Source: http://nevadalaw.info/doing-business-wit-native-american-indian-tribes-in-nevada-part-3/
Timestamp: 2019-04-25 20:53:38+00:00

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This is the third in a series of articles on doing business with Native American Tribes in Nevada. These articles provide an overview of the political and business structures employed by Indian tribes, as well as the advantages and challenges of doing business in Indian Country.
Non-Indians conducting business in Indian country are exposed to a mix of tribal, federal, state, and local laws. Due care should be taken to know the legal status of the entity with which one is conducting business.
Many tribes conduct business internally and with non-Indians through an economic development arm of the tribe without a separate legal structure. These are sometimes called agencies, or divisions of the tribe.
Waive sovereign immunity where desirable.
A Section 17 corporation enjoys the same tax status, privileges, and immunities belonging to the tribe. Some courts have held that a Section 17 corporation with a “sue and be sued” clause in its charter has waived its sovereign immunity. In response to these decisions, the BIA has amended its model Section 17 Corporate Charter to provide that any waiver of immunity must be by resolution of the entity’s board of directors. Most Section 17 corporations have similarly amended their charters.
Some tribes have adopted laws allowing the formation of tribally-chartered for-profit corporations. Several courts have held that these corporations, when owned by the tribe, enjoy sovereign immunity. The tax status of these entities is uncertain. The IRS has used an “Integral Part” test to determine tax status in the past, but has discontinued that practice while promising to resolve the uncertainty at some point in the future.
A tribe may choose to form a corporation under the laws of a state. By doing so, the tribe operates the same as any other corporation chartered by the state, including tax treatment. It may enjoy the same immunity as the tribe, however, depending on the laws of the state in which it is incorporates. Tribes may choose form corporations under state law because such corporations are familiar to potential lenders and business venturers.
Limited Liability Companies are an attractive option for entity formation. LLCs can be formed under either tribal or state law. The transaction costs for creating an LLC are low, and combine the flexibility and tax benefits of a partnership with the limited liability attributes of a corporation. Its members’ liability is limited in a manner similar to stockholders in a corporation, while the LLC’s income is subject to only one level of taxation. The LLC may elect to be taxed as a corporation, like a partnership if owned by more than one member, or as a disregarded entity if wholly-owned. An LLC formed under tribal law enjoys the same benefits as a tribally-chartered for-profit corporation. LLCs formed under state law will be subject to the same immunity treatment as state law corporations.
Joint ventures are generally treated in the law as a type of partnership established by a contractual relationship where two or more parties conduct business and agree to share profits and losses jointly, in proportion to the capital contributed. Joint ventures between the tribe and outside businesses or individuals may also be formed as a corporation or an LLC under either tribal or state law. Sovereign immunity cannot flow to the joint venture entity itself, but the tribe would still enjoy immunity for its ownership interest in the venture. Similarly, a tribe will not be taxed on its share of income in a partnership or a Joint Venture entity taxed as a partnership. Joint Ventures can raise money through private placements, private lending, commercial banking arrangements, or through government-guaranteed loans in some circumstances.
 California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987); White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) (describing the Federal Indian Law preemption doctrine); Montana v. United States, 450 U.S. 544 (1981) (describing the circumstances under which non-tribal members are subject to tribal jurisdiction).
 25 U.S.C. § 477; 25 C.F.R. § 82.
 Cohen’s Handbook of Federal Indian Law § 4.04[a][iii]; 21.02.
 Rosebud Sioux Tribe v. A&P Steel, Inc., 874 F.2d 550 (8th Cir. 1989).
 Cook v. AVI Casino Enterprises, Inc., 548 F. 3d 718 (9th Cir. 2008); Native American Distributing, et al v. Seneca-Cayuga Tobacco Co., et al, No. 07-5104 (10th Cir. 2008).
 Rev. Rul. 94-16; PLR 9826005.
 Treasury Regulations 301.7701-1 through 301.7701-3.

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