California Indians Win Tax Case

LOS ANGELES -- Indian tribes in California do not have to collect state and local sales taxes on restaurant purchases, the state Board of Equalization has ruled, settling a long-standing dispute.

The taxes average 7.9 percent statewide and collections in tribal restaurants could have amounted to an estimated $16 million annually on sales of about $200 million, the Associated Press reported.

However, most of the 109 recognized tribes in the state cite their status as sovereign entities and refuse to collect them, and the tribes and the state have sued each other over the issue. The elected board members voted unanimously in Sacramento last week to stop trying to collect the taxes.

The decision does not mean that patrons will cease paying taxes on food and drinks. Several tribes impose taxes that are equivalent to state and local sales taxes, the report said.