To provide incentives for Indian tribes to collect and pay lawfully imposed State sales taxes on goods sold on tribal lands and to provide for penalties against Indian tribes that do not collect and pay such State sales taxes.

Provides that, among Indian tribes competing for Federal grants, priority shall be given to Indian tribes that certify, through a process established by the Secretary of the Interior, that retail establishments operating on trust lands within a tribes's jurisdiction are collecting and paying all qualified State retail taxes.

Sets forth procedures and penalties (including removal of tribal lands from trust status) regarding failure of Indians or Indian tribes to pay qualified State retail taxes on goods sold to nontribal members on tribal lands.