ITG FAQ #2 Answer - Is the luxury tax on passenger vehicles applicable to Indian tribal governments?

The luxury tax does not apply to the sale of a passenger vehicle for use exclusively in public safety, law enforcement, or public work activities by the federal, state, or local government. IRC Section 7871 treats an Indian tribal government as a state only if, in addition to other requirements applicable to similar transactions involving a State or political subdivision of a State, the transaction involves the exercise of an essential tribal governmental function.

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