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Question: Do Native Americans living on a reservation pay federal income taxes and estate taxes?
Answer: Yes. As U.S. citizens, Native Americans are subject to U.S. income and estate tax law.
Here’s an excerpt from the Bureau of Indian Affairs website:
Are American Indians and Alaska Natives citizens of the United States?
Yes. As early as 1817, U.S. citizenship had been conferred by special treaty upon specific groups of Indian people. American citizenship was also conveyed by statutes, naturalization proceedings, and by service in the Armed Forces with an honorable discharge in World War I. In 1924, Congress extended American citizenship to all other American Indians born within the territorial limits of the United States. American Indians and Alaska Natives are citizens of the United States and of the individual states, counties, cities, and towns where they reside. They can also become citizens of their tribes or villages as enrolled tribal members.
Do American Indians and Alaska Natives pay taxes?
Yes. They pay the same taxes as other citizens with the following exceptions:
- Federal income taxes are not levied on income from trust lands held for them by the U.S.
- State income taxes are not paid on income earned on a federal Indian reservation.
- State sales taxes are not paid by Indians on transactions made on a federal Indian reservation.
- Local property taxes are not paid on reservation or trust land.
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