Title 26 — Internal Revenue Code
Part III · Chapter 1 — Normal Taxes and Surtaxes
§ 931. Income from sources within Guam, American Samoa, or the Northern Mariana Islands
Statutory text
General rule
In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include—
income derived from sources within any specified possession, and
income effectively connected with the conduct of a trade or business by such individual within any specified possession.
Deductions, etc. allocable to excluded amounts not allowable
An individual shall not be allowed—
as a deduction from gross income any deductions (other than the deduction under section 151, relating to personal exemptions), or
any credit,
properly allocable or chargeable against amounts excluded from gross income under this section.
Specified possession
For purposes of this section, the term “specified possession” means Guam, American Samoa, and the Northern Mariana Islands.
Employees of the United States
Amounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (1) or (2) of subsection (a).
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 291 · 68A Stat. 291
Enacted · 26 U.S.C. § 931
Aug. 16, 1954, ch. 736, 68A Stat. 291
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 291Foreign Investors Tax Act of 1966
Pub. L. 89–809 title I § 107(a) · 80 Stat. 1539
Changed · 26 U.S.C. § 931
Pub. L. 89–809 made applicable to United States citizens and domestic corporations engaged in trade or business in possessions, who qualify for the special tax treatment of income qualifying for the exclusion relating to income from United States possessions, provisions which allow deductions to nonresident aliens or foreign corporations engaged in trade or business in the United States by allowing deductions only where they are allocable to income effectively connected with the trade or business in the United States and by spelling out the exceptions allowing deductions whether or not connected with income from sources within the United States in the case of losses not connected with the trade or business but incurred in transactions entered into for profit, casualty losses, and charitable contributions
Source evidence
Code amendment note
Subsec (d). Pub. L. 89–809 made applicable to United States citizens and domestic corporations engaged in trade or business in possessions, who qualify for the special tax treatment of income qualifying for the exclusion relating to income from United States possessions, provisions which allow deductions to nonresident aliens or foreign corporations engaged in trade or business in the United States by allowing deductions only where they are allocable to income effectively connected with the trade or business in the United States and by spelling out the exceptions allowing deductions whether or not connected with income from sources within the United States in the case of losses not connected with the trade or business but incurred in transactions entered into for profit, casualty losses, and charitable contributions.Enacted provision · exact public law section
(a) Deductions.— Subsection (d) of section 931 (relating to deductions) 68A Stat. 291. is amended to read as follows: “(d) Deductions.— “(1) General rule.— Except as otherwise provided in this subsection and subsection (e), in the case of persons entitled to the benefits of this section the deductions shall be allowed only if and to the extent that they are connected with income from sources within the United States; and the proper apportionment and allocation of the deductions with respect to sources of income within and without the United States shall be determined as provided in part I, under regulations prescribed by the Secretary or his 26 USC 861–864. delegate. “(2) Exceptions.— The following deductions shall be allowed whether or not they are connected with income from sources within the United States: “(A) The deduction, for losses not connected with the trade or business if incurred in transactions entered into for profit, allowed by section 165(c)(2), but only if the profit, if such transaction had resulted in a profit, would be taxable under this subtitle. “(B) The deduction, for losses of property not connected with the trade or business if arising from certain casualties or theft, allowed by section 165(c)(3), but only if the loss is 78 Stat. 43. of property within the United States. “(C) The deduction for charitable contributions and gifts allowed by section 170. “(3) Deduction disallowed.— “For disallowance of standard deduction, see section 142(b)(2).”Revenue Act of 1971
Pub. L. 92–178 title V § 502(d) · 85 Stat. 494
Changed · 26 U.S.C. § 931(a)
Pub. L. 92–178 provided for non-application of section in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC
