Erik M. Jensen


This article describes some of the issues that will affect whether national, state, and tribal governments can tax investors who do business, or who invest in doing business, within Indian country (a term generally meaning American Indian reservations, although it can be broader than that).

Absent treaty language or express statutory language to the contrary, tribal members are subject to federal taxes of general application, such as the income tax. The Internal Revenue Code does contain some specific provisions exempting certain sorts of income, such as that from fishing-rights related activities, from taxation. In general, nonmembers of a tribe who do business within Indian country and who are subject to U.S. taxation will be subject to federal taxes just as they would be for transactions entered into elsewhere. The Code includes specific incentives, however, like accelerated depreciation, for investment in Indian country. The tribes themselves, and tribal corporations formed under the Indian Reorganization Act, are exempt from federal income taxation. This exemption makes it possible to structure transactions so as to economically transfer the benefits of the tribal exemption to non-Indian investors. Although the tribes are exempt from income taxation, they may be subject to federal excise taxes, as Chickasaw Nation v. U.S., dealing with federal wagering taxes, shows. But there is no generally applicable principle at work here. Some excise taxes clearly apply to Indian tribes, some don't, and some have uncertain application to the tribes.


Taxation, Indian Country

Publication Date


Document Type


Place of Original Publication

Journal of Taxation of Investments

Publication Information

20 Journal of Taxation of Investments 223 (2003)


COinS Erik M. Jensen Faculty Bio