§7873 Income Derived by Indians From Exercise of Fishing Rights

Summary

Money earned from a tribe’s fishing activities is not subject to federal income or self-employment tax when it is earned by a tribe member (directly or through a qualified Indian business) or by a qualified Indian business itself. Also, federal employment taxes do not apply to pay for work done in those fishing activities when a tribe member works for another tribe member or for a qualified Indian business. Fishing rights-related activity: work directly tied to harvesting, processing, transporting, or selling fish taken under a tribe’s fishing rights, when most of the harvesting was done by tribe members. Recognized fishing rights: fishing rights the tribe had by treaty, Executive order, or Act of Congress as of March 17, 1988. Qualified Indian entity: a business that does the tribe’s fishing work; whose ownership is entirely by qualified tribes, their members, or spouses; if it does substantial processing or transporting then 90 percent or more of its yearly sales must come from such tribal fishing activities of one or more tribes that each own at least 10 percent; and whose management is mostly done by tribe members. Payments from a qualified entity to a tribe member count as fishing income to the extent they come from the entity’s fishing income. If only a very small part would not qualify, the whole amount is treated as qualifying.