Source evidence
Code amendment note
Subsec. (a). Pub. L. 92–178 provided for non-application of section in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC.Enacted provision · exact public law section
(d) Income From Sources Within Possessions of the United States.— Section 931(a) (relating to the general rule applicable to income from sources within possessions of the United States) is amended by adding at the end thereof the following: “This section shall not apply in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC (as defined in section 992 (a)).”Pub. L. 92–606 § 1(f)(1) · 86 Stat. 1494
Substituted · 26 U.S.C. § 931(c)
Pub. L. 92–606 substituted “Puerto Rico or Guam” for “Puerto Rico”
Source evidence
Code amendment note
Subsec. (c). Pub. L. 92–606 substituted “Puerto Rico or Guam” for “Puerto Rico”.Enacted provision · exact public law section
(1) Section 931(c) of the Internal Revenue Code of 1954 68A Stat. 291. (relating to income from sources within possessions of the United States) is amended by inserting “or Guam” after “Puerto Rico”.Pub. L. 94–455 § 1051(c)(1) · 90 Stat. 1520
Struck · 26 U.S.C. § 931(a)
Pub. L. 94–455, § 1051(c)(1), struck out all references to domestic corporations and made subsection applicable only to individual citizens
Source evidence
Code amendment note
Subsec. (a). Pub. L. 94–455, § 1051(c)(1), struck out all references to domestic corporations and made subsection applicable only to individual citizens.Enacted provision · exact public law section
(1) Subsection (a) of section 931 (relating to genera) rule in 26 USC 931. the case of income from sources within possessions of the United Stales) is amended to read as follows: “(a) General Rule.— In the ease of individual citizens of the United States, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragraph (2) arc satisfied: “(1) 3-year period.— If 80 percent or more of the gross income of such citizen (computed without the benefit of this section) for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and “(2) Trade or business.— If 50 percent or more of his gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another.”,Pub. L. 94–455 § 1051(c)(2) · 90 Stat. 1520
Substituted · 26 U.S.C. § 931(c)
Pub. L. 94–455, § 1051(c)(2), substituted “Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam” for “Virgin Islands of the United States, and such term when used with respect to citizens of the United States does not include Puerto Rico or Guam” after “does not include the”
Source evidence
Code amendment note
Subsec. (c). Pub. L. 94–455, § 1051(c)(2), substituted “Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam” for “Virgin Islands of the United States, and such term when used with respect to citizens of the United States does not include Puerto Rico or Guam” after “does not include the”.Enacted provision · exact public law section
(2) Subsection (e) of section 931 (defining the term “possession”) is amended to read as follows: “(c) Definition.— For purposes of this section, the term ‘possession of the United States’ does not include the Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam.”.Pub. L. 94–455 title X § 1051(c) · 90 Stat. 1520
Substituted · 26 U.S.C. § 931(d)(1)
Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “a citizen of the United States” for “persons” after “in the case of”
Struck · 26 U.S.C. § 931(d)(1)
Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), struck out “or his delegate” after “Secretary”
Source evidence
Code amendment note
Subsec. (d)(1). Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “a citizen of the United States” for “persons” after “in the case of” and struck out “or his delegate” after “Secretary”.Enacted provision · exact public law section
(c) Amendments of Section 931.— (1) Subsection (a) of section 931 (relating to genera) rule in 26 USC 931. the case of income from sources within possessions of the United Stales) is amended to read as follows: “(a) General Rule.— In the ease of individual citizens of the United States, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragraph (2) arc satisfied: “(1) 3-year period.— If 80 percent or more of the gross income of such citizen (computed without the benefit of this section) for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and “(2) Trade or business.— If 50 percent or more of his gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another.”, (2) Subsection (e) of section 931 (defining the term “possession”) is amended to read as follows: “(c) Definition.— For purposes of this section, the term ‘possession of the United States’ does not include the Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam.”. (3) Subsections (d). (e). and (f) of section 931 are each amended by striking out “persons” each place it appeal’s and inserting in lieu thereof “a citizen of the United States”.Pub. L. 94–455 title X § 1051(c) · 90 Stat. 1520
