- 29 -
sec. 1146 is therefore inapplicable to the distribution of casino
profits over 30 years later.
Our conclusion finds further support in the IGRA. In that
act, Congress specifically addressed the question of Federal
income taxation of the distribution of revenues from Indian
gaming activities to tribe members. Section 2710(b)(3) of title
25 provides:
(3) Net revenues from any class II [or III20]
gaming activities conducted or licensed by any Indian
tribe may be used to make per capita payments to
members of the Indian tribe only if --
* * * * * * *
(D) the per capita payments are subject to Federal
taxation and tribes notify members of such tax
liability when payments are made.
Thus, it was Congress's understanding in permitting distributions
to tribe members of revenues from gaming activities conducted by
the tribe that such distributions would be subject to Federal
taxation. Petitioners' contention that the exemption provided in
25 U.S.C. sec. 1146 reaches payments to Oneida Tribe members of
tribal gaming revenues cannot be reconciled with the
congressional intent to tax gaming revenues evidenced in 25
20 The IGRA classifies gaming into three categories: class
I, generally covering social games for prizes of minimal value;
class II, which consists of bingo and certain card games; and
class III, which covers all remaining gaming, such as that
typically conducted in casinos.
Sec. 2710(d)(1)(A) of tit. 25 makes the provisions of 25
U.S.C. sec. 2710(b) applicable to class III gaming.
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