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Native Leaders Applaud Passage of Tribal General Welfare Exclusion Act

[node:summary]Congress passes Tribal General Welfare Exclusion Act of 2013, exempting members from taxation on welfare benefits, on par with states.
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Tribes are lauding Congress’s passage of the Tribal General Welfare Exclusion Act of 2013 this week, which in effect mandates that the Internal Revenue Service respect the treaties, signaling a victory for both Indian country and unity, Native leaders said.

In ceasing the taxation of tribal welfare and other benefits to members, the legislation—H.R. 3043 and S. 1507, as the House and Senate versions were respectively known—puts tribes on par with states when it comes to such public programs. In so doing, it also reaffirms tribal sovereignty, leaders said. 

“The bill is designed to stop IRS efforts to tax tribal citizens who receive essential tribal government programs and services, such as housing, education, elder and child care, and cultural awards, among other things,” wrote Oglala Sioux Tribe President Bryan Brewer in describing the situation that the bill would remedy in a recent ICTMN opinion piece.

RELATED: Vote YES on H.R. 3043, the Tribal General Welfare Exclusion Act

“This is an important day in Indian country,” said Colley Billie, Chairman of the Miccosukee Tribe of Indians of Florida as well as of the General Welfare Exclusion Task Force for the United South and Eastern Tribes (USET), noting that tribes across the country had joined in support of the measure. “With Congress’ passage of H.R. 3043, federal tax policy will finally be aligned with federal Indian law and the U.S. Constitution in a way that fully respects the sovereignty of tribal governments.”

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The bill passed in the House on Wednesday September 17 with a vote of 277-141, and the Senate passed the bill unanimously the following day. Billie noted that the efforts of many people, especially politicians, provided impetus.

“As a proud member of USET, I want to thank the strong coalition of USET tribal leaders, and the many tribal leaders and tribal advocates across Indian country for their extraordinary effort and support of this historic piece of legislation; as well as Congress for passing this important legislation for Indian country, and we especially thank Rep. Devin Nunes and Senators Jerry Moran and Heidi Heitkamp for introducing this bill and working tirelessly to pass this legislation,” Billie said in a USET statement.

“Under what is known as the general welfare doctrine, the IRS excludes a broad array of government services for purposes such as education, public safety, health, housing and culture from taxation,” said Rep. Lynn Jenkins, R-2nd District Kansas, in a statement supporting the bill on the House floor. “However, this is not always the case for tribal nations. Recently the IRS has challenged tribal general welfare programs despite many of these being nearly identical to tax exempt programs provided by federal, state and local governments.”

She said many tribes, including the Prairie Band of Potawatomi Nation, the Kickapoo, Iowa and the Sac and Fox Nation in Kansas had approached her about the situation.

The U.S. Chamber of Commerce had also expressed support for the bill, in a letter to the Senate after the House passage. In addition to putting tribes on par with state and other programs, the new law establishes a training and education program for IRS agents who will implement the new rules, and suspends any current IRS investigations related to these benefits until enough personnel are versed.

“Passage would represent an important and positive step toward removing roadblocks to economic success in Indian country, and would reaffirm Congress’ longstanding commitment to tribal sovereignty and self- determination,” said the business organization in a letter urging Senate via Majority Leader Harry Reid and Republican Leader Mitch McConnell to support the bill. The letter also alluded to the Chamber's Native American Enterprise Institute Initiative, which supports entrepreneurship in Indian Country.