All Roll Calls
Yes: 423 • No: 1
119-hr-33119th CongressWALLET
To amend the Internal Revenue Code of 1986 to provide special rules for the taxation of certain residents of Taiwan with income from sources within the United States.
Sponsored By: Representative Smith, Jason [R-MO-8]
Passed House
Summary
This bill would create special U.S. tax rules for qualified residents of Taiwan and set a framework for a narrowly framed bilateral tax agreement. It replaces some standard U.S. withholding rules and defines who qualifies for reduced rates and exemptions.
Show full summary
- Taiwan workers and short‑term performers: Qualified wages paid by non‑U.S. employers for services performed in the United States would not be subject to U.S. tax or withholding when the worker is a non‑U.S. person and the pay is not borne by a U.S. permanent establishment. Entertainment and athletic income is exempt if annual gross receipts do not exceed $30,000, with listed exclusions such as directors' fees and student or trainee pay.
- Investors and Taiwan firms: The bill sets a default applicable withholding percentage of 10 percent and treats most dividends at 15 percent unless a 12‑month, 10 percent ownership test or Taiwan corporate taxation reduces the rate to 10 percent. It also ties income from a Taiwan permanent establishment to U.S. effectively connected tax rules and sets the branch profits tax at 10 percent.
- Treaty process and oversight: The President would be authorized to negotiate a Taiwan tax agreement that must conform to the 2016 U.S. Model Income Tax Convention. Any agreement would require specified implementing and approval legislation and structured congressional consultation, publication, and reporting requirements.
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 2 benefits, 0 costs, 3 mixed.
Tax relief for Taiwan workers and performers
If enacted, certain “qualified wages” paid to a Taiwan resident worker would not face U.S. tax or withholding. The pay must be from a non‑U.S. employer and not charged to a U.S. permanent establishment, and the worker must be a non‑U.S. resident or crew on an international ship or aircraft. Some pay would not qualify, like directors’ fees, entertainer income, student or trainee pay, pensions, and U.S. government wages. Separately, Taiwan entertainers and athletes would owe no U.S. tax or withholding if their U.S. receipts are $30,000 or less for the year, unless the income is wages or tied to a U.S. permanent establishment.
Lower U.S. withholding for Taiwan investors and companies
If enacted, many U.S.-source payments to qualified Taiwan residents and companies would face lower withholding. Most interest, royalties, and similar payments would be 10% instead of 30%. Dividends would be 15%, or 10% if a Taiwan corporation owns at least 10% of the payer for 12 months. The lower rates would not apply to some items, like most REIT dividends to larger holders, U.S. real‑property amounts, some expatriated‑company payments, and certain REMIC amounts.
Lower branch tax for Taiwan companies
If enacted, qualified Taiwan corporations would pay a 10% branch profits tax instead of 30%. Income tied to a U.S. permanent establishment would be taxed under normal U.S. rules for effectively connected income. Only income linked to that U.S. presence would count. Sales of U.S. real property would use the same permanent‑establishment framing. The impact could raise or lower total tax depending on each company’s facts.
Who qualifies for Taiwan tax relief
If enacted, the bill would define who is a “qualified resident of Taiwan” and what counts as a U.S. permanent establishment. It would add a dual‑resident tie‑breaker so some non‑U.S. citizens living in the U.S. could be treated as Taiwan residents for these rules. Taiwan companies would need to pass limitation‑on‑benefits tests to use the lower rates. Tests include 50% Taiwan ownership and an income test, being publicly traded in Taiwan, or being owned by up to five qualifying owners.
Steps to make a Taiwan tax deal
If enacted, the President could start talks for a Taiwan tax deal after a Treasury finding. The President would need to give Congress 15 days’ notice before starting talks and publish the draft 60 days before entering a deal. Briefings would be due within 90 days after talks start and every 180 days. Within 270 days after entering a deal, the final text and a plan to change laws and carry it out would be sent to Congress. Any deal would need to follow the usual U.S. model treaty and could not override the tax code unless Congress clearly says so. Later Taiwan tax deals would be handled the same way. Extra Taiwan tax relief would come only after a deal takes effect.