Substituted · 26 U.S.C. § 931(f)
Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “A citizen of the United States” for “Persons” after “Allowance of deductions and credits”
Struck · 26 U.S.C. § 931(f)
Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), struck out in two places “or his delegate” after “Secretary”
Source evidence
Code amendment note
Subsec. (f). Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “A citizen of the United States” for “Persons” after “Allowance of deductions and credits” and struck out in two places “or his delegate” after “Secretary”.Enacted provision · exact public law section
(c) Amendments of Section 931.— (1) Subsection (a) of section 931 (relating to genera) rule in 26 USC 931. the case of income from sources within possessions of the United Stales) is amended to read as follows: “(a) General Rule.— In the ease of individual citizens of the United States, gross income means only gross income from sources within the United States if the conditions of both paragraph (1) and paragraph (2) arc satisfied: “(1) 3-year period.— If 80 percent or more of the gross income of such citizen (computed without the benefit of this section) for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States; and “(2) Trade or business.— If 50 percent or more of his gross income (computed without the benefit of this section) for such period or such part thereof was derived from the active conduct of a trade or business within a possession of the United States either on his own account or as an employee or agent of another.”, (2) Subsection (e) of section 931 (defining the term “possession”) is amended to read as follows: “(c) Definition.— For purposes of this section, the term ‘possession of the United States’ does not include the Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam.”. (3) Subsections (d). (e). and (f) of section 931 are each amended by striking out “persons” each place it appeal’s and inserting in lieu thereof “a citizen of the United States”.Pub. L. 94–455 § 1901(a)(117) · 90 Stat. 1520
Redesignated · 26 U.S.C. § 931(h); 26 U.S.C. § 931(i)
Pub. L. 94–455, § 1901(a)(117), redesignated subsec. (i) as (h). Former subsec. (h), relating to the status of a citizen of the United States who has been interned by the enemy, was struck out
Source evidence
Code amendment note
Subsecs. (h), (i). Pub. L. 94–455, § 1901(a)(117), redesignated subsec. (i) as (h). Former subsec. (h), relating to the status of a citizen of the United States who has been interned by the enemy, was struck out.Enacted provision · exact public law section
(117) Amendments of section 931.— Section 931 (relating to income from sources within possession) is amended by striking out subsection (h) (relating to certain persons taken as prisoners of war while working in a possession), and by redesignating subsection (i) as subsection (h).Tax Reduction and Simplification Act of 1977
Pub. L. 95–30 title I § 101(d)(12) · 91 Stat. 126
Struck · 26 U.S.C. § 931(d)(3)
Pub. L. 95–30 struck out par. (3) which made a cross reference to section 142(b)(2) for disallowance of the standard deduction
Source evidence
Code amendment note
Subsec. (d)(3). Pub. L. 95–30 struck out par. (3) which made a cross reference to section 142(b)(2) for disallowance of the standard deduction.Enacted provision · exact public law section
(12) Paragraph (3) of section 931 (d) (relating to deductions in computing income from sources within possessions of the United States) is hereby repealed.Tax Reform Act of 1984
Pub. L. 98–369 div. A title VII § 711(c)(2)(A)(iv) · 98 Stat. 494
Substituted · 26 U.S.C. § 931(d)(2)(B)
Pub. L. 98–369 substituted “for losses” for “, for losses of property not connected with the trade or business if arising from certain casualties or theft,”
Source evidence
Code amendment note
Subsec. (d)(2)(B). Pub. L. 98–369 substituted “for losses” for “, for losses of property not connected with the trade or business if arising from certain casualties or theft,”.Enacted provision · exact public law section
(iv) Sections 873(b)(1) and 931(d)(2)(B) are each 26 USC 873, 931. amended by striking out “, for losses of property not connected with the trade or business if arising from certain casualties or theft,” and inserting in lieu thereof “for losses”.Tax Reform Act of 1986
Pub. L. 99–514 title XII § 1272(a) · 100 Stat. 2085
Amended · 26 U.S.C. § 931
Pub. L. 99–514 amended section generally
Substituted · 26 U.S.C. § 931
