure provisions for the taxes that are the subject of this agreement.
(3)
Licensure and registration of tribal members and tribal entities
operating wholly within Indian country. With respect to tribal members
and tribal entities operating wholly within Indian country, the Tribe
shall either:
(a)
Require such tribal members and tribal entities to register
with the state and obtain such licenses and registrations as would
be required under state law if such tribal members or tribal entities
were operating outside of Indian country; or
(b)
Establish its own licensing and registration requirements (which
shall parallel state law) for all activities authorized under this
agreement requiring a state registration or license under state law
applicable to the taxes that are the subject of this agreement, in
which case the Tribe shall forward the information to the state in
a format mutually agreeable to the state and the Tribe.
F.
Motor Carrier Fuel Tax and International Fuel Tax Agreement. The
Tribe, tribal members and tribal entities engaging in activity that
is covered by the Motor Carrier Fuel Tax Act or the International
Fuel Tax Agreement shall fully comply with all of the provisions of
that Act or Agreement, including registration and licensing requirements
and other obligations imposed by that Act and Agreement.
G.
Responsibilities of the Tribe regarding tribal members and tribal
entities.
(1)
The Tribe shall inform tribal members and tribal entities of
the terms of this agreement, including its administrative and enforcement
provisions. To the extent that this agreement imposes duties or obligations
upon tribal members or tribal entities, the Tribe shall take appropriate
steps under tribal law to require tribal members and tribal entities
to perform those duties or obligations.
(2)
The Tribe agrees to assist the state in ascertaining that tribal
members and tribal entities are fully complying with the terms of
this agreement. Upon request of the state, the Tribe shall assist
the state in the assessment and collection of taxes owed under the
terms of this agreement. In those instances where a question of jurisdiction
arises between the state and a tribal member or tribal entity, and
the Tribe agrees with the state's position, the Tribe shall assist
the court or tribunal hearing the matter by providing affidavits and/or
testimony.
(3)
If the state notifies the Tribe that one of the offenses listed
below has occurred within the Tribe's jurisdiction, the Tribe
shall, within ten (10) business days after notice by the state of
the violation, take the following action: for a first offense, give
a written warning to the offending party that further noncompliance
will result in termination of any tribally issued license or authorization
to operate; for any subsequent offense, commence proceedings to terminate
any tribally issued license or authorization to operate. The offenses
that may trigger the above actions are:
(a)
Possession or sale by a tribal member or tribal entity (other
than those in which the Tribe has an ownership interest) of cigarettes
or other tobacco products which do not bear the appropriate state
stamp.
(b)
Sale by a tribal member or tribal entity (other than those in
which the Tribe has an ownership interest) of cigarettes or other
tobacco products to nontribal members where all taxes are not fully
included in the price.
(c)
Possession or sale by a tribal member or tribal entity (other
than those in which the Tribe has an ownership interest) of motor
fuel not acquired or possessed as provided in this agreement.
(4)
In addition to assisting the state, the Tribe shall enforce
this agreement independently. Such independent enforcement shall include:
(a)
Seizure from tribal members and tribal entities of tobacco products
and motor fuel not acquired or possessed in accordance with the terms
of this agreement and the transfer of the seized product to the state,
consistent with applicable provisions of state law. In the event that
the product seized and transferred to the state is sold in accordance
with state law, the state shall treat the Tribe as a "local unit of
government" for the purpose of sharing the proceeds of the sale, as
provided at MCLA § 205.429 or 207.1130.
(b)
Establishment of tribal mechanisms to monitor and enforce tribal
member and tribal entity compliance with the terms of this agreement;
and
(c)
Notification to the state of any violations of this agreement
that the Tribe may discover.
H.
Tribal verification of state compliance. Upon request by the Tribe,
the state shall, consistent with state law pertaining to confidentiality,
provide access to sufficient information to allow the Tribe to verify
that the state has paid all amounts required by this agreement. Tribal
access to such books, records and personnel shall be preceded by reasonable
notice.
