Law Article: Internet sales tax bill recognizes tribal authority

The Internet sales tax bill that was recently passed by the Senate includes a provision that would allow tribal governments to require online retailers to collect sales tax on sales to residents of the tribe’s reservation. The same bill would require businesses on Indian reservations to collect tax on sales delivered to customers outside of the reservation.

The bill still needs to pass in the House before the tribes may begin to require online retailers to collect sales taxes and it faces significant political opposition. Tribal governments that impose a sales tax should prepare to meet the requirements of the bill if they want online retailers to collect their tax.

In addition, businesses based on an Indian reservation should also prepare for the possibility that they will need to collect sales tax on deliveries to its customers.