Can Indian tribes own renewable power projects? IRS says yes; not a Pickle - .PDF file.
The IRS released a ruling this week that opens the door to Indian tribes playing a much larger role in renewable power projects. It allows an Indian tribal government to be an owner or lessee of these projects. The rationale: an Indian tribal government is not a governmental unit or tax-exempt organisation for purposes of tax subsidies. The taxpayer in the ruling leased a power plant from an Indian tribe and planned to sell power to a third party. The tax-payer and the tribe agreed to let the taxpayer (the lessee) claim an investment tax credit. The option to let a lessee claim an investment credit is not available if the lessor could not have claimed the credit. The IRS ruled that the tribal government could have claimed the credit.
Click on the link above to download the briefing from Chadbourne & Parke.