A corporation formed by a tribe may be subject to federal income tax, depending on the form of the corporation. A tribe may incorporate in several ways, including: Indian Reorganization Act of 1934 - A corporation formed under section 17 of this act is not subject to federal income tax. Oklahoma Indian Welfare Act - A corporation formed by an Oklahoma tribe under section 3 of this act is not subject to federal income tax. Oklahoma tribes are not eligible to incorporate under the Indian Reorganization Act of 1934. State Chartered Corporation - A corporation formed under state law is ordinarily subject to federal income tax on income earned after October 1, 1994. Income earned before October 1, 1994 is not subject to tax. Tribal Law - This issue is currently under review by IRS Counsel and guidance will be issued in the near future. Partner in a Partnership - A tribe that is a partner is not subject to federal income tax. However, a tribally owned state chartered corporation that is a partner is subject to tax on the distributive share of partnership income. Return to List of FAQs
