Recently introduced by Rep. Gwen Moore (D-WI) and Rep. David Schweikert (R-AZ), the Tribal Tax Investment and Reform Act of 2026 (H.R. 7705) amends the Internal Revenue Code to treat tribal governments as states for specified tax purposes.
The Details:
- Repeals the “essential government function” test that limits tribal bond issuance;
- Establishes private activity bond volume cap rules to enable tribal governments to issue private activity bonds for economic development purposes like state and local governments can;
- Creates a $175 million annual New Markets Tax Credit allocation for low-income tribal communities,
- Strengthens the Low-Income Housing Tax Credit in Indian areas by modifying the definition of difficult development area to include an Indian area for the purposes of determining eligible basis;
- Places tribes on equal footing with state and local governments for select excise taxes; and
- Updates the expired Indian Employment Tax Credit by increasing the wage offset from $20,000 to $30,000.
What They’re Saying: Analysts say the bill’s bond provisions may face fewer political hurdles than competitive tax credits because they seek bond parity rather than reallocating limited annual credit among states or other entities.
Why This Matters: Under current law, tribes face restrictions that states and local governments do not, including limits on certain tax-exempt bonds and reduced access to housing and development tax credits. These barriers can increase costs and delay infrastructure, housing, and business projects in Indian Country.
