Territorial Tax Parity and Fairness Act
Sponsored By: Representative Plaskett, Stacey E. [D-VI-At Large]
Introduced
Summary
Treat certain Virgin Islands residents as non‑United States persons for specific federal dividend income rules. The bill would align U.S. tax status with Virgin Islands sourcing rules so dividends from Virgin Islands corporations to qualifying local shareholders are treated under Virgin Islands sourcing for certain gross income inclusion tests.
Show full summary
- Virgin Islands residents and families who are bona fide residents and shareholders would, in some cases, not be treated as United States persons for determining gross income inclusions tied to dividends. That could reduce the amount of U.S. taxable income reported on those dividends.
- Corporations organized under Virgin Islands law would have dividends paid to qualifying resident shareholders treated as Virgin Islands‑sourced for specified federal rules. That changes which tax rules apply to those payments.
- The bill changes Internal Revenue Code section 957(c) by adding a new paragraph and renumbering a cross reference. The rule would apply for foreign corporation tax years beginning after Dec. 31, 2024 and for individual years that end with those corporation years.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Lower U.S. tax for Virgin Islands shareholders
This bill would change how some U.S. Virgin Islands residents are treated for U.S. tax rules. If you live in the Virgin Islands and own shares in a company formed there, you could qualify. If a dividend you receive is treated as income from Virgin Islands sources, you would not be treated as a U.S. person for certain foreign-corporation income rules. That could lower your U.S. tax on those dividends and related inclusions. The change would apply to foreign corporations’ tax years beginning after December 31, 2024, and to your tax year that includes or ends with those years.
Sponsors & CoSponsors
Sponsor
Plaskett, Stacey E. [D-VI-At Large]
VI • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov