§ 934. Limitation on reduction in income tax liability incurred to the Virgin Islands

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.

1. 1960

   Pub. L. 86–779 § 4(a)(1) · 74 Stat. 998

   Enacted · 26 U.S.C. § 934

   Added Pub. L. 86–779, § 4(a)(1), Sept. 14, 1960, 74 Stat. 998

   Source evidence

   Code source credit
   Added Pub. L. 86–779, § 4(a)(1), Sept. 14, 1960, 74 Stat. 998

   Enacted provision · exact public law section
   (1) Subpart D of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1954 (relating to possessions of the United States) is amended by adding at the end thereof the following new section: “SEC. 934. LIMITATION ON REDUCTION IN INCOME TAX LIABILITY INCURRED TO THE VIRGIN ISLANDS. “(a) General Rule.— Tax liability incurred to the Virgin Islands pursuant to this subtitle, as made applicable in the Virgin Islands by the Act entitled ‘An Act making appropriations for the naval service for the fiscal year ending June 30, 1922, and for other purposes’, 42 Stat. 123. approved July 12, 1921 (48 U.S.C. 1397), or pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approved 68 Stat. 508. July 22, 1954 (48 U.S.C. 1642), shall not be reduced or remitted in any way, directly or indirectly, whether by grant, subsidy, or other similar payment, by any law enacted in the Virgin Islands, except to the extent provided in subsection (b) or (c). “(b) Exception for Certain Domestic and Virgin Islands Corporations.— In the case of a domestic corporation or a Virgin Islands corporation, subsection (a) shall not apply (if the information required by subsection (d) is supplied) to the extent such corporation derived its income from sources without the United States if the conditions of both paragraph (1) and paragraph (2) are satisfied: “(1) Three-year period.— If 80 percent or more of the gross income of such corporation 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 the Virgin Islands; and “(2) Trade or business.— If 50 percent or more of the gross income of such corporation for such period or such part thereof was derived from the active conduct of a trade or business within the Virgin Islands. For purposes of the preceding sentence, the gross income of a Virgin Islands corporation, and the sources from which the income of such corporation is derived, shall be determined as if such corporation were a domestic corporation. For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States. “(c) Exception for Certain Residents of the Virgin Islands.— Subsection (a) shall not apply in the case of an individual citizen of the United States who is a bona fide resident of the Virgin Islands during the entire taxable year (if the information required by subsection (d) is supplied), to the extent his income is derived from sources within the Virgin Islands (except that subsection (a) shall apply in the case of amounts received for services performed as an employee of the United States or any agency thereof). For purposes of the preceding sentence, gain or loss from the sale or exchange of any security (as defined in section 165(g)(2)) shall not be treated as 26 USC 165. derived from sources within the Virgin Islands. “(d) Requirement To Supply Information.— Subsections (b) and (c) shall apply only in the case of persons who supply (at such time and in such manner ns the Secretary or his delegate may by regulations prescribe) such information as the Secretary or his delegate may by regulations prescribe for purposes of determining the applicability of such subsections.”

2. 1976

   Pub. L. 94–455 § 1901(a)(118) · 90 Stat. 1520

   Struck · 26 U.S.C. § 934(b)

   Pub. L. 94–455, § 1901(a)(118), struck out “For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 94–455, § 1901(a)(118), struck out “For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States”.

   Enacted provision · exact public law section
   (118) Amendment of section 934.— Section 934(b) (relating to gross income received by a corporation from the Virgin Islands) is amended by striking out the last sentence.

3. 1976

   Pub. L. 94–455 § 1906(b)(13)(A) · 90 Stat. 1520

   Struck · 26 U.S.C. § 934(d)

   Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in two places

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in two places.

   Enacted provision · exact public law section
   (A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.

4. 1982

   Pub. L. 97–248 § 213(b)(1) · 96 Stat. 324

   Substituted · 26 U.S.C. § 934(b)(2)

   Pub. L. 97–248, § 213(b)(1), substituted “65 percent” for “50 percent”

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 97–248, § 213(b)(1), substituted “65 percent” for “50 percent”.

   Enacted provision · exact public law section
   (1) by striking out “50 percent” in subsection (b)(2) and inserting in lieu thereof “65 percent”, and

5. 1982

   Pub. L. 97–248 § 213(b)(2) · 96 Stat. 324

   Added · 26 U.S.C. § 934(e)

   Pub. L. 97–248, § 213(b)(2), added subsec. (e)

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 97–248, § 213(b)(2), added subsec. (e).

   Enacted provision · exact public law section
   (2) by adding at the end thereof the following new subsections:

6. 1982

   Pub. L. 97–248 § 213(b)(2) · 96 Stat. 324

   Substituted · 26 U.S.C. § 934(f)

   Pub. L. 97–248, § 213(b)(2), added a temporary subsec. (f) which provided that in applying subsec. (b)(2) with respect to taxable years beginning after December 31, 1982, and before January 1, 1985, “55 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1983 and “60 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1984

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 97–248, § 213(b)(2), added a temporary subsec. (f) which provided that in applying subsec. (b)(2) with respect to taxable years beginning after December 31, 1982, and before January 1, 1985, “55 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1983 and “60 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1984.

