Income derived by certain Indians and qualified Indian-owned entities from the exercise of fishing rights protected by treaties, Federal statutes or executive orders, is not subject to Federal, State or local income tax, including Social Security. This income is excluded in determining NESE.

An Indian entity is qualified if:

• •

  It engages in a fishing rights related activity of the Indian nation,

• •

  All of the equity interests in the entity are owned by qualified Indian nations, members of the nations, or their spouses.

• •

  It engages to any extent in substantial processing or transporting of fish and 90 percent or more of the annual gross receipts are derived from fishing rights-related activities of one or more qualified Indian nation which owns at least 10 percent of the equity interests in the entity.

• •

  Substantially all of the management functions of the entity are performed by members of qualified nations.