The Department of Treasury and the Internal Revenue Service (IRS) will host a phone listening session on Thursday, December 15 at 4:00 p.m. EST to discuss the income tax treatment of leases at it relates to the The Helping Expedite and Advance Responsible Tribal Home Ownership Act (HEARTH Act).
The listening session comes after several tribal governments requested clarity on the tax treatment on HEARTH Act lease rentals that are directly payable to a tribe. In June 2016, the IRS issued Interim Guidance that made clear the tax treatment of Bureau of Indian Affairs (BIA) approved leases of tribal trust land set up as direct-pay leases was not taxable. The Interim Guidance represents a significant step in the right direction; however, it suggests that it only applies to BIA-approved leases, not leases approved by tribes under HEARTH Act leasing authority.
The HEARTH Act was passed as a way for tribal governments to negotiate and enter into their own land leasing process once their governing leasing regulations have been approved by the Secretary of the Interior. It allows tribes to develop and implement their own leasing regulations to drive revenue growth and community development. NAFOA strongly suggest tribes attend the listening session and have suggestions for the tax treatment of the HEARTH Act leases.
For questions or comments please contact Jennifer Parisien at Jennifer@nafoa.org or (202) 558-8040.