Why would a Tribal Nation be interested in purchasing my business?

The majority of tribes derive the bulk of revenues to fund governmental operations from gaming. Tribe are acutely aware of the need to diversify their revenue sources and thus they endeavor to create non-gaming revenue streams. Tribes are actively seeking to purchase non-gaming businesses.

Why would I be interested in selling my business to a Tribal Nation?

favorable selling price, terms and conditions. Tribally-owned businesses possess unique tax and market advantages that accrue to them by virtue of their sovereignty. Tribes can pay a premium price for a business and still earn attractive returns on their investment.

What are some of these unique tribal competitive advantages?

The list Is extensive and many of the advantages relate to the specific circumstances of each tribe. However, some of the advantages Include the non-taxability of Income, favorable regulatory climate, competitive advantages for federal contract opportunities pursuant to the SBA's 8(a) program and access to capital and financial services via a myriad of federal programs.

My business Is 8(a) certified and nearing the end of the 9 year term. Can I sell my business to a tribe and reup under the more favorable tribal 8(a) status?

Generally, yes.

What are some of the major advantages and benefits of the Tribal 8(a) status?

  • Sole source contracts above the usual $4 million threshold.
  • Sole source contracts up to $22 million without justification or subject to third party protests.
  • Eligibility for the Department of Defense 5% Indian Incentive Award.
  • Buy Indian Act.
  • More favorable non-affiliation rules.

If I sell my business to a Tribal Nation, can I stay on and continue to manage and run the company?

Yes, that is possible and if that is your desire we at Sage will include your ongoing management as a key deal point in our negotiations. Indeed, many acquiring tribes recognize that they do not have the experience or expertise to successfully managed the business post-acquisition. Thus, tribes are generally receptive to keeping existing management in place via an ongoing management agreement.

Do tribal owned businesses pay Federal Income Tax?

No federal income tax. Tribes and tribal enterprises are exempt from federal income taxes. If a business entity is formed between a tribe and a non-tribal company, the portion owned by the tribe (or the tribal corporation) is in most cases exempt from federal income taxes. This is true regardless of whether the business owned is on or off tribal land. ☛ No state taxes. This includes property taxes, sales tax and corporate business taxes. If the land is located on an Indian reservation, owned by a tribe, and held in “trust” by[MOU1] the federal government, then the land is not subject to state property taxes. ☛ Indian wages and insurance tax credits. Employers can receive a tax credit of up to 20 percent of wages and health insurance for qualified employees who are working and living on Indian reservations.

Does the Federal Government have Contracting Preferences?

Preferences for tribal companies (8(a) Preferences). The Small Business Administration authorizes preferences for minority-owned small businesses in bidding for federal contracts. However, if the company is owned by a tribal 8A company, it receives additional benefits, such as not being subjected to the lower contract amount caps, and sole-source bidding. Preferences for Indian reservation-based businesses (HUBZone Preferences). If a small business is located on Indian lands[MOU1] , and 35 percent of its employees reside on the reservation, the company is eligible for preferences in the awarding of federal contracts. Benefits include competitive and sole-source contracting and a 10 percent price evaluation preference in full and open contract competitions. Preferences on Bureau of Indian Affairs (BIA) and Indian Health Service (IHS) contracts (Buy Indian Act). Because of the unique treaty responsibilities of the United States, BIA and IHS have the authority to give preferences to Indian and tribally owned companies in procurement contracts.

What is a Native American HUBZone?

Indian reservations and other Indian Country locations[MOU1] automatically qualify as HUBZones. Such zones offer investment tax credits, Indian wages and insurance tax credits and targeted accelerated depreciation. A 2020 Supreme Court Ruling the Eastern 1/3 of Oklahoma qualifies as an Indian Reservation.

[MOU1]On reservations?

Do Tribal Owned Companies have access to subsidized financing?

Yes. There are numerous options including Department of Energy, Bureau of Indian Affairs, Department of Agriculture and other programs offer grants and loans.