Pub. L. 99–514 substituting provisions relating to income from sources within Guam, American Samoa, or the Northern Mariana Islands, for former provisions relating to income from sources within possessions of the United States, which had declared in: subsec. (a), general rule as to gross income, including requirements relating to 3-year period and trade or business; subsec. (b), rule as to amounts received in United States; subsec. (c), definition of “possession of the United States”; subsec. (d), general rule allowing deductions only to extent connected with income from sources within United States, and specific exceptions to limitations of general rule; subsec. (e), deduction for personal exemption; subsec. (f), allowance of deductions and credits; subsec. (g), foreign tax credit; subsec. (h), provisions relating to employees of United States
Source evidence
Code amendment note
Pub. L. 99–514 amended section generally, substituting provisions relating to income from sources within Guam, American Samoa, or the Northern Mariana Islands, for former provisions relating to income from sources within possessions of the United States, which had declared in: subsec. (a), general rule as to gross income, including requirements relating to 3-year period and trade or business; subsec. (b), rule as to amounts received in United States; subsec. (c), definition of “possession of the United States”; subsec. (d), general rule allowing deductions only to extent connected with income from sources within United States, and specific exceptions to limitations of general rule; subsec. (e), deduction for personal exemption; subsec. (f), allowance of deductions and credits; subsec. (g), foreign tax credit; subsec. (h), provisions relating to employees of United States.Enacted provision · exact public law section
(a) In General.— Section 931 (relating to income from sources within possessions of the United States) is amended to read as follows: “SEC. 931. INCOME FROM SOURCES WITHIN GUAM, AMERICAN SAMOA. OR THE NORTHERN MARIANA ISLANDS. “(a) General Rule.— In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include— “(1) income derived from sources within any specified possession, and “(2) income effectively connected with the conduct of a trade or business by such individual within any specified possession. “(b) Deductions, Etc. Allocable to Excluded Amounts Not Allowable.— An individual shall not be allowed— “(1) as a deduction from gross income any deductions (other than the deduction under section 151. relating to personal exemptions), or “(2) any credit. properly allocable or chargeable against amounts excluded from gross income under this section. “(c) Specified Possession.— For purposes of this section, the term ‘specified possession’ means Guam, American Samoa, and the Northern Mariana Islands. “(d) Special Rules.— For purposes of this section— “(1) Employees of the united states.— Amounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (11 or 12) of subsection (a). “(2) Determination of source, etc.— The determination as to whether income is described in paragraph (1) or (2) of subsection (a) shall be made under regulations prescribed by the Secretary. “(3) Determination of residency.— For purposes of this section and section 876, the determination of whether an individual is a bona fide resident of Guam. American Samoa, or the Northern Mariana Islands shall be made under regulations prescribed by the Secretary.”Pub. L. 108–357 title VIII § 908(c)(1) · 118 Stat. 1418
Amended · 26 U.S.C. § 931(d)
Pub. L. 108–357 amended heading and text of subsec. (d) generally
Substituted · 26 U.S.C. § 931(d)
Pub. L. 108–357 substituting provisions relating to employees of the United States for provisions consisting of pars. (1) to (3) relating to special rules concerning employees of the United States, determination of source of income, and determination of residency
Source evidence
Code amendment note
Subsec. (d). Pub. L. 108–357 amended heading and text of subsec. (d) generally, substituting provisions relating to employees of the United States for provisions consisting of pars. (1) to (3) relating to special rules concerning employees of the United States, determination of source of income, and determination of residency.Enacted provision · exact public law section
(1) Section 931(d) is amended to read as follows: “(d) Employees of the United States.— Amounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (1) or (2) of subsection (a).” .Effective date note
Amendment by Pub. L. 108–357 applicable to taxable years ending after Oct. 22, 2004, see section 908(d)(1) of Pub. L. 108–357, set out as an Effective Date note under section 937 of this title.