Sponsors & CoSponsors
Sponsor
Smith, Jason [R-MO-8]
MO • R
Cosponsors
Rep. Neal, Richard E. [D-MA-1]
MA • D
Sponsored 1/3/2025
Rep. Buchanan, Vern [R-FL-16]
FL • R
Sponsored 1/6/2025
Rep. Doggett, Lloyd [D-TX-37]
TX • D
Sponsored 1/6/2025
Rep. Smith, Adrian [R-NE-3]
NE • R
Sponsored 1/6/2025
Rep. Thompson, Mike [D-CA-4]
CA • D
Sponsored 1/6/2025
Rep. Kelly, Mike [R-PA-16]
PA • R
Sponsored 1/6/2025
Rep. Sánchez, Linda T. [D-CA-38]
CA • D
Sponsored 1/6/2025
Rep. LaHood, Darin [R-IL-16]
IL • R
Sponsored 1/6/2025
Rep. Sewell, Terri A. [D-AL-7]
AL • D
Sponsored 1/6/2025
Rep. Estes, Ron [R-KS-4]
KS • R
Sponsored 1/6/2025
Rep. DelBene, Suzan K. [D-WA-1]
WA • D
Sponsored 1/6/2025
Rep. Smucker, Lloyd [R-PA-11]
PA • R
Sponsored 1/6/2025
Rep. Chu, Judy [D-CA-28]
CA • D
Sponsored 1/6/2025
Rep. Hern, Kevin [R-OK-1]
OK • R
Sponsored 1/6/2025
Rep. Moore, Gwen [D-WI-4]
WI • D
Sponsored 1/6/2025
Rep. Miller, Carol D. [R-WV-1]
WV • R
Sponsored 1/6/2025
Rep. Beyer, Donald S. [D-VA-8]
VA • D
Sponsored 1/6/2025
Rep. Murphy, Gregory F. [R-NC-3]
NC • R
Sponsored 1/6/2025
Rep. Panetta, Jimmy [D-CA-19]
CA • D
Sponsored 1/6/2025
Rep. Fitzpatrick, Brian K. [R-PA-1]
PA • R
Sponsored 1/6/2025
Rep. Horsford, Steven [D-NV-4]
NV • D
Sponsored 1/6/2025
Rep. Tenney, Claudia [R-NY-24]
NY • R
Sponsored 1/6/2025
Rep. Suozzi, Thomas R. [D-NY-3]
NY • D
Sponsored 1/6/2025
Rep. Fischbach, Michelle [R-MN-7]
MN • R
Sponsored 1/6/2025
Rep. Moore, Blake D. [R-UT-1]
UT • R
Sponsored 1/6/2025
Rep. Van Duyne, Beth [R-TX-24]
TX • R
Sponsored 1/6/2025
Rep. Feenstra, Randy [R-IA-4]
IA • R
Sponsored 1/6/2025
Rep. Malliotakis, Nicole [R-NY-11]
NY • R
Sponsored 1/6/2025
Rep. Carey, Mike [R-OH-15]
OH • R
Sponsored 1/6/2025
Rep. Yakym, Rudy [R-IN-2]
IN • R
Sponsored 1/6/2025
Rep. Miller, Max L. [R-OH-7]
OH • R
Sponsored 1/6/2025
Rep. Gomez, Jimmy [D-CA-34]
CA • D
Sponsored 1/6/2025
Rep. Bean, Aaron [R-FL-4]
FL • R
Sponsored 1/6/2025
Rep. Moran, Nathaniel [R-TX-1]
TX • R
Sponsored 1/6/2025
Rep. Finstad, Brad [R-MN-1]
MN • R
Sponsored 1/7/2025
Rep. Houchin, Erin [R-IN-9]
IN • R
Sponsored 1/7/2025
Rep. Lawler, Michael [R-NY-17]
NY • R
Sponsored 1/9/2025
Rep. Goldman, Craig A. [R-TX-12]
TX • R
Sponsored 1/13/2025
Rep. Gottheimer, Josh [D-NJ-5]
NJ • D
Sponsored 1/13/2025
Rep. Carter, Earl L. "Buddy" [R-GA-1]
GA • R
Sponsored 1/13/2025
Rep. Stanton, Greg [D-AZ-4]
AZ • D
Sponsored 1/13/2025
Rep. Nunn, Zachary [R-IA-3]
IA • R
Sponsored 1/13/2025
Rep. Johnson, Dusty [R-SD-At Large]
SD • R
Sponsored 1/13/2025
Rep. Barr, Andy [R-KY-6]
KY • R
Sponsored 1/13/2025
Rep. Gooden, Lance [R-TX-5]
TX • R
Sponsored 1/13/2025
Del. Plaskett, Stacey E. [D-VI-At Large]
VI • D
Sponsored 1/14/2025
Roll Call Votes
house vote • 1/15/2025
On Passage
Yes: 423 • No: 1