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Native American Fishing Rights
Tax-exempt income from tribal fishing-rights activities
(ORS 316.785)
Income from a fishing-rights related activity is exempt from federal and state taxation if the income is derived by:
  1. An enrolled member of a federally-recognized American Indian tribe (either directly or through a qualified Indian entity); or
  2. A qualified Indian entity.

Wages are
taxable if paid by an employer who is not:
  • An enrolled member of the same tribe; or
  • A qualified Indian entity. 
Wages are also taxable if paid to an employee who is not an enrolled member of the tribe whose fishing rights are exercised.  Tribal members must fish in their own waters to be exempt.
 
Definitions:
 
Fishing rights-related activity means an activity (including aquaculture) that is directly related to:
  • Harvesting, processing, or transporting fish that were harvested in the exercise of recognized fishing rights of that tribe; or
  • Selling fish, but only if substantially all of the harvesting was performed by members of that tribe.
To qualify as "fishing rights-related activity," the tribe's recognized fishing right must have been secured as of March 17, 1988 by a treaty between the tribe and the United States; by an Executive Order; or by an Act of Congress.
 
A "qualified Indian entity" must be 100 percent owned by a federally recognized Indian tribe or tribal members, and substantially all of its management functions must be performed by tribal members. It may be jointly owned by more than one tribe or members of more than one tribe.
 
Processors and transporters: 90 percent rule. If the entity engages to any extent in any substantial processing or transporting of fish, then at least 90 percent of the annual gross receipts of the entity must be derived from the exercise of protected fishing rights of tribes whose members own at least 10 percent of the equity interests in the entity.
 
Employer's duty. If you are an employer engaged in fishing rights-related activities, you may be required to:
  • Verify your status as a qualified Indian entity.
  • Verify your employee's proof of tribal membership.
  • Verify time allocated to fishing versus non-fishing activity. 
  • Maintain records to support each employee's time allocation.
  • Maintain records to support the 90 percent gross receipts rule.
 
Employment tax form preparation
  • Do not include exempt wages on Form 940, Form 941, Form W-2, or Oregon Form OQ.
  • Wages paid for non-fishing activities are subject to all applicable employment taxes, including withholding, and employment tax reporting.
  • If only exempt fishing-rights related income is paid to a tribal member, no Form W-2 is required.

Links

Tribal Information Home

Native American Taxation and Oregon Personal Income Tax

Native American Taxpayers FAQ

Native American Fishing Rights

American Indian Income Tax Subtraction

Legislative Commission on Indian Services (Oregon)

Links to Tribal Websites

Office of Indian Tribal Governments at the IRS

Oregon Administrative Rule 150-316.777

Oregon Revised Statute 316.777