H.R. 365 · 119th Congress
Territorial Tax Parity Act of 2025
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PlaskettSponsorNo cosponsors.
This bill modifies the income sourcing rules related to taxation of income from U.S. territories.
What it does: CRS summary · Introduced in House · Jan 13, 2025
Territorial Tax Equity Parity Act of 2025
This bill modifies the income sourcing rules related to taxation of income from U.S. territories.
Under the bill, income is U.S.-sourced income or effectively connected to a U.S. trade or business only if attributable to an office or fixed place of business in the United States. (Currently, income is sourced to a U.S. territory and, thus, may be excluded from the gross income of a bona fide resident of a U.S. territory in calculating U.S. federal income tax if it is not U.S.-sourced income or effectively connected with a U.S. trade or business.)
Further, the bill authorizes the Internal Revenue Service (IRS) to limit the income tax payment to the Virgin Islands required to treat income from the sale of certain personal property as foreign-sourced income for federal tax purposes. (Currently, income from certain personal property sales from a fixed place of business in a U.S. territory by a U.S. resident may be U.S.-sourced income unless an income tax of at least 10% is paid to the U.S. territory. The Internal Revenue Service (IRS) may limit the 10% tax payment requirement related to income from personal property sales in Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico.)
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: Territorial Tax Parity Act of 2025
Latest action (Jan 13, 2025): Referred to the House Committee on Ways and Means.
Policy area: Taxation · Origin: House · Introduced: Jan 13, 2025
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
No recorded floor vote found.