WASHINGTON — With tribal leaders in attendance Monday afternoon at a meeting of the Treasury Tribal Advisory Committee (9TTAC), the U.S. Department of the Treasury and the Internal Revenue Service announced the finalization of two long-awaited tribal tax regulations.
The regulations are intended to provide clarity, reduce regulatory burdens and support the growth of tribal governments, businesses and families.
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The first regulation implements the Tribal General Welfare Exclusion Act of 2014, confirming that tribes may provide certain forms of assistance to tribal citizens without those benefits being subject to federal income tax. The rule applies to programs such as housing assistance, mortgage support and grants for small-business development, and allows tribes broad discretion to determine community needs.
The second regulation addresses the tax treatment of business entities wholly owned by tribes and chartered under tribal law. The Treasury Department confirmed that those entities will be treated as part of the tribal government — similar to state and local governments — and therefore are not subject to federal income tax.
TTAC meeting with tribal leaders and Treasury and IRS officials.
For more than three decades, tribal businesses have operated under tax uncertainty that limited access to capital and investment, officials said. Tribal enterprises often generate the revenue used to fund government services and employ thousands of workers in both tribal and surrounding non-tribal communities.
“Treasury took an important step today toward achieving common-sense tax administration,” U.S. Treasurer Brandon Beach said. “The prior uncertainty created a significant barrier to economic development and impaired the ability to generate revenues for the programs and services tribes provide to their citizens. Tribes can now focus on growth rather than guessing the cost of financing.”
TTAC Chairman W. Ron Allen, CEO of the Jamestown S’Klallam Tribe, said tribes had sought clarity on general welfare benefits for more than a decade and on the tax status of tribal businesses for roughly 30 years.
“This is an important and positive step with these regulations. It not only helps us provide the clarity of the programs that we put together that serve our citizens, it helps us with our charter corporations, moving our economic development arms towards the goal and the vision of self-reliance,” Allen said.
“These regulations will help us to be less dependent on the federal government, less dependent on governmental sources and resources, so that we can build up our capacity to fulfill the many unmet needs, our cultures, our traditions, our programs, and our services that we manage as governments,” Allen continued.
Allen said substantial tribal consultation helped bring the two regulations to completion.
Treasury officials said the final regulations reflect extensive tribal consultation and are intended to support long-term economic growth and self-governance in Indian Country.
Members of the Coalition of Large Tribes (COLT) were present for the announcement. The organization helped push the regulations to final approval, according to O.J. Semans, COLT’s executive director. Semans called the changes a historic win for tribal nations that affirms tribal sovereignty and self-governance.
“Wopida (thank you) to everyone who worked to make this possible and who held this administration accountable to its responsibilities,” Semans said.
“I want to thank past tribal leaders who have put a lot of hours into this effort and current leadership…everybody that played a part in getting these most important rules across the finish line,” W. Garrett Renville, president of COLT and chairman of Sisseton-Wahpeton Oyate, said. “I want to thank our federal partners for recognizing the challenges and opportunities now available to Indian Country.”
