Territorial Tax Parity Act of 2016

Bill: 114-hr-5039
Sponsor: full_name: Del. Plaskett, Stacey E. [D-VI-At Large]
Introduced: 2016-04-21
Policy area: Taxation
Subjects: American Samoa

Caribbean area

Guam

Northern Mariana Islands

Puerto Rico

Tax administration and collection, taxpayers

Taxation of foreign income

U.S. territories and protectorates

Virgin Islands
Latest action: action_date: 2016-04-21
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2016-04-21
action_desc: Introduced in House
text: <p><b>Territorial Tax Parity Act of 2016 </b></p> <p>This bill amends the Internal Revenue Code to modify the income source rules involving U.S. possessions, including Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands. </p> <p>Under current law, income is not considered to be possession source income if it is treated as income: (1) from sources within the United States, or (2) effectively connected with the conduct of a trade or business within the United States. The bill amends this rule to specify that it applies to the extent that the income is attributable to an office or fixed place of business within the United States. </p> <p>The bill also revises the source rules for personal property sales. The Internal Revenue Service may limit the application in the Virgin Islands of requirements for U.S. citizens and resident aliens to pay a tax to a foreign country to be considered a nonresident of the United States for certain personal property sales. </p>

tv_txt: I 114th CONGRESS 2d Session H. R. 5039 IN THE HOUSE OF REPRESENTATIVES April 21, 2016 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 for economic recovery in the possessions of the United States.

1. Short title This Act may be cited as the Territorial Tax Parity Act of 2016 . 2. Modification to source rules involving possessions (a) Source rules Section 937(b)(2) of the Internal Revenue Code of 1986 is amended by striking the period at the end and inserting the following: to the extent such income is attributable to an office or fixed place of business within the United States (determined under the rules of section 864(c)(5)). . (b) Source rules for personal property sales Section 865(j)(3) of such Code is amended by adding 932, after 931, and before 933. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.