Motor Vehicle Sales Tax Exemption for Tribal Members

Eligible residents of Minnesota Tribal reservations are exempt from sales tax on motor vehicle purchases. 

Who Qualifies

To qualify for this exemption, the purchaser must provide to the vehicle dealer a signed statement that certifies the following requirements are met. (For joint purchases, all purchasers must meet these requirements.)

1. The purchaser is a member of one of these Tribes and lives on the Tribe’s reservation:
   • Bois Forte
   • Fond du Lac
   • Grand Portage
   • Leech Lake
   • Lower Sioux
   • Mille Lacs
   • Prairie Island Sioux
   • Red Lake
   • Shakopee Mdewakanton Sioux
   • Upper Sioux
   • White Earth
      
2. The sale occurred on the reservation. “Sale” means either:
   • The papers were signed on the reservation
   • Payment was made on the reservation
   • The vehicle was delivered to the buyer on the reservation

Minnesota Chippewa Tribe Members

For purposes of this exemption, a member of one of the six bands of the Minnesota Chippewa Tribe (MCT) is exempt from tax when they live on, and buy the vehicle on, any MCT Reservation. The six bands of the MCT are:

• Bois Forte
• Fond du Lac
• Grand Portage
• Leech Lake
• Mille Lacs
• White Earth

Government Purchases

Minnesota Tribal governments and any businesses owned by the Tribal government may buy or lease vehicles (either on or off the reservation) for their own use, exempt from sales tax.

The applicant indicates “governmental unit” in the sales tax declaration on the state Application to Title and Register a Motor Vehicle. These vehicles display tax-exempt plates.

You can find the application and instructions on the Minnesota Driver & Vehicle Services (DVS) website. Go to the DVS Vehicle Forms page (new window).

Common Scenarios of Motor Vehicle Sales

Here are some common scenarios of motor vehicle sales to band or community members. These examples discuss vehicles registered with the State of Minnesota. They do not apply to any vehicle that is purchased by a member and registered with the Tribal licensing system.

If you have questions, contact the Minnesota Department of Revenue at 651-556-6117 or email localgovernmentservices.mdor@state.mn.us.

Examples

1. A Mille Lacs member buys a passenger vehicle from a dealership located off the Mille Lacs Reservation, and the passenger vehicle is licensed with the state.
   • The passenger vehicle is taxable because the sale took place off the reservation, whether the member lives on or off the reservation.
      
2. A White Earth member buys a passenger vehicle from a dealership located on the White Earth Reservation, and the passenger vehicle is licensed with the state.
   • The passenger vehicle is exempt if the member lives on the reservation.
   • The passenger vehicle is taxable if the member does not live on the reservation.
      
3. A Lower Sioux Community member, who lives off the reservation, buys a passenger vehicle from a dealership located on the Lower Sioux Reservation, and the passenger vehicle is licensed with the state.
   • The passenger vehicle is taxable if the member lives off the reservation.
      
4. An Upper Sioux Community member buys a passenger vehicle from a private party off the Upper Sioux Reservation, and the Tribal member registers the passenger vehicle with the state.
   • When the sale is made off the reservation:
     • The passenger vehicle is taxable because the sale took place off the reservation, whether the member lives on or off the reservation.
        
   • When the sale is made on the reservation:
     • The passenger vehicle is exempt if the member lives on the reservation.
     • The passenger vehicle is taxable if the member lives off the reservation.
        
5. A Bois Forte Band member and non-member (co-purchaser) living on the Bois Forte Reservation jointly buy a passenger vehicle on the Bois Forte Reservation. The passenger vehicle is registered with the state.
   • The passenger vehicle is taxable whether the sale took place on or off the reservation, because one of the co-purchasers is not a Bois Forte Tribal member.
      
6. The Leech Lake Tribal government buys a dump truck for its own use or for a government-owned entity.
   • The motor vehicle is exempt whether it is purchased on or off the Leech Lake Reservation, because the buyer is the Tribal government and not an individual member.
      
7. A Shakopee Mdewakanton Sioux Community member who lives on the Shakopee Mdewakanton Sioux Reservation buys a passenger vehicle on the Prairie Island Reservation and the passenger vehicle is licensed with the state.
   • The passenger vehicle is taxable because the purchase of the vehicle did not occur on the Tribal member’s reservation.
      
8. A Fond du Lac Band member who lives on the Leech Lake Reservation buys a passenger vehicle on the White Earth Reservation, and the passenger vehicle is registered with the state.
   • The passenger vehicle is exempt because the buyer:
     • Is a member of one of the six bands of the Minnesota Chippewa Tribe (MCT).
     • Lives on – and bought the vehicle on – MCT reservations. (They do not have to live and buy on the same MCT reservation for this exemption.)
        
   • Note: Because the Red Lake Band is not part of the Minnesota Chippewa Tribe, the exemption does not apply when:
     • A Red Lake Band member buys a vehicle on an MCT reservation.
     • A member of an MCT band buys a vehicle on the Red Lake Reservation.