Doing Business in Indian Country: Introduction to American Indian Law Concepts Affecting Taxation

15 Pages Posted: 28 Mar 2003 Last revised: 5 Mar 2009

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law


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.

Suggested Citation

Jensen, Erik M., Doing Business in Indian Country: Introduction to American Indian Law Concepts Affecting Taxation. Journal of Taxation of Investments, Vol. 20, p. 223, Spring 2003. Available at SSRN:

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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