Notice to Auto Dealers to Provide Guidance on the Tribal Exemption

Issued: April 30, 2026

This notice provides guidance regarding the exemption available to certain Indian Tribes, located in Michigan, and their Michigan members ("tribal exemption"), from Michigan's sales tax on the purchase of a motor vehicle. A full list of Michigan tribes can be found at the Tax Information for Native American's page which can be found at https://www.michigan.gov/taxes/tribes.

There is no statutory tribal exemption. Treasury never expects a vehicle dealer to determine for itself whether a purchaser's affiliation, heritage, or ancestry qualifies that purchaser for an exemption from Michigan's sales tax.

Instead, a tribal exemption is available in two circumstances:

1. Where a tribe does not have a tax agreement with Treasury, Treasury provides the vehicle dealer with an exemption letter identifying the purchaser's name and the vehicle's VIN. If applicable, the letter might state an exemption percentage. The tribe or tribal member, as applicable, requests this letter from Treasury. At present, those tribes without an agreement are Keweenaw Bay Indian Community and Lac Vieux Desert Band of Lake Superior Chippewa Indians.

2. Where a tribe has a tax agreement with Treasury, the purchaser (either the tribe or the tribal member) must provide the vehicle dealer with two documents:

a. Form 3998, Tribal Certificate of Exemption for Sales and Use Tax, issued by an Indian tribe identifying the purchaser's name and the vehicle's VIN. Generally, this form supports a full exemption, but there is a checkbox at the top of page 1, which when checked indicates that only a 50% exemption is available to the purchaser.

Dealers are responsible for reviewing the completed Form 3998 to ensure all of the following:

(1) The entire form (Parts 1-4) is complete.

(2) The bearer of the form is the person listed in Part 1.

(3) The bearer's tribal membership card matches the tribe listed in Part 2.

(4) The dealer is the entity listed in Part 3.

(5) The vehicle to be sold is listed in Part 4.

(6) The "certification" at the end is complete and signed.

Generally, if multiple people wish to be listed on the title, each person must have a Form 3998 bearing that person's name in Part 1.

However, the exemption is available where a second person is listed on the title, even without a separate Form 3998 in either of the following scenarios:

• the second person is the spouse of the person claiming the exemption; or
• the second person is the parent of the person claiming the exemption and the person claiming the exemption is under 18 years of age.

b. A "letter of authorization," for the current year, issued by Treasury to the Indian tribe selected in Part 2 of Form 3998.

Currently there are ten tribes that have a tax agreement with the Department of Treasury. Those tribes are:

• Bay Mills Indian Community
• Grand Traverse Band of Ottawa and Chippewa Indians
• Hannahville Indian Community
• Little River Band of Ottawa Indians
• Little Traverse Bay Bands of Odawa Indians
• Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians
• Nottawaseppi Huron Band of Potawatomi Indians
• Pokagon Band of Potawatomi Indians
• Saginaw Chippewa Indian Tribe of Michigan
• Sault Ste. Marie Tribe of Chippewa Indians

The vehicle dealer should maintain the exemption documents for a minimum of five years. Dealers are not required to validate eligibility for exemptions if they receive the completed requisite document(s). Copies of the required documents discussed above must be submitted to the Secretary of State along with the application for title.

If you have a question about a tribal exemption please contact Treasury's Tribal Affairs team at [email protected] or 517-241-2185.