16 of 17 references resolved to an enrolled provision · 1 partial
Editorial Notes
Amendments1966–2004 · 8 rounds
2004
Subsec. (d). Pub. L. 108–357 amended heading and text of subsec. (d) generally, substituting provisions relating to employees of the United States for provisions consisting of pars. (1) to (3) relating to special rules concerning employees of the United States, determination of source of income, and determination of residency.
1986
Pub. L. 99–514 amended section generally, substituting provisions relating to income from sources within Guam, American Samoa, or the Northern Mariana Islands, for former provisions relating to income from sources within possessions of the United States, which had declared in: subsec. (a), general rule as to gross income, including requirements relating to 3-year period and trade or business; subsec. (b), rule as to amounts received in United States; subsec. (c), definition of “possession of the United States”; subsec. (d), general rule allowing deductions only to extent connected with income from sources within United States, and specific exceptions to limitations of general rule; subsec. (e), deduction for personal exemption; subsec. (f), allowance of deductions and credits; subsec. (g), foreign tax credit; subsec. (h), provisions relating to employees of United States.
1984
Subsec. (d)(2)(B). Pub. L. 98–369 substituted “for losses” for “, for losses of property not connected with the trade or business if arising from certain casualties or theft,”.
1977
Subsec. (d)(3). Pub. L. 95–30 struck out par. (3) which made a cross reference to section 142(b)(2) for disallowance of the standard deduction.
1976
Subsec. (a). Pub. L. 94–455, § 1051(c)(1), struck out all references to domestic corporations and made subsection applicable only to individual citizens.
Subsec. (c). Pub. L. 94–455, § 1051(c)(2), substituted “Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam” for “Virgin Islands of the United States, and such term when used with respect to citizens of the United States does not include Puerto Rico or Guam” after “does not include the”.
Subsec. (d)(1). Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “a citizen of the United States” for “persons” after “in the case of” and struck out “or his delegate” after “Secretary”.
Subsec. (f). Pub. L. 94–455, §§ 1051(c)(3), 1906(b)(13)(A), substituted “A citizen of the United States” for “Persons” after “Allowance of deductions and credits” and struck out in two places “or his delegate” after “Secretary”.
Subsecs. (h), (i). Pub. L. 94–455, § 1901(a)(117), redesignated subsec. (i) as (h). Former subsec. (h), relating to the status of a citizen of the United States who has been interned by the enemy, was struck out.
1972
Subsec. (c). Pub. L. 92–606 substituted “Puerto Rico or Guam” for “Puerto Rico”.
1971
Subsec. (a). Pub. L. 92–178 provided for non-application of section in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC.
1966
Subsec (d). Pub. L. 89–809 made applicable to United States citizens and domestic corporations engaged in trade or business in possessions, who qualify for the special tax treatment of income qualifying for the exclusion relating to income from United States possessions, provisions which allow deductions to nonresident aliens or foreign corporations engaged in trade or business in the United States by allowing deductions only where they are allocable to income effectively connected with the trade or business in the United States and by spelling out the exceptions allowing deductions whether or not connected with income from sources within the United States in the case of losses not connected with the trade or business but incurred in transactions entered into for profit, casualty losses, and charitable contributions.
Statutory Notes and Related Subsidiaries
Effective Date of 2004 Amendment
Amendment by Pub. L. 108–357 applicable to taxable years ending after , see section 908(d)(1) of Pub. L. 108–357, set out as an Effective Date note under section 937 of this title.
Effective Date of 1986 Amendment
Pub. L. 99–514, title XII, § 1277, , 100 Stat. 2600, as amended by Pub. L. 100–647, title I, § 1012(z), , 102 Stat. 3530, provided that:
“(a) In General.—
Except as otherwise provided in this section, the amendments made by this subtitle [subtitle G (§§ 1271–1277) of title XII of Pub. L. 99–514, enacting section 932 of this title, amending this section and sections 28, 32, 48, 63, 153, 246, 338, 864, 876, 881, 933, 934, 936, 957, 1402, 1442, 3401, 6091, 7651, 7654, and 7655 of this title, repealing sections 932, 934A, and 935 of this title, and enacting provisions set out as notes under this section and section 932 of this title] shall apply to taxable years beginning after .