I.
Payment of liabilities. In the event of a disagreement over an amount
owed by either party to the other, the determination of liability
shall be made pursuant to the dispute resolution process in this agreement
and not in any state or tribal tribunal. Each party shall pay all
undisputed amounts before invoking the dispute resolution process.
Once the amount of liability is determined by the dispute resolution
process, each party agrees to voluntarily pay that amount.
A.
Consistent with the government-to-government relationship between the Tribe and the state, the parties shall make their best efforts to resolve disputes by good faith negotiations whenever possible. The provisions of this § 10.1-15 are applicable to disputes between the Tribe and the state and shall not be utilized for resolution of disputes between the state and tribal members or tribal entities.
B.
At any time this agreement is in force, the Tribe or the state may
file a notice with the other party seeking dispute resolution of any
matter arising between the Tribe and the state under this agreement.
(1)
The party seeking dispute resolution shall give written notice
to the other party, stating:
(a)
The nature of the issue, including reference to specific provisions
of the Agreement;
(b)
The amount of money, if any, that is in contest as a result
of the issue;
(c)
A statement of position as to how the issue should be resolved;
(d)
Any additional information or documentation deemed pertinent
or helpful in the resolution of the issue; and
(e)
At least three proposed dates for a meeting not less than ten
(10) business days nor more than twenty (20) business days from the
date of the notice. If the Tribe is the party filing the notice, the
meeting shall be at a location designated by the state. If the state
is the party filing the notice, the meeting shall be at a location
designated by the Tribe.
(2)
The party receiving the notice shall, within ten (10) business
days of receipt, file a written response, indicating which date is
acceptable for a meeting and the precise location at which the meeting
will be held.
(3)
At the meeting, the parties shall attempt to resolve the matter in full to their mutual satisfaction. If the parties are not able to resolve the matter in full, the parties may schedule additional meetings, agree to fact-finding, or take any other mutually agreed to action in an attempt to resolve the matter. Any agreement for further efforts to resolve the dispute shall be in writing and shall provide a date following which either party may seek resolution of the matter by arbitration as provided in § 10.1-15C below.
C.
If the matter in dispute is not resolved at the meeting and no method
for further efforts to resolve the matter is mutually agreed to, or
following the date specified in any written agreement for further
dispute resolution efforts, either party may invoke arbitration, as
follows:
(1)
A party shall send notice to the opposing party of its intention
to have the matter resolved by arbitration. The notice shall name
one or more arbitrators who have agreed to act to resolve the dispute.
The notice shall also indicate which arbitrator the party giving notice
would use if none of those listed are acceptable to the other party
if acting alone. The party receiving notice shall, within ten (10)
business days of receipt, indicate which arbitrator, if any, named
by the party giving notice is acceptable to act alone. If none of
the named arbitrators acting alone are acceptable to the party receiving
notice, then that party shall name a single arbitrator who has agreed
to act to serve on a panel consisting of that person, the arbitrator
named by the party giving notice, and a third arbitrator named by
the other two arbitrators. The two named arbitrators shall act within
ten (10) business days of the naming of the second to name a third
arbitrator.
(2)
The party requesting arbitration shall send copies of any notices
of arbitration to all other tribes that have signed agreements that
are substantially similar to this agreement in addition to the notice
sent to the opposing party. Any tribe receiving such notice may thereafter
elect to participate as a party in the arbitration as set forth below.
(3)
Within five (5) business days of the naming of the arbitrator
or the establishment of the arbitration panel, each original party
shall submit to the arbitrator or panel, as well as to all other tribes
that have signed agreements that are substantially similar to this
agreement, a list of the issues that are being submitted for resolution.
