Indian Economic Development Act of 1989

Indian Economic Development Act of 1989 - Amends the Internal Revenue Code to allow businesses an additional investment tax credit for investment in certain tangible property located on Indian reservations. Limits such credit to five percent for reservation personal property, 20 percent for new reservation construction property, and ten percent for reservation infrastructure investment. Provides for the recapture of such credit upon the early disposition of the property.

Provides for the nonrecognition of gains on the sale or exchange of Indian reservation property where reinvestment in such property occurs within one year.

Makes members of Indian tribes living in Indian reservation areas subject to pervasive poverty and unemployment eligible for the targeted jobs tax credit.

Allows an income tax credit in an amount equal to the tax attributable to income received on the reservation from an Indian reservation business. Prohibits such a credit against environmental, accumulated earnings, and personal holding company taxes. Sets forth eligibility requirements for such credits.