“(b) Special Rule for Guam, American Samoa, and the Northern Mariana Islands.—
The amendments made by this subtitle shall apply with respect to Guam, American Samoa, or the Northern Mariana Islands (and to residents thereof and corporations created or organized therein) only if (and so long as) an implementing agreement under section 1271 [set out below] is in effect between the United States and such possession.
“(c) Special Rules for the Virgin Islands.—
“(1) In general.—
The amendments made by section 1275(c) [amending sections 28, 48, 338, 864, and 934 of this title and repealing section 934A of this title] shall apply with respect to the Virgin Islands (and residents thereof and corporations created or organized therein) only if (and so long as) an implementing agreement is in effect between the United States and the Virgin Islands with respect to the establishment of rules under which the evasion or avoidance of United States income tax shall not be permitted or facilitated by such possession. Any such implementing agreement shall be executed on behalf of the United States by the Secretary of the Treasury, after consultation with the Secretary of the Interior.
“(2) Section 1275(b).—
“(A) In general.—
The amendment made by section 1275(b) [amending section 7651 of this title] shall apply with respect to—
“(i) any taxable year beginning after , and
“(ii) any pre-1987 open year.
“(B) Special rules.—
In the case of any pre-1987 open year—
“(i) the amendment made by section 1275(b) shall not apply to income from sources in the Virgin Islands or income effectively connected with the conduct of a trade or business in the Virgin Islands, and
“(ii) the taxpayer shall be allowed a credit—
“(I) against any additional tax imposed by subtitle A of the Internal Revenue Code of 1954 [now 1986] (by reason of the amendment made by section 1275(b)) on income not described in clause (i),
“(II) for any tax paid to the Virgin Islands before the date of the enactment of this Act [] and attributable to such income.
For purposes of clause (ii)(II), any tax paid before , pursuant to a process in effect before , shall be treated as paid before the date of the enactment of this Act.
“(C) Pre-1987 open year.—
For purposes of this paragraph, the term ‘pre-1987 open year’ means any taxable year beginning before , if on the date of the enactment of this Act [] the assessment of a deficiency of income tax for such taxable year is not barred by any law or rule of law.
“(D) Exception.—
In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any domestic corporation if—
“(i) during the fiscal year which ended , such corporation was actively engaged directly or through a subsidiary in the conduct of a trade or business in the Virgin Islands and such trade or business consists of business related to marine activities, and
“(ii) such corporation was incorporated on , in Delaware.
“(E) Exception for certain transactions.—
“(i) In general.—
In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any income derived from transactions described in clause (ii) by 1 or more corporations which were formed in Delaware on or about , and which have owned 1 or more office buildings in St. Thomas, United States Virgin Islands, for at least 5 years before the date of the enactment of this Act [].
“(ii) Description of transactions.—
The transactions described in this clause are—
“(I) the redemptions of limited partnership interests for cash and property described in an agreement (as amended) dated ,
“(II) the subsequent disposition of the properties distributed in such redemptions, and
“(III) interest earned before , on bank deposits of proceeds received from such redemptions to the extent such deposits are located in the United States Virgin Islands.
“(iii) Limitation.—
The aggregate reduction in tax by reason of this subparagraph shall not exceed $8,312,000. If the taxes which would be payable as the result of the application of the amendment made by section 1275(b) to pre-1987 open years exceeds the limitation of the preceding sentence, such excess shall be treated as attributable to income received in taxable years in reverse chronological order.