The list shall designate those issues that, in the party's view,
are likely to require interpretation of the terms of the agreement,
including reference to specific provisions of the agreement. Following
these submissions, all parties, including all intervening tribes,
shall have seven (7) business days to comment on the issues proposed
for submission. Within fourteen (14) business days after the time
allowed for comment, the arbitrator or the panel shall advise all
parties of the issues to be addressed and establish a timetable to
resolve those issues within ninety (90) days thereafter. The arbitrator
or panel shall designate which issues are likely to require interpretation
of the terms of the agreement, including reference to specific provisions
of the agreement. The timetable shall provide for discovery, submission
of written argument and other materials and, if requested by either
party, for oral presentation including presentation of witnesses.
Following submission of the materials and argument, the arbitrator
or panel shall, consistent with this agreement, determine and award
taxes due, refunds owed or such other matters as the circumstances
warrant.
(4)
Each party shall bear its own costs incurred in the dispute
resolution. The costs and fees charged by an arbitrator or arbitration
panel shall be borne 1/2 by the state and 1/2 by the Tribe(s).
(5)
Matters of state law that are properly before the arbitrator
or panel shall be resolved by applying state law.
(6)
The award of the arbitrator or panel shall set forth the factual
findings, legal conclusions, and conclusions as to the interpretation
of the terms of the agreement on which it is based. The award shall
be dated and shall be final and binding on the parties with regard
to the dispute that it resolves. In addition, the award shall survive
termination of this agreement.
(7)
The decision of the arbitrator or panel shall designate which
issues require interpretation of the terms of this agreement. The
decision of the arbitrator or panel regarding such issues shall be
binding precedent in all future disputes regarding this agreement
and all agreements with other tribes that are substantially similar
to this agreement. Conclusions as to state law shall not be precedent,
and future arbitrators or panels shall determine such matters based
on applicable state law. Matters resolved by settlement or consent
agreement shall be binding only on the parties to the settlement or
consent agreement.
(8)
In order to serve as an arbitrator under this agreement for the purposes of resolving a dispute under this § 10.1-15, a candidate must be admitted to practice law in the court of highest jurisdiction in any state of the United States or the District of Columbia, shall be a member in good standing of the bar of admission, and shall have experience in taxation or federal Indian law.
(9)
Except as otherwise provided in this § 10.1-15 or mutually agreed by the parties, the arbitration shall proceed in accordance with the policies and procedures of the Commercial Rules of Arbitration of the American Arbitration Association, provided that the arbitration itself shall not be administered by or proceed before the American Arbitration Association.
This agreement shall be for an indefinite term and shall remain
in force and effect until terminated as provided in this section.
A.
Termination without cause. The Tribe or the state, acting through its Treasurer or his or her designee, may terminate this agreement by giving written notice to the other party of its intention to terminate. The notice shall state a termination date, which shall not be sooner than ninety (90) days from the date of the notice and, except as provided in Subsection B, shall not take effect sooner than two (2) years from the effective date of this agreement. The notice of intent to terminate shall indicate at least three proposed dates for a meeting to take place within thirty (30) days commencing with the date of the notice to discuss the reasons for the termination. If the Tribe is the party giving the notice, the meeting shall be at a location designated by the state. If the state is the party giving the notice, the meeting shall be at a location designated by the Tribe. Within five (5) business days of receipt of the notice, the party receiving the notice shall notify the party seeking termination as to which date is acceptable for the meeting and the precise location at which it is to be held.
B.
Termination for cause.
(1)
Notwithstanding the provisions of Subsection A, the following violations of this agreement shall constitute sufficient cause for termination of this agreement at any time:
(a)
Possession or sale by the Tribe, or any entity in which the
Tribe has any ownership interest, of cigarettes or other tobacco products
which do not bear the appropriate state stamp;
(b)
Sale by the Tribe, or any entity in which the Tribe has any
ownership interest, of cigarettes or other tobacco products to nontribal
members where all taxes are not fully included in the price;
(c)
Possession or sale by the Tribe, or any entity in which the
Tribe has any ownership interest, of motor fuel not acquired or possessed
as provided in this agreement;
(d)
Failure of the Tribe to seek licenses or registration as required
under this agreement within ten (10) business days following notice
and request to do so;
(e)
Failure of a party to maintain necessary books and records,
to comply with a request for review of books and records, or to permit
inspections as provided in this agreement;
(f)
Failure of the Tribe to promptly commence or authorize enforcement
action requested by the state as provided by this agreement;
(g)
Failure of the Tribal Court to render a decision on an enforcement
action under § 10.1-14C(4)(b)[1] within the time frame specified
in this agreement;
(h)
Interference by a party with enforcement actions authorized
by this agreement, or failure of a party to follow procedures for
enforcement actions authorized by this agreement; and
(i)
Failure of a party to pay amounts determined to be due under
this agreement within forty-five (45) days of such obligation becoming
final.
