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Federal Tax Provisions for Tribes

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Submitted By EleanorYR
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OVERVIEW OF FEDERAL TAX PROVISIONS AND ANALYSIS OF SELECTED ISSUES RELATING TO NATIVE AMERICAN TRIBES AND THEIR MEMBERS

Scheduled for a Public Hearing Before the SENATE COMMITTEE ON FINANCE on May 15, 2012

Prepared by the Staff of the JOINT COMMITTEE ON TAXATION

May 14, 2012 JCX-40-12

CONTENTS Page INTRODUCTION AND SUMMARY I. 1

GENERAL RULES REGARDING THE TAXATION OF INDIAN TRIBES AND TRIBAL MEMBERS AND THE TAXING POWERS OF INDIAN TRIBES ................. 3 A. Income Taxation of Indian Tribes and Wholly Owned Tribal Corporations................ 3 1. Federal income taxation of Indian tribes and wholly owned tribal corporations ... 3 2. State taxation of Indian tribes ................................................................................. 4 B. Tax Treatment of Enrolled Members of Indian Tribes ................................................. 7 1. Federal tax............................................................................................................... 7 2. State tax................................................................................................................... 7 C. Taxing Powers of Indian Tribes .................................................................................... 9 D. Alaska Native Settlement Trusts................................................................................. 10

II.

SELECTED FEDERAL TAX RULES AND ISSUES RELATING TO INDIAN TRIBES AND THEIR MEMBERS .................................................................................. 12 A. The General Welfare Doctrine .................................................................................... 12 B. Indian Tribal Governments Treated as States for Certain Purposes (sec. 7871) ........ 14 1. In general

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