Nottawaseppi Huron Band of the Potawatomi, MI Article II Application of Tribal-State Tax Agreement

§ 10.2-2 Binding effect of Tribal-State Tax Agreement.

The Tribal-State Tax Agreement is binding on the Tribe, all tribal members and tribal entities with respect to the covered taxes. All tribal officials, tribal members and tribal entities shall comply with the terms of this Act and the Tribal-State Tax Agreement. [§ 10.1-1A; T-STA § 1.1.A]

§ 10.2-3 Sales and use tax.

A. Subject to compliance with certain administrative terms and conditions, the Tribal-State Tax Agreement [§ 10.1-3A; T-STA § III.A] provides that the following transactions are exempt from state sales and use tax:

(1) Purchases of tangible personal property by the Tribe, a tribal entity or resident tribal member if the purchase takes place and the property is used by it, him or her exclusively within the tribal and trust lands ("TT&L purchases") [§ 10.1-3A(1)(a); T-STA § III.A.1.a];

(2) Purchases by the Tribe of tangible personal property that is primarily used (95% or more) in performing a governmental function if the purchase takes place within the Agreement Area, regardless of where the tangible personal property is used ("governmental function purchases") [§ 10-1.3A(1)(b); T-STA § III.A.1.b];

(3) Purchases of vans and buses by the Tribe for use in transporting passengers to and from a tribal gaming facility if used exclusively within the Agreement Area or within a twenty-five-mile radius of a tribal gaming facility, provided that occasional use (5% or less) for other governmental functions is permitted ("gaming van and bus purchases") [§ 10.1-3A(1)(d); T-STA § III.A.1.d];

(4) Purchases by a resident tribal member of tangible personal property for personal use if the purchase takes place and the property is used exclusively within the Agreement Area ("miscellaneous RTM personal use purchases"); provided that resident tribal members may claim the benefit of this exemption [other than for purchases also described in Subsections A(5) through (8) below], only through:

(a) Purchase within the Agreement Area from a tribal enterprise, tribal member or tribal entity retailer [§ 10.1-13A(1); T-STA § XII.A.1]; or

(b) Through the Refund Table prescribed by the state [§ 10.1-13C(3); T-STA § XII.C.3]. (The Refund Table estimates the tax and miscellaneous personal use purchases and may not provide to the resident tribal member the full tax refund theoretically due on such purchases during any tax year.) [§ 10.1-3A(2)(b); T-STA § IIIA.2.b];

(5) Purchases of the following items by resident tribal members, regardless of where purchased or used, for noncommercial, personal use, if principally garaged, berthed, or stored within the Agreement Area:

(a) Passenger vehicles, including automobiles, pickup trucks, recreational vehicles and motorcycles;

(b) Recreational watercraft;

(c) Snowmobiles; and

(d) Off-road vehicles ("RTM vehicle purchases") [§ 10.1-3(2)(c); T-STA § III.A.2.c];

(6) Purchases by resident tribal members of modular homes and mobile homes used as their principal residence ("RTM modular and mobile home purchases") [§ 10.1-3A(2)(d); T-STA § III.A.2.d];

(7) Materials purchased by a contractor in the performance of a contract with the resident tribal member, Tribe, or tribal entity for construction, renovation or improvement of real property located within the tribal and trust lands if there is no contractual entitlement for a nonresident tribal member or nontribal entity to remove the improvement ("TTL contractor material purchases") [§ 10.1-3A(3)(a); T-STA § III.A.3.a];

(8) Materials purchased by a contractor in the performance of a contract for construction, renovation or improvement to the principal residence of a resident tribal member ("RTM personal residence contractor materials") [§ 10.1-3A(3)(b); T-STA § III.A.3.b];

(9) Rental rooms owned by the Tribe (i) within tribal and trust lands and (ii) within a one-quarter-mile radius of a tribal gaming facility are exempt from the lodging use tax [§ 10.1-3A(5); T-STA § III.A.5];

(10) Restaurant food and beverage sales at casino operations within the tribal and trust lands are exempt from both the sales tax and use tax [§ 10.1-3A(6); T-STA § III.A.6];