(2)
In the event that a party determines that one or more of the events listed in § 10.1-16B(1) has occurred, that party shall request a meeting to be held within five (5) business days of the notice for the purpose of discussing the matter. If the Tribe is the party requesting the meeting, it shall be at a location designated by the state. If the state is the party requesting the meeting, it shall be at a location designated by the Tribe. The request for the meeting shall provide a statement as to the nature of the alleged violation. At the meeting, the parties shall discuss the incident(s) giving rise to the meeting.
(a)
Following the meeting, the party requesting the meeting may:
[1]
Terminate this agreement by giving notice of termination for
cause;
[2]
Defer determination as to whether to seek termination for cause
for a period of time pending such further investigation or consultation
as the party requesting the meeting shall determine appropriate; or
[3]
Waive the breach.
(b)
The party requesting the meeting shall notify the alleged offending
party of its determination.
(3)
In cases where a notice of termination for cause is based on a violation of § 10.1-16B(1)(a), (b), (c), (f), (g), (h) or (i), the party requesting the meeting may terminate this agreement immediately following the meeting, subject to retroactive reinstatement in the event the arbitrator or panel determines that the violation did not occur. All other alleged violations shall, if confirmed by the arbitrator or panel, result in termination as of the date of the arbitration determination. Pending such determination, this agreement shall remain in full force and effect.
(4)
The party alleged to have violated this agreement may, within
five (5) business days of any notice of termination, seek review of
that action in accordance with the following process:
(a)
The party seeking to invoke the process shall, within five (5)
business days of the notice of termination, send a notice of intent
to contest the termination to the other party and shall name one or
more arbitrators who have agreed to act to resolve the dispute. The
notice shall also indicate which arbitrator the party giving notice
would use if none of those listed are acceptable to the other party
if acting alone. The party receiving notice shall, within five (5)
business days of receipt, indicate which arbitrator, if any, named
by the party giving notice is acceptable to act alone. If none of
the arbitrators acting alone are acceptable to the party receiving
notice, then that party shall name a single arbitrator who has agreed
to serve on a panel to consist of that person, the arbitrator named
by the party giving notice, and a third arbitrator named by the other
two arbitrators. The two named arbitrators shall act within ten (10)
business days of the naming of the second to name a third arbitrator.
(b)
Within fourteen (14) business days of the arbitrator being named
or upon the establishment of a panel, the arbitrator or panel shall
establish a timetable to resolve the matter, which shall not exceed
forty-five (45) days from the date the arbitrator is named or the
panel established. The timetable shall provide for discovery, submission
of written argument and other materials and, if requested by either
party, for oral presentation including presentation of witnesses.
Following submission of the materials and argument, the arbitrator
or panel shall make a single factual finding of whether the act alleged
to give rise to a termination for cause has occurred. The determination
of the arbitrator or the panel shall be final and binding on the parties.
(c)
Each party shall bear its own costs incurred in the dispute
resolution. The costs and fees charged by an arbitrator or arbitration
panel shall be borne equally by the parties.
(d)
In order to serve as an arbitrator under this agreement for
purposes of determining if there is a violation sufficient to justify
a termination for cause, candidates must be admitted to practice law
in the court of highest jurisdiction in any state of the United States
or the District of Columbia and shall be a member in good standing
of the bar of admission.
