SAN FRANCISCO (CN) – The Barona Indian tribe in California cannot receive a sales-tax exemption when non-Indians deliver construction materials to its land, the 9th Circuit ruled.
The Barona Indians expanded their San Diego County casino in 2001. The construction contract called for deliveries to take place on tribal land in order to save money on sales tax.
“The sale is not complete … until delivery is accepted by the buyer on the Barona Indian Reservation,” the contract stated in bold capital letters.
Helix Electric performed almost $4 million worth of electrical work on the casino expansion without paying sales tax on the materials.
Judge Wardlaw ruled that the sales-tax exemption does not apply when a non-Indian contractor buys construction materials from a non-Indian vendor. The subcontractor cannot be designated as a tribal “purchasing agent.”
“The parties may not alter the economic reality of a transaction,” Wardlaw wrote, “to reap a windfall at the public’s expense.”