Territorial Tax Equity and Economic Growth Act 2017-01-03 Introduced in House Territorial Tax Equity and Economic Growth Act

This bill amends the Internal Revenue Code to modify the residence and income source rules involving U.S. possessions, including Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands.

The bill specifies that a bona fide resident of a possession is a person who has a substantial presence in the possession for at least 122 days during the calendar year. (Under current law, the person must be present for at least 183 days during the year.)

(Under current law, income is not considered to be possession source income if it is treated as: [1] income from sources within the United States, or [2] as 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. Income from activities within the United States which are of a preparatory or auxiliary character may not be treated as income from sources within the United States or as effectively connected with the conduct of a trade or business within the United States.

The bill specifies principles that must be used to determine whether income from sources without a possession is effectively connected with the conduct of a trade or business within the possession.

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.

]]> text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Congressional Research Service, Library of Congress This file contains bill summaries for federal legislation. A bill summary describes the most significant provisions of a piece of legislation and details the effects the legislative text may have on current law and federal programs. Bill summaries are authored by the Congressional Research Service (CRS) of the Library of Congress. As stated in Public Law 91-510 (2 USC 166 (d)(6)), one of the duties of CRS is "to prepare summaries and digests of bills and resolutions of a public general nature introduced in the Senate or House of Representatives". For more information, refer to the User Guide that accompanies this file.