48 U.S.C. § 1843: Exemption from taxation for…

Summary

People and organizations that live in or are set up under the laws of the Northern Mariana Islands do not have to follow the rules in section 601 for income earned inside the Northern Mariana Islands for certain years. That exemption applies to tax years starting after December 31, 1978 and lasts until, but not after, January 1, 1985. It does not excuse them from following section 601 for income earned outside the Northern Mariana Islands. Also, for tax years beginning after December 31, 1980 and before January 1, 1982, the same exemption applies for income from inside the Northern Mariana Islands, but only if the Secretary gets a written notice from the Governor by September 30, 1980 saying that sections 1–5 of chapter 2 of Public Law 1–30 (or its successor) were repealed effective December 31, 1981. Starting January 1, 1985, any “rebate of any taxes” under section 602 of Public Law 94–241 only covers taxes actually paid under section 601. A rebate cannot be more than the tax actually paid for a tax year, and it can be paid only after that tax year ends. From January 1, 1985, the Commonwealth must keep a public record of each person who gets a rebate, including their name, address, the rebate amount, and the year the rebate was for.

Title 48, §1843

Territories and Insular Possessions, Source: USLM XML via OLRC

(a)Taxable years beginning after December 31, 1978, but not after January 1, 1985

Except as provided in subsection (c), any person, including an individual, trust, estate, partnership, association, company, or corporation, which is a resident of or which is organized under the laws of the Commonwealth of the Northern Mariana Islands and which is subject to the provisions of section 601 of the Covenant to Establish the Commonwealth of the Northern Mariana Islands in Political Union with the United States (Public Law 94–241), shall be exempted from the requirements of such section with respect to income derived from sources within the Commonwealth of the Northern Mariana Islands for taxable years beginning after December 31, 1978, until, but not after, January 1, 1985. Nothing in this section shall be construed as relieving such person from the obligation to comply with the requirements of section 601 with respect to income derived from sources outside of the Commonwealth of the Northern Mariana Islands.

(b)Taxable years beginning after December 31, 1980, and before January 1, 1982

Except as provided in subsection (c), any person, including an individual, trust, estate, partnership, association, company, or corporation, which is a resident of or which is organized under the laws of the Commonwealth of the Northern Mariana Islands and which is subject to the provisions of section 601 of the Covenant to Establish the Commonwealth of the Northern Mariana Islands (Public Law 94–241), shall be exempt from the requirements of such section with respect to income from sources within the Northern Mariana Islands for its taxable year beginning after December 31, 1980, and before January 1, 1982: Provided, That the Secretary receives written notice from the Governor of the Northern Mariana Islands not later than September 30, 1980, that section 1, 2, 3, 4, and 5 of chapter 2 of Public Law 1–30 of the Commonwealth of the Northern Mariana Islands or its successor, have been repealed in their entirety, effective December 31, 1981.

(c)Tax rebates

As provided in section 602 of Public Law 94–241 (90 Stat. 263, 270) the term “rebate of any taxes” shall, effective January 1, 1985, apply only to the extent taxes have actually been paid pursuant to section 601 of said Act, shall not exceed the amount of tax actually paid for any tax year, and may only be paid following the close of the tax year involved. Notwithstanding any other provision of law, effective January 1, 1985, the Commonwealth of the Northern Mariana Islands shall maintain, as a matter of public record, the name and address of each person receiving such a rebate, together with the amount of the rebate, and the year for which such rebate was made.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Covenant, referred to in subsecs. (a) and (b), is the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America, which is contained in section 1 of Pub. L. 94–241, set out as a note under section 1801 of this title. Public Law 94–241, referred to in subsecs. (a) and (b), is Pub. L. 94–241, Mar. 24, 1976, 90 Stat. 263, as amended, which is classified generally to subchapter I (§ 1801 et seq.) of this chapter. For complete classification of this Act to the Code, see Tables. section 601 and 602 of Public Law 94–241, referred to in subsec. (c), probably mean section 601 and 602 of the Covenant, because Pub. L. 94–241 does not contain a section 601 or 602. Codification Section was formerly set out as a note under section 1681 of this title.

Amendments

1983—Subsec. (a). Pub. L. 98–213, § 3(a), substituted “1985” for “1983”. Subsec. (c). Pub. L. 98–213, § 3(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “It is the sense of Congress that the term ‘rebate’ as used in section 602 of Public Law 94–241 does not permit the abatement of taxes.” 1980—Subsec. (a). Pub. L. 96–597 substituted “until, but not after,

January 1, 1983.” for “and before

January 1, 1981.”.

Statutory Notes and Related Subsidiaries

Suspension of Prohibition of Abatement of Taxation in Commonwealth of Northern Mariana Islands Pub. L. 96–597, title III, § 303(b), Dec. 24, 1980, 94 Stat. 3478, provided that provisions of subsec. (c) of this section were suspended and were of no force or effect until Jan. 1, 1983.

§1843 Exemption From Taxation for Income Derived From Sources Within Commonwealth