(e)
Except as otherwise provided in this § 10.1-16 or mutually agreed by the parties, the arbitration shall proceed in accordance with the policies and procedures of the Commercial Rules of Arbitration of the American Arbitration Association, provided that the arbitration itself shall not be administered by or proceed before the American Arbitration Association.
(5)
If the alleged offending party does not seek review of the termination
within five (5) business days of the notice, the termination shall
be effective as of the date of the notice.
C.
Final accounting following termination.
(1)
The state and the Tribe agree to pay amounts owed one to the other under the provisions of this agreement, accrued through the termination date. Within ten (10) business days following the termination date, a final accounting shall commence to determine the liabilities of the Tribe and the state, one to the other. The state and the Tribe agree to cooperate in the exchange of information sufficient to determine their respective liabilities. If the parties cannot agree on the amount owed, then either party may by written notice to the other advise of its intent to submit the dispute to arbitration as provided in this § 10.1-16C.
(2)
The notice of arbitration shall name one or more arbitrators
who have agreed to act to resolve the dispute. The notice shall also
indicate which arbitrator the party giving notice would use if none
of those listed are acceptable to the other party if acting alone.
The party receiving notice shall, within ten (10) business days of
receipt, indicate which arbitrator, if any, named by the party giving
notice is acceptable to act alone. If none of the arbitrators named
are acceptable to the party receiving notice, then that party shall
name a single arbitrator who has agreed to act to serve on a panel
to consist of that person, the arbitrator named by the party giving
notice, and a third arbitrator named by the other two arbitrators.
The two named arbitrators shall act within ten (10) business days
of the naming of the second to name a third arbitrator.
(3)
Within five (5) business days of the naming of the arbitrator
or the establishment of the arbitration panel, the parties shall submit
to the arbitrator or panel a list of the issues that are being submitted
for resolution. Following these submissions, the parties shall have
seven (7) business days to comment on the issues proposed for submission.
Within fourteen (14) business days of being named the arbitrator or
the establishment of the arbitration panel, the arbitrator or the
panel shall establish a timetable to resolve the matter, which shall
not exceed ninety (90) days. The timetable shall provide for discovery,
submission of written argument and other materials and, if requested
by either party, for oral presentation including presentation of witnesses.
Following submission of the materials and argument, the arbitrator
or panel shall, consistent with this agreement, determine and award
taxes due or refunds owed, as the circumstances warrant. The award
of the arbitrator or panel shall set forth the factual findings, legal
conclusions, and conclusions as to the interpretation of the terms
of this agreement on which it is based. The monetary award of the
arbitrator or panel shall be dated and shall be final and binding
and shall survive termination of this agreement.
(4)
Each party shall bear its own costs incurred in the dispute
resolution. The costs and fees charged by an arbitrator or arbitration
panel shall be borne equally by the parties.
(5)
In order to serve as an arbitrator under this agreement for
the purpose of making a final accounting following termination, candidates
must be admitted to practice law in the court of highest jurisdiction
in any state of the United States or the District of Columbia, shall
be a member in good standing of the bar of admission, and shall have
experience in taxation or federal Indian law.
(6)
Except as otherwise provided in this § 10.1-16C or mutually agreed by the parties, the arbitration shall proceed in accordance with the policies and procedures of the Commercial Rules of Arbitration of the American Arbitration Association, provided that the arbitration itself shall not be administered by or proceed before the American Arbitration Association.
Nothing in this agreement shall be construed to create any rights in third parties who are not parties to this agreement, or constitute a basis for any third-party challenge or appeal, except as provided in § 10.1-15C(2) with respect to other tribes not parties to this agreement who intervene in dispute resolution under this agreement.
A.
General.
(1)
Except as otherwise expressly provided in this agreement, notice
regarding tax matters arising between the state and tribal members
or the state and tribal entities shall be directed to the member or
entity in accordance with state law.
