§7873 — Title 26 Internal Revenue Code | U.S. Code

Summary

Income from certain tribal fishing activities is not taxed under subtitle A, and pay for fishing-rights work done by one tribe member for another member or for a qualifying tribal business is not taxed under subtitle C. Key terms in one line each: "fishing rights-related activity" means work tied to harvesting, processing, transporting, or selling fish taken under a tribe’s recognized fishing right, only if nearly all harvesting was done by tribe members. "recognized fishing rights" are fishing rights secured by March 17, 1988, by treaty, Executive order, or Act of Congress. "qualified Indian entity" is a business that does tribe fishing work, is owned only by qualified tribes, tribe members, or their spouses, gets 90%+ of its receipts from fishing-related activities of one or more qualified tribes that each own at least 10% of the business if it does substantial processing or transporting, and is managed mostly by tribe members. Money paid out from such an entity to a tribe member counts as that member’s fishing-related income to the extent it comes from the entity’s fishing activity.

Title 26, §7873

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(a)(1)No tax shall be imposed by subtitle A on income derived—

(A)by a member of an Indian tribe directly or through a qualified Indian entity, or

(B)by a qualified Indian entity,

(2)No tax shall be imposed by subtitle C on remuneration paid for services performed in a fishing rights-related activity of an Indian tribe by a member of such tribe for another member of such tribe or for a qualified Indian entity.

(b)For purposes of this section—

(1)The term “fishing rights-related activity” means, with respect to an Indian tribe, any activity directly related to harvesting, processing, or transporting fish harvested in the exercise of a recognized fishing right of such tribe or to selling such fish but only if substantially all of such harvesting was performed by members of such tribe.

(2)The term “recognized fishing rights” means, with respect to an Indian tribe, fishing rights secured as of March 17, 1988, by a treaty between such tribe and the United States or by an Executive order or an Act of Congress.

(3)(A)The term “qualified Indian entity” means, with respect to an Indian tribe, any entity if—

(i)such entity is engaged in a fishing rights-related activity of such tribe,

(ii)all of the equity interests in the entity are owned by qualified Indian tribes, members of such tribes, or their spouses,

(iii)except as provided in regulations, in the case of an entity which engages to any extent in any substantial processing or transporting of fish, 90 percent or more of the annual gross receipts of the entity is derived from fishing rights-related activities of one or more qualified Indian tribes each of which owns at least 10 percent of the equity interests in the entity, and

(iv)substantially all of the management functions of the entity are performed by members of qualified Indian tribes.

(B)For purposes of subparagraph (A), an Indian tribe is a qualified Indian tribe with respect to an entity if such entity is engaged in a fishing rights-related activity of such tribe.

(c)(1)For purposes of this section, any distribution with respect to an equity interest in a qualified Indian entity of an Indian tribe to a member of such tribe shall be treated as derived by such member from a fishing rights-related activity of such tribe to the extent such distribution is attributable to income derived by such entity from a fishing rights-related activity of such tribe.

(2)If, but for this paragraph, all but a de minimis amount—

(A)derived by a qualified Indian tribal entity, or by an individual through such an entity, is entitled to the benefits of paragraph (1) of subsection (a), or

(B)paid to an individual for services is entitled to the benefits of paragraph (2) of subsection (a),

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 100–647, title III, § 3044, Nov. 10, 1988, 102 Stat. 3642, provided that: “(a)

Effective Date

.—The

Amendments

made by this subtitle [subtitle E (§§ 3041–3044) of title III of Pub. L. 100–647, enacting this section and amending section 1402 and 3121 of this title, section 71 of Title 25, Indians, and section 409 and 411 of Title 42, The Public Health and Welfare] shall apply to all periods beginning before, on, or after the date of the enactment of this Act [Nov. 10, 1988]. “(b) No Inference Created.—Nothing in the

Amendments

made by this subtitle shall create any inference as to the existence or non-existence or scope of any exemption from tax for income derived from fishing rights secured as of March 17, 1988, by any treaty, law, or Executive Order.”

§7873 Income Derived by Indians From Exercise of Fishing Rights

Summary

Title 26, §7873

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Amendments

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