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Serving Corporate America |
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“Doing Well by Doing Good”
The “unfair advantage” of employing the Native American
Employment tax credits
The Indian employment credit provides non-Indian businesses with an incentive to hire Indians who live on or near the reservation. A $20,000 tax credit is available to such businesses each tax year for every ''qualified employee'' that is paid ''qualified wages.''
New Markets tax credits
The New Markets Tax Credit (NMTC) program permits investors to receive a federal income tax credit for making qualified equity investments in designated Community Development Entities (CDEs), which in turn provide investments in low-income communities, including Indian reservations. Off-reservation tribal fee or trust land may also be designated as low-income areas for NMTC purposes.
Federal contracting preferences
A Historically Underutilized Business Zone (HUBZone) program gives qualified participants preference in competing for federal contracts and creates jobs in historically distressed areas. A HUBZone can be on an Indian reservation or qualified census tract.
To receive preferential treatment by federal departments and agencies, a non-Indian business situated in a HUBZone must qualify as ''small'' under the Small Business Administration's (SBA) regulations. According to the North American Industry Classification System followed by SBA, a ''small'' company could employ as many as 500 to 1,000 people and qualify for HUBZone preferences.
Customs duty deferral, elimination or reduction
Businesses involved in international trade that locate on a reservation designated as a Foreign-Trade Zone (FTZ) could defer, reduce or, in some instances, eliminate U.S. Customs duties on products imported or exported through the reservation. Such is the case no matter how long the products were in the FTZ.
In addition, as a matter of federal law, state and local ad valorem taxes cannot be imposed upon imported tangible personal property stored or processed on the reservation FTZ, or produced in the U.S. and held in the FTZ for exportation in its original or processed form.
Discounted leasing rates
Tribal trust lands and improvements on such lands are exempt from state taxation. Typical pass-through lease costs such as real property taxes can be significantly minimized, if not eliminated, to the benefit of non-Indian lessees. A non-Indian company's leasehold interest in trust lands may also be exempt from state excise taxation.
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Serving Corporate America