A Tribal Member’s “Closest Connections” May Determine Application of California’s Personal Income Tax

Income_Tax_HeaderBy: Eric D. Swenson | Senior Counsel | eric.swenson@procopio.com
Theodore J. Griswold | Partner | ted.griswold@procopio.com

A California resident is taxable on their worldwide income for California personal income tax purposes.  Due to California’s very high individual income tax rates (up to 13.3% in 2015), one of the more common questions posed to me (and one in which we handle often on audit) is whether an individual is deemed a “resident” of California when they spent time both within and without California during the tax year. Continue reading

The Internal Revenue Service Addresses the Federal Income Taxation of Per Capita Distributions to Tribal Members

By: Eric D. Swenson | Senior Counsel | eric.swenson@procopio.com
Theodore J. Griswold | Partner | ted.griswold@procopio.com

On September 18, 2015, in Notice 2015-67 (the “Notice”), the Internal Revenue Service (“IRS”) issued final guidance on the federal income tax treatment of per capita distributions made to Tribal Members from funds held in Tribal Trust Accounts. See entire Notice here.

By way of background, it has been long standing law that Tribal Members are U.S. citizens and, similar to other U.S. citizens, are subject to federal income taxes on their receipt of income. See Squire v. Capoeman, 351 U.S. 1 (1956) (per capita distributions of net gaming revenues taxable). Continue reading