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Information about the Proposed Regulations on Tribal Law Entities' Tax Classification by Treasury and IRS

Writer's picture: OE SolarOE Solar

The Department of the Treasury and the Internal Revenue Service (IRS) have recently proposed regulations that directly impact Tribal law entities entirely owned by Indian Tribal governments. These entities, which are formed under the laws of the Tribes that own them, have been the subject of ongoing discussions between the Treasury Tribal Advisory Committee and the Tribes. 

At OE Solar, we recognize the importance of Tribal sovereignty and self-determination. These proposed regulations are a significant step towards ensuring that Tribal law entities are adequately supported in their financial and operational endeavors.

Key Highlights of the Proposed Regulations: 


Federal Tax Classification: The proposed regulations clarify that Tribal law entities entirely owned by Tribes will not be recognized as separate entities for federal tax purposes. This means these entities will not be subject to federal income tax. 


Energy Credits: The regulations also stipulate that Tribal law entities owned by Tribes may benefit from energy credits under the Inflation Reduction Act. This is particularly relevant for entities involved in sustainable and renewable energy projects. 


Reliance on Proposed Regulations: Until the final regulations are published in the Federal Register, Tribes and related entities can generally rely on these proposed regulations. 


Definitions and Examples: The proposed regulations include definitions and examples to help understand their application. Notably, one example illustrates the federal tax classification of an entity entirely owned by multiple Tribes. 


Public Involvement: 


The Treasury and IRS are inviting comments on these proposed regulations. Interested parties can submit their feedback through Regulations.gov by referencing IRS and REG-113628-21. Written comments can also be mailed to: 

CC:PA:01:PR (REG-113628-21) Room 5203, Internal Revenue Service P.O. Box 7604, Ben Franklin Station Washington, DC 20044 


Additionally, a public hearing is scheduled for January 17, 2025, providing an opportunity for further discussion and input. 


At OE Solar, we recognize the importance of Tribal sovereignty and self-determination. These proposed regulations are a significant step towards ensuring that Tribal law entities are adequately supported in their financial and operational endeavors. The inclusion of energy credits for such entities aligns with our commitment to advancing sustainable energy solutions and empowering all communities to benefit from renewable energy initiatives. 


Stay informed with OE Solar as we continue to monitor developments in this area and provide updates on how these regulations may impact your projects and investments. 

About OE Solar: OE Solar is a leading provider of sustainable energy solutions for Commercial Solar & Government EPC with over 15 years of industry experience, knowledge, and know-how.  Based in Albuquerque, New Mexico, we are dedicated to helping our clients harness the power of renewable energy to create a cleaner, greener future. We continually stand by our moto of: Ownership. Efficiency.

Communication. 


Contact us to learn more about our services and how we can assist you with your energy needs. Reach us at: info@oesolarnm.com  tel:1-505-805-2109 

 

Sources & Citations 

 

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*OE Solar is not a tax professional, will not give tax advice, and cannot guarantee any of the incentives that are highlighted on our site.

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