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New York, the Oneida Nation, and Sales Tax

  • Feb 5, 2015 | Gail Cole

 The Oneida Nation and New York State sign agreement impacting business taxes.

The Oneida Indian Nation in 2013 signed an agreement with the State of New York, officially ending the legal disputes over land, taxes, and gaming that have long plagued the two governments. Under the agreement, the Nation is able to officially "reacquire more than 25,000 of its ancestral homelands."

According to the Oneida Nation, the 2013 pact “aligns the interests of all of the parties and makes us partners together in the shared success of our community.” The agreement strengthens the financial stability of the Nation, “creating a system for revenue sharing” between the two parties. For example, the Nation gains exclusive gaming rights in ten counties in the central part of the state and promises to invest a portion of gaming revenue in surrounding counties and the state.

The Oneida Nation also agrees “to impose the same or greater tax rates to goods as the surrounding communities, and to continue investing those sovereign tax revenues in education, health care and other public services.” Which leads us to a Notice to Businesses Operating on Oneida Nation Land, recently published by the New York State Department of Taxation and Finance. It reads, in relevant part:

“Pursuant to the Settlement Agreement, Oneida Nation excise, fuel, sales, use and occupancy taxes, and Nation-imposed minimum cigarette pricing, apply to the sale of cigarettes, fuel, goods, services or occupancy on Nation Land in lieu of the corresponding State or local excise, fuel, sales, use, occupancy or bed taxes, on the same terms and subject to the same definitions and exemptions as such State and/or local taxes.”

In other words, for businesses operating on Oneida Nation land, ”compliance with Nation tax requirements generally will fulfill their obligations for the corresponding State and local taxes for any transactions taking place on Nation Land.”

Since the Nation reacquires additional land under the agreement, some businesses may find themselves no longer on State land. Those with additional locations in other parts of New York State must register with the Oneida Nation and remain registered with the state and comply with state and local tax requirements. However, any business that operates exclusively on Oneida Nation land is no longer required to register with the Department of Taxation and Finance as a sales tax vendor.

Any business that decides to discontinue its relationship with the State must make it official “by filing a final sales tax return and surrendering or destroying its Certificate of Authority to formally close out its New York State sales tax account.” Businesses that fail to do so must continue to file sales tax returns, even when no sales have occurred that are subject to New York State and local sales tax. Those that do not may be subject to penalties.

As always, businesses both on and off of Nation land should keep detailed records of every transaction. “Keeping good records of business operations will help to document compliance with Nation and New York State tax obligations and requirements.”

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.