Tribes cannot use tax-exempt financing to build convention halls.(TAX-FREE BONDS)

Kiplinger Tax Letter, The, February, 2007

Tribes can't use tax-exempt financing to build convention halls, even when the bonds are issued by governments, IRS says privately. Previously, IRS had ruled the tribes themselves can't issue exempt bonds to construct convention facilities and luxury hotels near their casinos. Now the Service nixes an Indian tribe's bid to get around this prohibition by having a municipality issue the bonds and being the conduit borrower.

A court test is likely. At least 15 state and local governments have issued tax-exempts to build their own convention centers and hotels since 1995. Tribes think that they should get the same tax treatment.