---
kind: "section"
citation: "26 U.S.C. § 7873"
title: "26"
title_heading: "Internal Revenue Code"
number: "7873"
heading: "Income derived by Indians from exercise of fishing rights"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/7873"
units:
  - "Subtitle F — Procedure and Administration"
  - "Chapter 80 — General Rules"
  - "Subchapter C — Provisions Affecting More Than One Subtitle"
---

# §7873. Income derived by Indians from exercise of fishing rights

- (a) **In general—**
  - (1) **Income and self-employment taxes—** No tax shall be imposed by subtitle A on income derived—
    - (A) by a [member](/usc/26/7701.md?p=j-4) of an Indian tribe directly or through a qualified Indian entity, or
    - (B) by a qualified Indian entity,

    from a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of such tribe.

  - (2) **Employment taxes—** No tax shall be imposed by subtitle C on remuneration paid for services performed in a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of an Indian tribe by a [member](/usc/26/7701.md?p=j-4) of such tribe for another [member](/usc/26/7701.md?p=j-4) of such tribe or for a qualified Indian entity.
- (b) **Definitions—** For purposes of this section—
  - (1) **Fishing rights-related activity—** The term “fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity” means, with respect to an Indian tribe, any activity directly [related](/usc/26/7701.md?p=a-51-I-vi) to harvesting, processing, or transporting fish harvested in the exercise of a recognized fishing right of such tribe or to selling such fish but only if substantially all of such harvesting was performed by [members](/usc/26/7701.md?p=j-4) of such tribe.
  - (2) **Recognized fishing rights—** The term “recognized fishing rights” means, with respect to an Indian tribe, fishing rights secured as of March 17, 1988, by a treaty between such tribe and the [United States](/usc/26/7701.md?p=a-9) or by an Executive order or an Act of Congress.
  - (3) **Qualified Indian entity—**
    - (A) **In general—** The term “qualified Indian entity” means, with respect to an Indian tribe, any entity if—
      - (i) such entity is engaged in a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of such tribe,
      - (ii) all of the equity interests in the entity are owned by qualified Indian tribes, [members](/usc/26/7701.md?p=j-4) of such tribes, or their spouses,
      - (iii) except as provided in regulations, in the case of an entity which engages to any extent in any substantial processing or transporting of fish, 90 percent or more of the annual gross receipts of the entity is derived from fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activities of one or more qualified Indian tribes each of which owns at least 10 percent of the equity interests in the entity, and
      - (iv) substantially all of the management functions of the entity are performed by [members](/usc/26/7701.md?p=j-4) of qualified Indian tribes.

      For purposes of [clause (iii)](#b-3-A-iii), equity interests owned by a [member](/usc/26/7701.md?p=j-4) (or the spouse of a [member](/usc/26/7701.md?p=j-4)) of a qualified Indian tribe shall be treated as owned by the tribe.

    - (B) **Qualified Indian tribe—** For purposes of [subparagraph (A)](#b-3-A), an Indian tribe is a qualified Indian tribe with respect to an entity if such entity is engaged in a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of such tribe.
- (c) **Special rules—**
  - (1) **Distributions from qualified Indian entity—** For purposes of this section, any distribution with respect to an equity interest in a qualified Indian entity of an Indian tribe to a [member](/usc/26/7701.md?p=j-4) of such tribe shall be treated as derived by such [member](/usc/26/7701.md?p=j-4) from a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of such tribe to the extent such distribution is attributable to income derived by such entity from a fishing rights-[related](/usc/26/7701.md?p=a-51-I-vi) activity of such tribe.
  - (2) **De minimis unrelated amounts may be excluded—** If, but for this paragraph, all but a de minimis amount—
    - (A) derived by a qualified Indian tribal entity, or by an individual through such an entity, is entitled to the benefits of [paragraph (1)](#a-1) of subsection (a), or
    - (B) paid to an individual for services is entitled to the benefits of [paragraph (2)](#a-2) of subsection (a),

    then the entire amount shall be entitled to the benefits of such paragraph.


## Source credit

(Added Pub. L. 100–647, title III, § 3041(a), Nov. 10, 1988, 102 Stat. 3640.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 100–647, title III, § 3044, Nov. 10, 1988, 102 Stat. 3642, provided that: Effective Date.—The amendments made by this subtitle [subtitle E (§§ 3041–3044) of title III of Pub. L. 100–647, enacting this section and amending sections 1402 and 3121 of this title, section 71 of Title 25, Indians, and sections 409 and 411 of Title 42, The Public Health and Welfare] shall apply to all periods beginning before, on, or after the date of the enactment of this Act [Nov. 10, 1988]. No Inference Created.—Nothing in the amendments made by this subtitle shall create any inference as to the existence or non-existence or scope of any exemption from tax for income derived from fishing rights secured as of March 17, 1988, by any treaty, law, or Executive Order.”