Qualifications requisite for Electors of the most nu-
merous Branch of the State Legislature.’’. 
(5) The Organic Act of 1801 placed Wash-
ington, DC, under the exclusive jurisdiction of the 
United States Congress and people in the District 
were no longer considered residents of Virginia or 
Maryland. 
(6) Many in Washington, DC, were immediately 
opposed to the idea of being taxed without congres-
sional representation and over the years several con-
gressional leaders introduced constitutional amend-
ments to give the District of Columbia voting rep-
resentation, though none were successful. 
(7) In 1898, Puerto Rico was acquired by the 
United States and currently has a Resident Commis-
sioner with limited voting rights. Section 933 of the 
Internal Revenue Code of 1986 exempts bona fide 
citizens who are residents of Puerto Rico for the en-
tire taxable year from Federal taxes on income 
earned in Puerto Rico. 
(8) On March 31, 1917, the United States took 
possession of the Virgin Islands and in 1927, the 
territory’s residents were granted citizenship. Under 
section 932 of the Internal Revenue Code of 1986, 
individuals who are bona fide residents of the United 
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States Virgin Islands during the entire taxable year, 
and who fully pay all income tax liabilities to the 
United States Virgin Islands, are not subject to Fed-
eral income taxes on their income. 
(9) Guam was established as a territory of the 
United States after the passage of the Guam Or-
ganic Act of 1950. Under the provisions of section 
935 of the Internal Revenue Code of 1986, residents 
of Guam are required to file tax returns with Guam, 
but not with the United States Federal Government 
and therefore the residents do not have to pay 
United States Federal income taxes. 
(10) The Commonwealth of the Northern Mar-
iana Islands was established in 1975 after residents 
decided not to pursue independence, but instead they 
opted to enter into territory negotiations. The tax 
treatment of the Northern Mariana Islands is simi-
lar to the structure of Guam in that bona fide resi-
dents are not required to pay Federal income taxes. 
(11) American Samoa, which is technically con-
sidered ‘‘unorganized’’ because no Organic Acts have 
been passed by Congress, is governed by section 931 
of the Internal Revenue Code of 1986. Under this 
section, bona fide year-round residents are exempt 
from Federal taxes on income they earn in Samoa, 
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Guam, and Northern Mariana Islands, but are sub-
ject to Federal taxes on income earned elsewhere. 
(12) In keeping with the early history and 
democratic traditions of the United States, the prin-
ciples established in the Constitution, and in con-
formance with the other territories of the United 
States which have delegates but no Representative, 
the residents of the District of Columbia should be 
exempt from paying United States Federal income 
taxes. 
SEC. 3. EXCLUSION FROM GROSS INCOME FOR INCOME 
FROM SOURCES WITHIN THE DISTRICT OF 
COLUMBIA. 
(a) IN GENERAL.—Subpart D of part III of sub-
chapter N of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 938. INCOME FROM SOURCES WITHIN THE DISTRICT 
OF COLUMBIA. 
‘‘(a) GENERAL RULE.—In the case of an individual 
who is a bona fide resident of the District of Columbia 
during the entire taxable year, gross income shall not in-
clude— 
‘‘(1) income derived from sources within the 
District of Columbia, and 
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‘‘(2) income effectively connected with the con-
duct of a trade or business by such individual within 
the District of Columbia. 
‘‘(b) DEDUCTIONS, ETC. ALLOCABLE TO EXCLUDED 
AMOUNTS NOT ALLOWABLE.—An individual shall not be 
allowed— 
‘‘(1) as a deduction from gross income any de-
ductions (other than the deduction under section 
151, relating to personal exemptions), or 
‘‘(2) any credit, properly allocable or chargeable 
against amounts excluded from gross income under 
this section. 
‘‘(c) BONA FIDE RESIDENT AND OTHER APPLICA-
BLE RULES.—For purposes of this section, rules similar 
to the rules of section 876, 937, 957(c), 3401(a)(8)(D), 
and 7654 shall apply.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part III of subchapter N of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 938. Income from sources within the District of Columbia.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
Æ 
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