A. The sales and use tax applies to the purchase of all property used in the construction or improvement of real property held in trust by the United States for the benefit of the Nation. In cases where the Nation or any agency or entity of the Nation enters into a contract for the construction or improvement of the Nation’s trust property, the Nation is deemed to be the purchaser of all property used therein, including but not limited to construction supplies and materials. Any contractor hired by the Osage Nation who purchases or requires the purchase of property for use in an Osage Nation construction project is deemed to be an agent of the Osage Nation and shall execute the appropriate agency agreement or other documents required by the Tax Commission necessary to ensure that the Osage Nation is the purchaser for tax purposes of any property used for the Nation construction project. Contractors shall require all their subcontractors’ materialmen and suppliers to comply with the provisions of this section as if they themselves were contractors for the Osage Nation. The Osage Tax Commission shall adopt such rules as are necessary to ensure that property purchased for use in Osage Nation construction projects is purchased free of state or local sales taxes, and subject only to the Osage Nation sales and use tax.

B. To ensure that all Osage Nation contractors comply with the provisions of this section, the Osage Nation may require the following clause, or contract provisions consistent with the requirements of subsection (A) of this section, to be included in any contract for the construction or improvement of the Nation’s or its members’ trust property, including contracts to which any agency or entity of the Osage Nation is a party:

NEW CONTRACT CLAUSE:

[NAME OF CONTRACTOR] shall pay the Osage Nation sales and use tax for all property, including but not limited to parts, supplies, and materials purchased under this contract for use on the Nation’s trust property. In order to ensure that no state, county or city tax is imposed on such purchases, [NAME OF CONTRACTOR] shall purchase all such property in the name of and as an agent of the Osage Nation, and shall add to the purchase price the Osage sales and use tax, and report and pay the tax to the Tax Commission pursuant to Chapter 3 of the Osage Nation Revenue and Taxation Act. If it fails to arrange such purchase, [NAME OF CONTRACTOR] shall remain liable for the Osage Nation tax, and shall obtain a state refund of any taxes it wrongfully paid to the state or any subdivision of the state. [NAME OF CONTRACTOR] shall ensure that all subcontractors and material suppliers it employs are subject to the same obligations to collect and pay the Osage Nation sales and use tax. To ensure that each subcontractor hired pursuant to this Contract meets these same obligations, [NAME OF CONTRACTOR] shall:

1. Notify each subcontractor or supplier it hires pursuant to this contract in writing, prior to or simultaneously with the signing of the subcontract or purchase order, of the subcontractor’s or supplier’s obligations to (1) make all purchases in the name of the Osage Nation or as an agent of the Osage Nation exempt from state and local sales taxes, and (2) pay the Osage Nation sales and use tax instead of the state and local sales and use tax.

2. Compile a list of the subcontractors and suppliers it anticipates hiring pursuant to this contract and furnish the list to the Osage Tax Commission within ten (10) days after this contract becomes final. The list will (1) include the name and address of each subcontractor the general contractor has hired or anticipates hiring, (2) describe the subcontractor or supplier’s obligations, and (3) estimate the types and quantities of materials the subcontractor is expected to purchase. [NAME OF CONTRACTOR] shall amend the list if and when any new subcontractors or suppliers are hired. [NAME OF CONTRACTOR] shall mail the list and amendments to:

Osage Tax Commission, Pawhuska, OK 74056

3. Use its best efforts in good faith to ensure that the intent of this clause is met, i.e., to ensure the collection of the Osage Nation sales and use tax for all parts, supplies, and materials purchased under this contract.