For three decades, Native American tribes were left in limbo, unable to get a clear answer from US tax authorities on a straightforward question: Are their businesses tax-exempt like their governments? This uncertainty prevented access to billions of dollars in potential loans and investment, stalling economic growth across tribal communities.
Finally, the Trump administration has provided clarity. On 15 December, the Treasury and IRS finalised rules that confirm tribal-owned businesses—ranging from casinos to solar farms—are tax-exempt, just as tribal governments are. This decision opens the floodgates to capital for 243 tribes operating a $43.9 billion gaming industry and burgeoning clean energy projects nationwide.
Why Did It Take Three Decades to Get an Answer?
But why did it take so long for this straightforward issue to be resolved?
Since the 1990s, tribes have been asking whether their businesses are subject to federal income tax. Without clear guidance from the IRS, banks were hesitant to lend. The risk of a tax audit loomed large, making financial institutions wary of extending credit, even as tribal enterprises expanded into multi-billion-pound operations.
'Uncertainty regarding the tax status has been a significant federal policy barrier faced by Tribal Nations as we seek to build our economies,' said United South and Eastern Tribes President Chief Kirk Francis in October 2024, when the Biden administration first proposed the rules.
This ambiguity effectively trapped 243 tribes operating gaming facilities and other commercial ventures worth tens of billions. Lenders hesitated, fearing audit risks, which in turn limited tribes' ability to expand or initiate new business ventures.
Two Key Rules Unlock Billions
So, what exactly changed on 15 December?
The Treasury finalised two separate regulations. The first allows tribes to provide direct financial assistance—such as mortgage aid and small business grants—to members without triggering federal income tax obligations. This implements the 2014 Tribal General Welfare Exclusion Act, which had remained unfinished for over 10 years.
The second regulation confirms that tribal-owned businesses—casinos, solar farms, wind projects, and other commercial enterprises—are tax-exempt. Any business owned and operated by a tribe now falls under this exemption.
'Tribes can now focus on growth rather than guessing the cost of financing', said US Treasurer Brandon Beach in the 15 December announcement.
A $43.9 Billion Industry Gets a Boost
The stakes are immense. Tribal gaming generated a record $43.9 billion in revenue last year, a rise of $2 billion from 2023. This revenue is generated by 243 tribes operating 532 casinos and gaming facilities across 29 states.
But these figures represent more than profit. They fund schools, healthcare, infrastructure, and welfare programmes within tribal communities, according to National Indian Gaming Commission Vice Chair Jeannie Hovland.
Now, these businesses can expand without tax liabilities and access bank loans that were previously difficult to secure.
Beyond Casinos—Clean Energy Projects Can Now Access Credits
However, this isn't solely about casinos. The tax clarity also unlocks opportunities in clean energy.
Tribal businesses can now claim tax credits for solar and wind projects under President Biden's Inflation Reduction Act—funds that were previously inaccessible because the IRS wouldn't confirm their tax status. These credits are delivered through a mechanism called 'elective pay,' allowing tax-exempt entities to receive the funds directly.
With the IRS clarifying their tax-exempt status, banks are more willing to lend to tribal infrastructure projects. 'This guidance will increase those tribal entities' access to credit and the larger capital markets," said Coalition of Large Tribes Executive Director OJ Semans when the rules were first announced.
The Build-Out Is Just Beginning
After 30 years of uncertainty, tribes now have the certainty they need to grow and develop on their own terms. The rules support tribal efforts to 'grow our economies and strengthen our communities without federal paternalism,' said TTAC Chair W. Ron Allen, acknowledging both the Trump and Biden administrations for this breakthrough.
With tax-exempt status confirmed and capital markets now accessible, expect a surge in tribal investments in renewable energy and infrastructure projects across Indian Country. For 243 tribes, the long wait is over. The billions of dollars worth of economic development is only just beginning.
