TWO QUESTIONS:
A) How would this Fair Tax affect the native american nations that have set up shop and refuse to pay any state tax?
b)
what would be the definition of New vs. used ie. could a car dealer drive a car around the block and sell it as used?
As with any tax, there will be cheaters. There will also be a lot less enforcement needed. I can't imagine Wal-Mart trying to cheat and risking the sanction.
You asked about native americans.. anyone born in this hemisphere is a native american... ergo, I am a native American. But if you mean the American Indian nations, I assume their sovereignty still trumps fed law.
The Fair Tax does not affect state taxes at all.
b) what would be the definition of New vs. used ie. could a car dealer drive a car around the block and sell it as used?
As with any taxation abuses may occur. While it is proposed that the IRS be abolished there would necessarily be an enforcement arm of the new entity. Such an overt abuse as driving a car around the block and selling it as used would and should be actionable, IMHO.
Sure they coould but Why would they? At that point they would render themselves as the end purchaser of the NEW car and be the one responsible for the tax...