Title: To amend the Internal Revenue Code of 1986 to provide that certain bona fide residents of the Virgin Islands who are shareholders of corporations organized under the laws of the Virgin Islands are not treated as United States persons for purposes of determining certain inclusions in gross income with respect to such corporations.
Policy area: Taxation

Summary:
This bill sets forth a tax rule with respect to certain bona fide residents of the U.S. Virgin Islands who are shareholders of corporations organized under the laws of the Virgin Islands. It provides that such residents shall not be treated as U.S. persons for purposes of determining inclusions in gross income with respect to such corporations.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1427 Introduced in House (IH)]

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117th CONGRESS
  1st Session
                                H. R. 1427

To amend the Internal Revenue Code of 1986 to provide that certain bona 
     fide residents of the Virgin Islands who are shareholders of 
  corporations organized under the laws of the Virgin Islands are not 
 treated as United States persons for purposes of determining certain 
     inclusions in gross income with respect to such corporations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 26, 2021

 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 provide that certain bona 
     fide residents of the Virgin Islands who are shareholders of 
  corporations organized under the laws of the Virgin Islands are not 
 treated as United States persons for purposes of determining certain 
     inclusions in gross income with respect to such corporations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CERTAIN BONA FIDE RESIDENTS OF VIRGIN ISLANDS NOT TREATED AS 
              UNITED STATES SHAREHOLDERS OF CORPORATIONS ORGANIZED IN 
              THE VIRGIN ISLANDS.

    (a) In General.--Section 957(c) of the Internal Revenue Code of 
1986 is amended by striking ``and'' at the end of paragraph (1), by 
redesignating paragraph (2) as paragraph (3), and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) with respect to a corporation organized under the 
        laws of the Virgin Islands, such term does not include an 
        individual who is a bona fide resident of the Virgin Islands, 
        if a dividend received by such individual during the taxable 
        year from such corporation would, for purposes of section 
        934(b)(1), be treated as income derived from sources within the 
        Virgin Islands, and''.
    (b) Conforming Amendment.--Section 957(c) of such Code is amended 
by striking ``paragraph (2)'' in the last sentence and inserting 
``paragraph (3)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after December 
31, 2020, and taxable years of individuals within which or with which 
such taxable years of foreign corporations end.
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