TN 38 (12-06)

RS 01901.710 Services Performed by Indian Tribal Members in Fishing Rights-Related Activities

Citations:

P.L. 100-647, Sections 3041-3044; Sections 209(a)(18) and 211 (a)(14) of the Social Security Act; 42 U.S.C. §§409(a)(18), 411(a)(14).

A. Background-Legislative History

The enactment of the Technical and Miscellaneous Revenue Act (TAMRA) on November 10, 1988, added Section 7873 to the Internal Revenue Code (26 U.S.C. §7873) to amend the definition of wages for employment tax purposes. The TAMRA also amended Title II of the Social Security Act to exclude income derived from Indian tribal fishing rights-related activities by individual members of an Indian tribe, or by a qualified Indian entity, from the definition of wages and self-employment income (see RS 01803.420).

B. Definitions

1. Fishing Rights-Related Activity

An Indian tribe’s fishing rights-related activity is any activity (including aquaculture) directly related to the harvesting, processing, or transporting of fish harvested in the exercise of a recognized fishing right. The selling of fish by a qualified Indian tribe is also a fishing rights-related activity only if the members of the tribe perform substantially all of the harvesting. For example, if a non-Indian sells the fish, then those services are not considered a fishing rights-related activity.

2. Recognized Fishing Right

An Indian tribe’s recognized fishing right is any fishing right secured on or before March 17, 1988, by a treaty between the tribe and the United States, by an Executive Order or by an Act of Congress.

3. Qualified Indian Tribe

A qualified Indian tribe is an Indian tribe that has a qualified Indian entity performing fishing rights-related activity.

4. Qualified Indian Entity

A qualified Indian entity is an entity performing fishing rights-related activity that is wholly owned by one or more qualified Indian tribes, members of those tribes, or their spouses. Substantially all of the management functions of the qualified Indian entity must be performed by members of qualified Indian tribes. Additionally, if the entity is engaged in substantial processing or transporting of fish, 90% or more of the annual gross receipts of the entity must come from fishing rights-related activity of one or more qualified Indian tribes, each of which must own at least 10% of the equity interests in the entity.

C. Policy

1. Non-Covered Services

Income received by a member of an Indian tribe, or by a qualified Indian entity, for services performed in a fishing rights-related activity of an Indian tribe or a qualified Indian entity is excluded from wages or self-employment income under Social Security and Medicare.

Examples of non-covered services that may be fully or partially excluded:

  • Data analyst

  • Enforcement staff and tribal court personnel

  • Environmental or conservation worker

  • Fisheries aide

  • Fisheries biologist

  • Fisher, processor (including smoking), transporter

  • Fishery and habitat policy analyst

  • Habitat inventory and assessment technician

  • Hatchery worker

  • Information or education service provider

  • Legislative analyst

  • Policy analyst

  • Program director, executive director

  • Public information staff

  • Support staff (e.g., secretary, accountant, payroll clerk)

  • Water quality biologist.

    NOTE: Tribal members must fish in the treaty waters of their tribe for the services to be excluded from Social Security coverage.

2. Covered Services

Income received by a member of an Indian tribe or by a qualified Indian entity for services performed in a fishing rights-related activity is counted as wages or self-employment income under Social Security and Medicare if the employer is not any of the following:

  • A member of the same Indian tribe,

  • A qualified Indian entity, or

  • A member of the Indian tribe whose fishing rights are exercised.

D. References

  • IRS’ Indian Tribal Governments Employment Tax Desk Guide at