[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 325 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 325

    To amend the Internal Revenue Code of 1986 to provide that the 
 unrelated business income tax shall apply to the gaming activities of 
                             Indian tribes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

 Mr. Solomon introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide that the 
 unrelated business income tax shall apply to the gaming activities of 
                             Indian tribes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Indian Gaming Tax Reform Act''.

SEC. 2. TREATMENT OF INDIAN GAMING ACTIVITIES UNDER UNRELATED BUSINESS 
              INCOME TAX.

    (a) In General.--Paragraph (2) of section 511(a) of the Internal 
Revenue Code of 1986 (relating to imposition of tax on unrelated 
business income of charitable, etc., organizations) is amended by 
adding at the end the following new subparagraph:
                    ``(C) Gaming activities of indian tribes.--
                            ``(i) In general.--The tax imposed by 
                        paragraph (1) shall apply to any Indian tribal 
                        organization; except that, notwithstanding any 
                        other provision of this part, in the case of 
                        such an organization, the term `unrelated trade 
                        or business' means only a trade or business of 
                        conducting any class II or class III gaming 
                        activity (as defined in section 4 of the Indian 
                        Gaming Regulatory Act (25 U.S.C. 2701 et seq.), 
                        as in effect on the date of the enactment of 
                        this subparagraph), including a gaming activity 
                        described in section 513(a)(1).
                            ``(ii) Indian tribal organization.--For 
                        purposes of clause (i), the term `Indian tribal 
                        organization' means any Indian tribe and any 
                        organization which is immune or exempt from tax 
                        under this subtitle solely by reason of being 
                        owned or controlled by an Indian tribe.''
    (b) Treatment of Amounts Paid for Charitable Purposes, Etc., By 
Reason of State or Federal Law.--Subsection (b) of section 512 of such 
Code is amended by adding at the end the following new paragraph:
            ``(18) In the case of an Indian tribal organization (as 
        defined in section 511(a)(3)), if, by reason of State or 
        Federal law or of a contract with the United States or with any 
        State or political subdivision thereof, such organization is 
        required to use any portion of the net proceeds of any gaming 
        activity for specified purposes, the deduction for so using 
        such proceeds shall be treated as allowed under section 170 for 
        purposes of applying paragraph (10). The preceding sentence 
        shall not apply to such proceeds which are paid as general 
        revenues to the United States or to any State or political 
        subdivision thereof.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1998.
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