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Tribes support measure to address general welfare exclusion

Tribes are supporting legislation in the 113th Congress that would address taxation of benefits provided by tribal governments.

Generally, all income and benefits are subject to federal income tax. But the Tribal General Welfare Exclusion Act ensures that tribal members won't have to pay taxes on certain benefits.

“This bill levels the playing field by recognizing the inherent sovereignty of tribal governments to provide programs and services to its citizens, without subjecting them to heightened scrutiny from the IRS,” Sen. Heidi Heitkamp (D-North Dakota) said in a press release. “Just as state and local governments are able to determine what programs best help their citizens – like scholarships, elder or child care, or housing assistance – we must recognize tribal governments also have those same rights."

Heitkamp is a co-sponsor of S.1507, which was introduced in the Senate on September 17. The House version is H.R.3043.

The Joint Committee on Taxation considered the bill on September 17 and gave it a revenue score of zero dollars, meaning its impact on the federal budget will be minimal. Nearly every major tribal organization supports the measure.

The Internal Revenue Service has been criticized in recent years for going after tribal benefits. The Obama administration issued new guidance, Application of the General Welfare Exclusion to Indian Tribal Government Programs That Provide Benefits to Tribal Members, Notice 2012-75, late last year.

Get the Story:
Heitkamp bill ends taxation of some native health programs (The Bismarck Tribune 9/25)

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IRS issues new guidance on general welfare exclusion for tribes (12/6)

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