(2)
Where this agreement provides that a matter is to be resolved
in a state or tribal court or tribunal, the rules and procedures of
the designated court or tribunal shall control all matters of notice
except as otherwise expressly provided in this agreement.
(3)
Where this agreement provides that a specified form be filed
with the state for the purpose of (i) making a remittance to the state
of taxes or fees, or (ii) seeking a refund from the state, then the
form, remittance or refund request shall be filed and sent in accordance
with its instructions.
(4)
Where a notice is to be given under the terms of this agreement, the notice shall be made by personal delivery, overnight courier, or first class, certified or registered mail, unless otherwise specified in this § 10.1-18.
(5)
Where under the terms of this agreement notice is required to
be given to or a request is to be made of the tribal police or public
safety department, such notice or request shall be given by personal
delivery to or by first class mail to Nottawaseppi Huron Band of Potawatomi
Office Public Safety at 2221 1 1/2 Mile Road, Fulton, MI 49052.
B.
Specific notices. All notices and communication between the state
and the Tribe with respect to the following matters shall be sent
to:
[Amended 8-1-2007 by Res. No. 08-01-07-01[1]]
(1)
For the Tribe:
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Chairperson
Nottawaseppi Huron Band of Potawatomi Indians
1485 Mno-Bmadzewen Way
Fulton, MI 49052
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With copy to Tribal General Counsel for the
Nottawaseppi Huron Band of Potawatomi Indians
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(2)
For the state:
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State Treasurer
Michigan Department of Treasury
Attention: Tribal Liaison
430 West Allegan Street
Lansing, MI 48922
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Section 10.1-1E(4): protocol for exchange, retention and destruction of taxpayer information.
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Section 10.1-1F: annual summit.
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Section 10.1-9: general administration; all lists to be sent to state by December 15 of each year.
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Section 10.1-11: administration: motor fuel; all matters except refund requests.
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Section 10.1-12: administration: tobacco products; all matters except refund requests.
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Section 10.1-13: administration: sales tax and use tax; all matters except refund requests.
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Section 10.1-14: enforcement; all matters except notice to tribal police or public safety, written statements under § 10.1-14C(4)(b)[2], and notice of audit to tribal members or tribal entities.
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[1]
Editor's Note: This is the First Amendment to the Tax Agreement.
C.
Where notice not specified. In those instances where a party to this
agreement desires to send a written notice or other written communications
to the other party, and the person or office is not otherwise specified
under this agreement, the notice or communication shall be directed
to:
D.
Change of person or office that is to receive notice. A party to
this agreement may change the person or office to whom a notice is
to be sent under this agreement by directing a notice to that effect
by registered or certified mail with return receipt clearly stating
that a change in person or office to be notified under the terms of
this agreement is intended, providing a reference to the particular
notice provision to be changed, and stating the person or office to
whom the notice is to be sent commencing as of a specific date not
less than fourteen (14) days after the notice of the change. A party
receiving notice of such a change shall confirm by sending an acknowledgment
of the change to the other party by certified or registered mail return
receipt requested.
The terms of this agreement may be amended, to the extent permitted
by law, only upon a mutual, written agreement executed by an authorized
representative of each party.
A.
Effective date. This agreement shall become binding upon the parties
on the date on which the last of the following actions occurs:
(1)
State legislation taking effect that authorizes the Department
to enter into the agreement on behalf of the state;
(2)
Signature by the State Treasurer or his or her designee as authorized
by the state legislation;
(3)
Signature by a representative of the Tribe; and
(4)
Certification by the Tribe's legal counsel that the signatory
acting on behalf of the Tribe has the necessary authority to enter
into this agreement and to bind the Tribe to this agreement.
B.
Implementation date. The terms of this agreement shall be implemented
commencing upon a date agreed to by the Department and the Tribe following
receipt by the Department of certification by the Tribe's legal
counsel that the Tribe has taken all necessary steps to bind tribal
members and tribal entities to the terms of this agreement.
