U.S. Department of the Treasury Issues Proposed Guidance to Clarify Wholly-Owned Tribally Chartered Entities Are Not Subject to Income Tax and Expand Tribal Access to Clean Energy Tax Credits

Proposed rules describe that Tribally chartered entities have same federal tax status as their owning Tribes and clarify Tribal eligibility for elective pay to access Inflation Reduction Act tax creditsWASHINGTON – Today, the U.S. Department of the Treasury and the IRS issued a Notice of Proposed Rulemaking(NPRM) clarifying that wholly-owned Tribal entities chartered or organized by one or more Tribes have the same tax status of their owning Tribes. This means that these Tribal entities – businesses entirely owned by a Tribe – would not be subject to federal income tax. The proposed rule recognizes that Tribal economies are unique and rely on Tribal businesses to generate government revenue.