Territorial Economic Growth and Recovery Act of 2019

Bill: 116-hr-410
Sponsor: full_name: Del. Plaskett, Stacey E. [D-VI-At Large]
Introduced: 2019-01-09
Policy area: Taxation
Subjects: American Samoa

Caribbean area

Guam

Income tax credits

Northern Mariana Islands

Poverty and welfare assistance

Puerto Rico

Tax treatment of families

U.S. territories and protectorates

Virgin Islands

Wages and earnings
Latest action: action_date: 2019-01-09
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2019-01-09
action_desc: Introduced in House
text: <p><strong>Territorial Economic Growth and Recovery Act of 2019</strong></p> <p>This bill directs the Department of the Treasury to pay to U.S.possessions for taxable years beginning after 2018 the cost of the earned tax credit and the child tax credit paid to residents of such possessions. </p>

tv_txt: I 116th CONGRESS 1st Session H. R. 410 IN THE HOUSE OF REPRESENTATIVES January 9, 2019 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 reimbursement for possessions of the United States with respect to the earned income tax credit and the child tax credit.

1. Short title This Act may be cited as the Territorial Economic Growth and Recovery Act of 2019 . 2. Reimbursement of possessions for cost of earned income tax credit (a) Earned income credit Section 32 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (n) Treatment of possessions (1) Payments to possessions (A) Mirror code possession The Secretary of the Treasury shall periodically (but not less frequently than annually) pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (determined without regard to paragraph (2)) with respect to taxable years beginning after December 31, 2018. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. (B) Other possessions The Secretary of the Treasury shall periodically (but no less frequently than annually) pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of this section for taxable years beginning after December 31, 2018, if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession. (2) Coordination with credit allowed against united states income taxes No credit shall be allowed under this section for any taxable year to any person— (A) to whom a credit is allowed against taxes imposed by the possession by reason of this section (determined without regard to this paragraph) for such taxable year, or (B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year. (3) Definitions and special rules (A) Possession of the united states For purposes of this subsection, the term possession of the United States shall include such possessions as are specified in section 937(a)(1) of the Internal Revenue Code of 1986. (B) Mirror code tax system For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States, and such system includes a tax credit substantially identical to the credit allowed under this section. (C) Treatment of payments For purposes of section 1324(b)(2) of title 31, United States Code, or any similar rule of law, any payment made under this subsection shall be treated in the same manner as a refund due from the credit allowed under this section. . (b) Effective date The amendment made by this section shall apply with respect to taxable years beginning after December 31, 2018. 3. Reimbursement of possessions for cost of child tax credit (a) Child tax credit Section 24 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (i) Treatment of possessions (1) Payments to possessions (A) Mirror code possession The Secretary of the Treasury shall periodically (but not less frequently than annually) pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (determined without regard to paragraph (2)) with respect to taxable years beginning after December 31, 2018. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. (B) Other possessions The Secretary of the Treasury shall periodically (but no less frequently than annually) pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of this section for taxable years beginning after December 31, 2018, if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession. (2) Coordination with credit allowed against united states income taxes No credit shall be allowed under this section for any taxable year to any person— (A) to whom a credit is allowed against taxes imposed by the possession by reason of this section (determined without regard to this paragraph) for such taxable year, or (B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year. (3) Definitions and special rules (A) Possession of the united states For purposes of this subsection, the term possession of the United States shall include such possessions as are specified in section 937(a)(1) of the Internal Revenue Code of 1986. (B) Mirror code tax system For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States, and such system includes a tax credit substantially identical to the credit allowed under this section. (C) Treatment of payments For purposes of section 1324(b)(2) of title 31, United States Code, or any similar rule of law, any payment made under this subsection shall be treated in the same manner as a refund due from the credit allowed under this section. . (b) Effective date The amendment made by this section shall apply with respect to taxable years beginning after December 31, 2018.