(11) Sales of electricity, natural gas or artificial gas, home heating fuel are exempt from both the sales and use tax if delivered to: (i) tribal and trust lands occupied by the Tribe, a tribal entity or a tribal member; (ii) land occupied by the Tribe within the Agreement Area to perform a governmental function; or (iii) a resident tribal member's principal residence [§ 10.1-3A(7); T-STA § III.A.7];

(12) Telephone (intrastate and interstate), telegraph leased wire, Internet, cable, and other similar communications paid for by the Tribe, a tribal entity, or resident tribal member are exempt from both the sales and use tax if rendered to: (i) tribal and trust lands occupied by the Tribe, a tribal entity or a tribal member; (ii) land occupied by the Tribe within the Agreement Area to perform a governmental function; or (iii) a resident tribal member's principal residence [§ 10.1-3A(7); T-STA § III.A.7].

B. For purposes of applying the foregoing sales and use tax exemptions, the location of the purchase is determined by the Streamline Sales Tax Project Rules followed by the State. [§ 10.1-3A(8); T-STA § III.A.8] Those rules generally provide:

(1) When a product is received by the purchaser at a business location of the seller, the purchase is deemed to occur at that location; and

(2) When a product is delivered to the purchaser by the seller or common carrier contracted by the seller, at the point of delivery to purchaser.

C. The exemptions in Subsection A(5), (6) and (8) shall apply in full to purchases by a resident tribal member where the items are purchased by a resident tribal member, or a group of tribal members, and titled in the name of an individual resident tribal member who was part of the purchase, or in the names of the group of resident tribal members who made the purchase. A resident tribal member shall qualify for a 50% 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. [§ 10.1-3A(2)(e); T-STA § III.A.2.e]

§ 10.2-4 Sales tax sharing.

State sales tax or use tax collected and remitted to the state by the Tribe. Tribal member and tribal entity retailers on all taxable sales within the tribal and trust lands, in accordance with this Act and the Tribal-State Tax Agreement, shall be shared between the Tribe and state as follows:

A. On the first $5,000,000 of annual gross receipts from taxable sales to nonresident tribal members, 2/3 of the tax collected shall be paid to the Tribe and 1/3 to the state.

B. On annual gross receipts from taxable sales to nonresident tribal members in excess of $5,000,000, 1/2 of the tax collected shall be paid to the Tribe and 1/2 to the state. [§ 10.1-3B; T-STA § III.B]

§ 10.2-5 Individual income tax.

Resident tribal members are exempt from state income tax on (a) all nonbusiness income, and (b) on business income apportioned to tribal and trust land under § 10.1-4A(2) (T-STA § IV.B). Spouses who are not resident tribal members are subject to the state income tax. [§ 10.1-4A(4); T-STA § IV.D]

§ 10.2-6 Single business tax.

Business entities which are partially or wholly owned by any combination of the Tribe, tribal members or tribal entities are exempt from single business tax, to the extent of the percentage ownership of such persons and entities, on the business entity's tax base apportioned to the Agreement Area of the Tribe and of any other tribes having an agreement with the state similar to the Tribal-State Tax Agreement. [§ 10.1-7; T-STA § VII] This exemption does not apply to publicly traded business entities. [§ 10.1-7B; T-STA § VII.B]

§ 10.2-7 Motor fuels tax.

The Tribe may purchase a quantity of tax-exempt motor fuel pursuant to the Tribal-State Tax Agreement for use by it and its tribal members and tribal entities. [§ 10-1.5; T-STA § V] The Tribal Council shall determine how to allocate the right to purchase tax-free motor fuels among the Tribe, tribal members and tribal entities in accordance with this Act.

§ 10.2-8 Tobacco products.

The Tribe may purchase a quantity of tax-exempt tobacco products pursuant to the Tribal-State Tax Agreement. [§ 10.1-6; T-STA § VI] The Tribal Council shall determine how to allocate the right to purchase tax-free tobacco products among the Tribe, tribal members and tribal entities in accordance with this Act.