Nonprofit Community Development Activities in Remote Native Villages
Section 70428 · Sec. 70428 ·
What this chapter is about
This part treats Bering Sea fishing work by certain village bodies as part of their charitable purpose. So it does not draw tax as unrelated business. A wholly owned subsidiary may hand its assets over tax free within 18 months. The rule lasts as long as the quota program does.
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70428 in the PDF
What the document says
“shall be considered substantially related to the exercise or performance of the purpose constituting the basis of such entity's exemption under section 501(a) of such Code”
The section provides that for subchapter F of chapter 1 of the Internal Revenue Code of 1986, any activity substantially related to taking part or investing in fisheries in the Bering Sea and Aleutian Islands statistical and reporting areas, carried on by an entity identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act, counts as substantially related to the purpose behind the entity's exemption, where it furthers one or more of the purposes in section 305(i)(1)(A) of that Act. Such activities include harvesting, processing, transportation, sales and marketing of fish and fish products from those areas.
What the document actually says
“shall be considered substantially related to the exercise or performance of the purpose constituting the basis of such entity's exemption under section 501(a) of such Code”
That sentence, in plain words
The work counts as part of the body's own charitable aim. That aim is the basis of its tax exempt status.
What this is about
So the income is not taxed as an outside business. The work covers fishing in named Alaskan waters. It also covers processing and selling the fish.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of the TreasuryHow: statuteSec. 70428 in the PDF
What the document says
“no gain or income resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and”
The section provides that where the assets of a trade or business relating to such an activity, held by a subsidiary wholly owned by one of the named entities, are transferred to that entity, including in liquidation of the subsidiary, within 18 months of enactment, no gain or income from the transfer is recognized to either, and all income the entity later derives from that transferred trade or business is exempt from tax.
What the document actually says
“no gain or income resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and”
That sentence, in plain words
No gain or income from the handover is counted. That holds for the subsidiary and for the parent body.
What this is about
The handover must happen within 18 months of this law. Winding up the subsidiary counts. Later income from that business is also tax free.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
“This section shall take effect on the date of the enactment of this Act and shall remain effective during the existence of the western Alaska community development quota program”
The section takes effect on the date of enactment and stays in effect while the western Alaska community development quota program established by section 305(i)(1) of the Magnuson-Stevens Fishery Conservation and Management Act, as amended, exists.
What the document actually says
“This section shall take effect on the date of the enactment of this Act and shall remain effective during the existence of the western Alaska community development quota program”
That sentence, in plain words
The part starts on the day this law passed. It lasts as long as one named program does.
What this is about
That program serves villages in western Alaska. It is set up by an older fishing law. If it ends, this part ends with it.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: treat the fisheries activity as substantially related to the exempt purpose, allow a tax free transfer from a wholly owned subsidiary and exempt the income that follows, and set the effective date and how long the section lasts.
Nothing in the section is left out. It has three subsections and each is recorded.
The section points to the Magnuson-Stevens Fishery Conservation and Management Act, a regulation in title 50 of the Code of Federal Regulations, and subchapter F of chapter 1 of the Internal Revenue Code of 1986, none of which is indexed here.