“(d) Report on Implementing Agreements.—
If, during the 1-year period beginning on the date of the enactment of this Act [], any implementing agreement described in subsection (b) or (c) is not executed, the Secretary of the Treasury or his delegate shall report to the Committee on Finance of the United States Senate, the Committee on Ways and Means, and the Committee on Interior and Insular Affairs [now Committee on Natural Resources] of the House of Representatives with respect to—
“(1) the status of such negotiations, and
“(2) the reason why such agreement has not been executed.
“(e) Treatment of Certain United States Persons.—
Except as otherwise provided in regulations prescribed by the Secretary of the Treasury or his delegate, if a United States person becomes a resident of Guam, American Samoa, or the Northern Mariana Islands, the rules of section 877(c) of the Internal Revenue Code of 1954 [now 1986] shall apply to such person during the 10-year period beginning when such person became such a resident. Notwithstanding subsection (b), the preceding sentence shall apply to dispositions after , in taxable years ending after such date.
“(f) Exemption From Withholding.—
Notwithstanding subsection (b), the modification of section 884 of the Internal Revenue Code of 1986 by reason of the amendment to section 881 of such Code by section 1273(b)(1) of this Act shall apply to taxable years beginning after .”
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 applicable to taxable years beginning after , see section 711(c)(2)(A)(v) of Pub. L. 98–369, set out as a note under section 165 of this title.
Effective Date of 1977 Amendment
Amendment by Pub. L. 95–30 applicable to taxable years beginning after , see section 106(a) of Pub. L. 95–30, set out as a note under section 1 of this title.
Effective Date of 1976 Amendment
Amendment by section 1051(c) of Pub. L. 94–455 applicable with respect to taxable years beginning after , with certain exceptions, see section 1051(i) of Pub. L. 94–455, set out as a note under section 27 of this title.
Amendment by section 1901(a)(117) of Pub. L. 94–455 applicable with respect to taxable years beginning after , see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1972 Amendment
Pub. L. 92–606, § 2, , 86 Stat. 1497, provided in part that: “The amendments made by section 1 [enacting sections 935 and 6688 of this title, amending this section, sections 932, 7654, and 7701 of this title, and section 1421i of Title 48, Territories and Insular Possessions, and enacting provisions set out as notes under sections 881 and 1442 of this title] (other than section 1(e)) [amending sections 881 and 1442 of this title] shall apply with respect to taxable years beginning after .”
Effective Date of 1971 Amendment
Amendment by Pub. L. 92–178 applicable with respect to taxable years ending after , except that a corporation may not be a DISC for any taxable year beginning before , see section 507 of Pub. L. 92–178, set out as an Effective Date note under section 991 of this title.
Effective Date of 1966 Amendment
Pub. L. 89–809, title I, § 107(b), , 80 Stat. 1571, provided that: “The amendment made by this section [amending this section] shall apply with respect to taxable years beginning after .”
Authority of Guam, American Samoa, and the Northern Mariana Islands To Enact Revenue Laws
Pub. L. 99–514, title XII, § 1271, , 100 Stat. 2591, provided that:
“(a) In General.—
Except as provided in subsection (b), nothing in the laws of the United States shall prevent Guam, American Samoa, or the Northern Mariana Islands from enacting tax laws (which shall apply in lieu of the mirror system) with respect to income—
“(1) from sources within, or effectively connected with the conduct of a trade or business within, any such possession, or
“(2) received or accrued by any resident of such possession.
“(b) Agreements To Alleviate Certain Problems Relating to Tax Administration.—
Subsection (a) shall apply to Guam, American Samoa, or the Northern Mariana Islands only if (and so long as) an implementing agreement is in effect between the United States and such possession with respect to—
“(1) the elimination of double taxation involving taxation by such possession and taxation by the United States,
“(2) the establishment of rules under which the evasion or avoidance of United States income tax shall not be permitted or facilitated by such possession,
“(3) the exchange of information between such possession and the United States for purposes of tax administration, and
“(4) the resolution of other problems arising in connection with the administration of the tax laws of such possession or the United States.
