Last week, Senators Cortez Masto (D-NV) and Murkowski (R-AK) introduced the Tribal Tax and Investment Reform Act of 2025, assigned the number S. 2022. The bipartisan legislation aims to ensure tax parity for Tribes and boost economic development in Indian Country. Since its introduction, the bill has been referred to the Senate Committee on Finance for review and consideration. The bill proposes key reforms to improve Tribal access to the New Market Tax Credit (NMTC) and the Low-Income Housing Tax Credit (LIHTC). It also eliminates the “essential government function test,” providing parity with states by removing restrictions on Tribal utilization of tax-free bonds.
Explore the Full Text of S.2022
Key Provisions and Impact
Sec 3. Treatment of Indian Tribes as States concerning Excise Taxes and Bond Issuance
- Eliminates the “essential government function test”, historically limiting Tribal bond use.
- Establishes parity with state and local governments regarding the ability of Tribes to issue governmental bonds.
- Establishes a private activity bond volume cap of $400 million alongside a separate allocation for Alaska Native Corporations.
Impact: This will open up new avenues for financing critical infrastructure projects, economic development initiatives, and essential government services within Indian Country.
Section 8: Creation of New Markets Tax Credit for tribal statistical areas.
- Creates an annual $175 million New Markets Tax Credit for low-income Tribal communities and for projects that serve or employ Tribe members.
- Attracts private capital to economically distressed communities, specifically Tribal communities, by providing tax credits to investors.
Impact: Increase NMTC deployment in Indian Country through a credit set-aside and addressing long-standing barriers to capital, workforce, and infrastructure development.
Section 9: Increased effectiveness of Tribal Low-Income Housing Tax Credits (LIHTC) in Indian Country.
- Modifies the definition of difficult development area to include an Indian area for the purposes of determining eligibility.
Impact: Improve Tribal access to tax credits through the Low-income Housing Tax Credits (LIHTC), supporting the creation of affordable housing on Tribal lands, meeting urgent needs across Indian Country.
The official summary provides additional detail on each section of the bill.
NAFOA has prepared resources for Tribes, including a redline version of S. 2022 compared to H.R. 8318, introduced in the House by Congresswoman Moore (D-WI) and Congressman Schweikert (R-AZ) in the 118th Congress, highlighting all proposed changes for easy identification. Additionally, a redline of 26 U.S. Code 7871 is provided for side-by-side comparison with Section 3 for a clear and direct assessment of the bill’s provisions against the current law.
Redline: Section 3 of S.2022 vs. U.S. Code 7871
NAFOA will continue to engage on the passage of this critical legislation and the reconciliation legislation moving through the Senate, which includes several provisions from the Tribal Tax and Investment Reform Act. NAFOA will continue to provide information on S. 2022, including updates on introduction of the bill in the House.
