Bill Details
View committees (1)
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would make a small change to the federal tax rules for sales of personal property in U.S. territories and other possessions. It updates a part of the tax code so that one more territorial tax rule is included when deciding where this type of income is counted. The goal is to better align tax treatment in the territories and provide clearer rules for businesses and people who sell goods there. The change would apply to tax years starting after December 31, 2023.
- It changes the Internal Revenue Code rule that helps decide where income from sales of personal property is treated as coming from.
- The update adds another territorial tax section to the existing rule, which may affect tax treatment in U.S. possessions such as Puerto Rico and other territories covered by those rules.
- The bill is meant to improve clarity and make the tax rules more consistent for these areas.
- The change would take effect for tax years beginning after December 31, 2023.
Official Summaries
Territorial Tax Parity and Clarification Act
This bill authorizes the Internal Revenue Service (IRS) to limit the income tax payment to the Virgin Islands required to treat income from the sale of certain personal property as foreign-sourced income for federal tax purposes.
As background, income from certain personal property sales from a fixed place of business in a U.S. territory by a U.S. resident may be U.S.-sourced income unless an income tax of at least 10% is paid to the U.S. territory. Under current law, the IRS may limit the 10% tax payment requirement related to income from such personal property sales in Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico.
This bill expands the IRS’s authority to include limiting the tax requirement for personal property sales in the Virgin Islands.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 367 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 367
To amend the Internal Revenue Code of 1986 to modify the source rules
for personal property sales in possessions of the United States.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 13, 2025
Ms. Plaskett introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the source rules
for personal property sales in possessions of the United States.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Territorial Tax Parity and
Clarification Act''.
SEC. 2. MODIFICATION OF SOURCE RULES FOR PERSONAL PROPERTY SALES IN
POSSESSIONS.
(a) In General.--Section 865(j)(3) of the Internal Revenue Code of
1986 is amended by inserting ``, 932,'' after ``931''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
<all>