Any such implementing agreement shall be executed on behalf of the United States by the Secretary of the Treasury after consultation with the Secretary of the Interior.
“(c) Revenues Not To Decrease.—
The total amount of the revenue received by any possession referred to in subsection (a) pursuant to its tax laws during the implementation year and each of the 4 fiscal years thereafter shall not be less than the revenue (adjusted for inflation) which was received by such possession pursuant to tax laws for its last fiscal year before the implementation year.
“(d) Nondiscriminatory Treatment Required.—
Nothing in any tax law of a possession referred to in subsection (a) may discriminate against any United States person or any resident (corporate or otherwise) of any other possession.
“(e) Enforcement.—
“(1) In general.—
If the Secretary of the Treasury (after consultation with the Secretary of the Interior) determines that any possession has failed to comply with subsection (c) or (d), the Secretary of the Treasury shall so notify the Governor of such possession in writing. If such possession does not comply with subsection (c) or (d) (as the case may be) within 90 days of such notification, the Secretary of the Treasury shall notify the Congress of such noncompliance. Unless the Congress by law provides otherwise, the mirror system of taxation shall be reinstated in such possession and shall be in full force and effect for taxable years beginning after such notification to the Congress.
“(2) Special rule for revenue requirements.—
If the failure to comply with subsection (c) is for good cause and does not jeopardize the fiscal integrity of the possession, the Secretary may waive the requirements of subsection (c) for such period as he determines appropriate.
“(f) Definitions and Special Rules.—
“(1) Implementation year.—
For purposes of this section, the term ‘implementation year’ means the 1st fiscal year of the possession in which the tax laws authorized by subsection (a) take effect.
“(2) Mirror system.—
For purposes of this section, the mirror system of taxation consists of the provisions of law (in effect on the day before the date of the enactment of this Act []) which make the provisions of the income tax laws of the United States (as in effect from time to time) in effect in a possession of the United States.
“(3) Special rule for northern mariana islands.—
Notwithstanding the provisions of the last clause of section 601(a) of Public Law 94–241 [48 U.S.C. 1801 note], the Commonwealth of the Northern Mariana Islands may elect to continue its mirror system of taxation without regard to whether Guam enacts tax laws under the authority provided in subsection (a).”
Credits
1954–2004 · 9 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 291
- 1966Pub. L. 89–809, title I, § 107(a), , 80 Stat. 1571
- 1971Pub. L. 92–178, title V, § 502(d), , 85 Stat. 550
- 1972Pub. L. 92–606, § 1(f)(1), , 86 Stat. 1497
- 1976Pub. L. 94–455, title X, § 1051(c), title XIX, §§ 1901(a)(117), 1906(b)(13)(A), , 90 Stat. 1645, 1784, 1834
- 1977Pub. L. 95–30, title I, § 101(d)(12), , 91 Stat. 134
- 1984Pub. L. 98–369, div. A, title VII, § 711(c)(2)(A)(iv), , 98 Stat. 945
- 1986Pub. L. 99–514, title XII, § 1272(a), , 100 Stat. 2593
- 2004Pub. L. 108–357, title VIII, § 908(c)(1), , 118 Stat. 1656.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 291; Pub. L. 89–809, title I, § 107(a), , 80 Stat. 1571; Pub. L. 92–178, title V, § 502(d), , 85 Stat. 550; Pub. L. 92–606, § 1(f)(1), , 86 Stat. 1497; Pub. L. 94–455, title X, § 1051(c), title XIX, §§ 1901(a)(117), 1906(b)(13)(A), , 90 Stat. 1645, 1784, 1834; Pub. L. 95–30, title I, § 101(d)(12), , 91 Stat. 134; Pub. L. 98–369, div. A, title VII, § 711(c)(2)(A)(iv), , 98 Stat. 945; Pub. L. 99–514, title XII, § 1272(a), , 100 Stat. 2593; Pub. L. 108–357, title VIII, § 908(c)(1), , 118 Stat. 1656.)