26 USC 7871 - Indian tribal governments treated as States for certain purposes

U.S Code last checked for updates: Apr 27, 2024

§ 7871.

Indian tribal governments treated as States for certain purposes

(a)

General rule

An Indian tribal government shall be treated as a State—

(1)

for purposes of determining whether and in what amount any contribution or transfer to or for the use of such government (or a political subdivision thereof) is deductible under—

(A)

section 170 (relating to income tax deduction for charitable, etc., contributions and gifts),

(B)

sections 2055 and 2106(a)(2) (relating to estate tax deduction for transfers of public, charitable, and religious uses), or

(C)

section 2522 (relating to gift tax deduction for charitable and similar gifts);

(2)

subject to subsection (b), for purposes of any exemption from, credit or refund of, or payment with respect to, an excise tax imposed by—

(A)

chapter 31 (relating to tax on special fuels),

(B)

chapter 32 (relating to manufacturers excise taxes),

(C)

subchapter B of chapter 33 (relating to communications excise tax), or

(D)

subchapter D of chapter 36 (relating to tax on use of certain highway vehicles);

(3)

for purposes of section 164 (relating to deduction for taxes);

(4)

subject to subsection (c), for purposes of section 103 (relating to State and local bonds);

(5)

for purposes of section 511(a)(2)(B) (relating to the taxation of colleges and universities which are agencies or instrumentalities of governments or their political subdivisions);

(6)

for purposes of—

(A)

section 105(e) (relating to accident and health plans),

(B)

section 403(b)(1)(A)(ii) (relating to the taxation of contributions of certain employers for employee annuities), and

(C)

section 454(b)(2) (relating to discount obligations); and

(7)

for purposes of—

(A)

chapter 41 (relating to tax on excess expenditures to influence legislation), and

(B)

subchapter A of chapter 42 (relating to private foundations).

(b)

Additional requirements for excise tax exemptions

(c)

Additional requirements for tax-exempt bonds

(1)

In general

(2)

No exemption for private activity bonds

(3)

Exception for certain private activity bonds

(A)

In general

In the case of an obligation to which this paragraph applies—

(i)

paragraph (2) shall not apply,

(ii)

such obligation shall be treated for purposes of this title as a qualified small issue bond, and

(iii)

section 146 shall not apply.

(B)

Obligations to which paragraph applies

This paragraph shall apply to any obligation issued as part of an issue if—

(i)

95 percent or more of the net proceeds of the issue are to be used for the acquisition, construction, reconstruction, or improvement of property which is of a character subject to the allowance for depreciation and which is part of a manufacturing facility (as defined in section 144(a)(12)(C)),

(ii)

such issue is issued by an Indian tribal government or a subdivision thereof,

(iii)

95 percent or more of the net proceeds of the issue are to be used to finance property which—

(I)

is to be located on land which, throughout the 5-year period ending on the date of issuance of such issue, is part of the qualified Indian lands of the issuer, and

(II)

is to be owned and operated by such issuer,

(iv)

such obligation would not be a private activity bond without regard to subparagraph (C),

(v)

it is reasonably expected (at the time of issuance of the issue) that the employment requirement of subparagraph (D)(i) will be met with respect to the facility to be financed by the net proceeds of the issue, and

(vi)

no principal user of such facility will be a person (or group of persons) described in section 144(a)(6)(B).

For purposes of clause (iii), section 150(a)(5) shall apply.

(C)

Private activity bond rules to apply

(D)

Employment requirements

(i)

In general

(ii)

Failure to meet requirements

(I)

In general

(II)

Exception

(iii)

Testing period

(E)

Definitions

For purposes of this paragraph—

(i)

Qualified Indian lands

(ii)

Indian tribe

(iii)

Net proceeds

(d)

Treatment of subdivisions of Indian tribal governments as political subdivisions

(e)

Essential governmental function

(f)

Tribal economic development bonds

(1)

Allocation of limitation

(A)

In general

(B)

National limitation

(2)

Bonds treated as exempt from tax

In the case of a tribal economic development bond—

(A)

notwithstanding subsection (c), such bond shall be treated for purposes of this title in the same manner as if such bond were issued by a State,

(B)

the Indian tribal government issuing such bond and any instrumentality of such Indian tribal government shall be treated as a State for purposes of section 141, and

(C)

section 146 shall not apply.

(3)

Tribal economic development bond

(A)

In general

For purposes of this section, the term “tribal economic development bond” means any bond issued by an Indian tribal government—

(i)

the interest on which would be exempt from tax under section 103 if issued by a State or local government, and

(ii)

which is designated by the Indian tribal government as a tribal economic development bond for purposes of this subsection.

(B)

Exceptions

Such term shall not include any bond issued as part of an issue if any portion of the proceeds of such issue are used to finance—

(i)

any portion of a building in which class II or class III gaming (as defined in section 4 of the Indian Gaming Regulatory Act) is conducted or housed or any other property actually used in the conduct of such gaming, or

(ii)

any facility located outside the Indian reservation (as defined in section 168(j)(6)).

(C)

Limitation on amount of bonds designated

(Added Pub. L. 97–473, title II, § 202(a), Jan. 14, 1983, 96 Stat. 2608; amended Pub. L. 98–21, title I, § 122(c)(6), Apr. 20, 1983, 97 Stat. 87; Pub. L. 98–369, div. A, title IV, § 474(r)(41), title X, § 1065(b), July 18, 1984, 98 Stat. 847, 1048; Pub. L. 99–514, title I, §§ 112(b)(4), 123(b)(3), title XIII, § 1301(j)(6), (7), title XVIII, §§ 1878(i), 1899A(65), Oct. 22, 1986, 100 Stat. 2109, 2113, 2658, 2905, 2962; Pub. L. 100–203, title X, § 10632(a), (b), Dec. 22, 1987, 101 Stat. 1330–455; Pub. L. 103–66, title XIII, § 13222(d), Aug. 10, 1993, 107 Stat. 481; Pub. L. 111–5, div. B, title I, § 1402(a), Feb. 17, 2009, 123 Stat. 351; Pub. L. 115–141, div. U, title IV, § 401(a)(337), Mar. 23, 2018, 132 Stat. 1200.)

cite as: 26 USC 7871