Tribal Tax Resources
Many tribal businesses are eligible for federal and state tax exemptions on income and expenses for investors, owners, and employees.
Residential Agreement
The State of Michigan signed a tax agreement benefiting many members whose principal residence is in specific agreement areas. Members in these areas are exempt from state income tax and receive state tax discounts on many purchases. The agreement applies to Michigan sales tax (6% of retail price), use tax (6% of purchase price), motor fuel tax, cigarette tax, and single business tax. Members are also entitled to an annual income tax refund check, which is 4% of adjusted gross income (use tax form 4013).
Tax Exemptions
Tribal governments, as whole or majority owners, can form business corporations that also are exempt from income taxes. State governments do not have the authority to tax tribal governments or the businesses of individuals living on tribal land when the income originates from tribal land resources. This includes state property and income taxes. However, states may tax the income of Native Americans who live outside tribal lands even though their income comes from business carried out inside the tribal land.
Tax Credits
Businesses that operate on tribal lands may depreciate property used within the tribal lands at an accelerated rate. This reduces the property tax liability of businesses and creates an incentive to invest in businesses on Native American lands. Investment Tax Credit or New Market Tax Credits may be available for capital investments on tribal lands; this provides tax credits of up to 39 percent of the entire amount of investment. Indian Wages and Insurance Tax Credits may be available for employers hiring employees on tribal lands.
Trust Land Maps
Residential Tax Agreement Maps
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