Sales Tax State Activity Update - April 2004

Taxability of Shipments to Indian Reservations Discussed in California

The California Board of Equalization has released a tax information bulletin discussing exempt shipments to Indian purchasers on reservations. According to the bulletin, taxpayers shipping tangible personal property by mail or common carrier to an Indian purchaser on an Indian reservation must specify the delivery terms to be “F.O.B. Reservation” on the shipping documents.

Shipments to an Indian customer on an Indian reservation are not automatically exempt from the state’s sales and use tax and certain conditions must be met for the exemption to be valid.

• The purchaser should reside on a reservation.
• The property must be delivered to the purchaser on the reservation.
• The sale of the property occurs on the reservation.

The complete details are available at: http://www.boe.ca.gov/news/pdf/Mar04TIB.pdf

(California BOE Tax Information Bulletin, {Regulation 1616} March 2004 Issue) 04/04

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