
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC7873]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                        CHAPTER 80--GENERAL RULES
 
        Subchapter C--Provisions Affecting More Than One Subtitle
 
Sec. 7873. Income derived by Indians from exercise of fishing 
        rights
        

(a) In general

                (1) Income and self-employment taxes

        No tax shall be imposed by subtitle A on income derived--
            (A) by a member of an Indian tribe directly or through a 
        qualified Indian entity, or
            (B) by a qualified Indian entity,

    from a fishing rights-related activity of such tribe.

                        (2) Employment taxes

        No tax shall be imposed by subtitle C on remuneration paid for 
    services performed in a fishing rights-related activity of an Indian 
    tribe by a member of such tribe for another member of such tribe or 
    for a qualified Indian entity.

(b) Definitions

    For purposes of this section--

                 (1) Fishing rights-related activity

        The term ``fishing rights-related activity'' means, with respect 
    to an Indian tribe, any activity directly related to harvesting, 
    processing, or transporting fish harvested in the exercise of a 
    recognized fishing right of such tribe or to selling such fish but 
    only if substantially all of such harvesting was performed by 
    members of such tribe.

                    (2) Recognized fishing rights

        The term ``recognized fishing rights'' means, with respect to an 
    Indian tribe, fishing rights secured as of March 17, 1988, by a 
    treaty between such tribe and the United States or by an Executive 
    order or an Act of Congress.

                     (3) Qualified Indian entity

        (A) In general

            The term ``qualified Indian entity'' means, with respect to 
        an Indian tribe, any entity if--
                (i) such entity is engaged in a fishing rights-related 
            activity of such tribe,
                (ii) all of the equity interests in the entity are owned 
            by qualified Indian tribes, members of such tribes, or their 
            spouses,
                (iii) except as provided in regulations, in the case of 
            an entity which engages to any extent in any substantial 
            processing or transporting of fish, 90 percent or more of 
            the annual gross receipts of the entity is derived from 
            fishing rights-related activities of one or more qualified 
            Indian tribes each of which owns at least 10 percent of the 
            equity interests in the entity, and
                (iv) substantially all of the management functions of 
            the entity are performed by members of qualified Indian 
            tribes.

        For purposes of clause (iii), equity interests owned by a member 
        (or the spouse of a member) of a qualified Indian tribe shall be 
        treated as owned by the tribe.

        (B) Qualified indian tribe

            For purposes of subparagraph (A), an Indian tribe is a 
        qualified Indian tribe with respect to an entity if such entity 
        is engaged in a fishing rights-related activity of such tribe.

(c) Special rules

           (1) Distributions from qualified Indian entity

        For purposes of this section, any distribution with respect to 
    an equity interest in a qualified Indian entity of an Indian tribe 
    to a member of such tribe shall be treated as derived by such member 
    from a fishing rights-related activity of such tribe to the extent 
    such distribution is attributable to income derived by such entity 
    from a fishing rights-related activity of such tribe.

          (2) De minimis unrelated amounts may be excluded

        If, but for this paragraph, all but a de minimis amount--
            (A) derived by a qualified Indian tribal entity, or by an 
        individual through such an entity, is entitled to the benefits 
        of paragraph (1) of subsection (a), or
            (B) paid to an individual for services is entitled to the 
        benefits of paragraph (2) of subsection (a),

    then the entire amount shall be entitled to the benefits of such 
    paragraph.

(Added Pub. L. 100-647, title III, Sec. 3041(a), Nov. 10, 1988, 102 
Stat. 3640.)


                             Effective Date

    Section 3044 of subtitle E (Secs. 3041-3044) of title III of Pub. L. 
100-647 provided that:
    ``(a) Effective Date.--The amendments made by this subtitle 
[enacting this section and amending sections 1402 and 3121 of this 
title, section 71 of Title 25, Indians, and sections 409 and 411 of 
Title 42, The Public Health and Welfare] shall apply to all periods 
beginning before, on, or after the date of the enactment of this Act 
[Nov. 10, 1988].
    ``(b) No Inference Created.--Nothing in the amendments made by this 
subtitle shall create any inference as to the existence or non-existence 
or scope of any exemption from tax for income derived from fishing 
rights secured as of March 17, 1988, by any treaty, law, or Executive 
Order.''

                  Section Referred to in Other Sections

    This section is referred to in sections 1402, 3121 of this title; 
title 25 section 71; title 42 sections 409, 411.