   Enacted provision · exact public law section
   (2) by adding at the end thereof the following new subsections:

7. 1983

   Pub. L. 97–455 § 1(c) · 96 Stat. 2497

   Inserted · 26 U.S.C. § 934(a)

   Pub. L. 97–455 inserted “or in section 934A” after “subsection (b) or (c)”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 97–455 inserted “or in section 934A” after “subsection (b) or (c)”.

   Enacted provision · exact public law section
   (c) 26 USC 934. Technical Amendment.— Subsection (a) of section 934 of such Code is amended by inserting before the period at the end thereof “or in section 934A”.

8. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 div. A title VIII § 801(d)(7) · 98 Stat. 494

   Added · 26 U.S.C. § 934(f)

   Pub. L. 98–369 added subsec. (f) relating to FSC

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 98–369 added subsec. (f) relating to FSC.

   Enacted provision · exact public law section
   (7) Section 934 (relating to limitation on reduction in income tax liability incurred to the Virgin Islands) is amended by adding at the end thereof the following new subsection: “(f) FSC.— Subsection (a) shall not apply in the case of a Virgin Islands corporation which is a FSC.”.

9. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 1275(c)(2)(A) · 100 Stat. 2085

   Struck · 26 U.S.C. § 934(a)

   Pub. L. 99–514, § 1275(c)(2)(A), struck out “or (c) or in section 934A” after “subsection (b)”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 99–514, § 1275(c)(2)(A), struck out “or (c) or in section 934A” after “subsection (b)”.

   Enacted provision · exact public law section
   (A) Subsection (a) of section 934 is amended by striking out “or (c) or in section 934A”.

10. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1275(c)(1) · 100 Stat. 2085

    1. Added · 26 U.S.C. § 934(b)

       Pub. L. 99–514, § 1275(c)(1), (2)(B), added subsec. (b)

    2. Struck · 26 U.S.C. § 934(b)

       Pub. L. 99–514, § 1275(c)(1), (2)(B), struck out former subsec. (b) which excepted from subsec. (a) domestic or Virgin Islands corporations to the extent they derived income from sources without the United States under certain conditions

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 99–514, § 1275(c)(1), (2)(B), added subsec. (b) and struck out former subsec. (b) which excepted from subsec. (a) domestic or Virgin Islands corporations to the extent they derived income from sources without the United States under certain conditions.

    Enacted provision · exact public law section
    (1) Section 934 is amended by striking out subsections (b), (c), and (d).

11. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1275(c)(1) · 100 Stat. 2085

    Struck · 26 U.S.C. § 934(c)

    Pub. L. 99–514, § 1275(c)(1), struck out subsec. (c) which provided an exception to subsec. (a) of this section for individual citizens of the United States residing in the Virgin Islands to the extent their income is derived from sources within the Virgin Islands

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 99–514, § 1275(c)(1), struck out subsec. (c) which provided an exception to subsec. (a) of this section for individual citizens of the United States residing in the Virgin Islands to the extent their income is derived from sources within the Virgin Islands.

    Enacted provision · exact public law section
    (1) Section 934 is amended by striking out subsections (b), (c), and (d).

12. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1275(c)(1) · 100 Stat. 2085

    Struck · 26 U.S.C. § 934(d)

    Pub. L. 99–514, § 1275(c)(1), struck out subsec. (d) which related to requirement to supply information

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 99–514, § 1275(c)(1), struck out subsec. (d) which related to requirement to supply information.

    Enacted provision · exact public law section
    (1) Section 934 is amended by striking out subsections (b), (c), and (d).

13. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1275(a)(2)(A) · 100 Stat. 2085

    Struck · 26 U.S.C. § 934(e)

    Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (e) which provided for tax treatment of intangible property income of certain domestic corporations

    Source evidence

    Code amendment note
    Subsec. (e). Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (e) which provided for tax treatment of intangible property income of certain domestic corporations.

    Enacted provision · exact public law section
    (A) Section 934 is amended by striking out subsections (e) and (f).

14. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1275(a)(2)(A) · 100 Stat. 2085

    Struck · 26 U.S.C. § 934(f)

    Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (f) which provided a transitional rule for applying subsec. (b)(2) of this section with respect to taxable years beginning after Dec. 31, 1982, and before Jan. 1, 1985

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (f) which provided a transitional rule for applying subsec. (b)(2) of this section with respect to taxable years beginning after Dec. 31, 1982, and before Jan. 1, 1985.

    Enacted provision · exact public law section
    (A) Section 934 is amended by striking out subsections (e) and (f).

15. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1876(f)(2) · 100 Stat. 2085

    Struck · 26 U.S.C. § 934(f)

    Pub. L. 99–514, § 1876(f)(2), struck out subsec. (f) which provided that subsec. (a) of this section not apply in the case of a Virgin Islands corporation which is a FSC

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 99–514, § 1876(f)(2), struck out subsec. (f) which provided that subsec. (a) of this section not apply in the case of a Virgin Islands corporation which is a FSC.

    Enacted provision · exact public law section
    (2) Clerical amendment.— Section 934 is amended by striking out the subsection (f) added by section 801(1)(7) of the Tax Reform Act of 1984.

16. 2004

    Pub. L. 108–357 title VIII § 908(c)(3) · 118 Stat. 1418

    Struck · 26 U.S.C. § 934(b)(4)

    Pub. L. 108–357 struck out “the Virgin Islands or” before “the United States” in two places

    Source evidence

    Code amendment note
    Subsec. (b)(4). Pub. L. 108–357 struck out “the Virgin Islands or” before “the United States” in two places.

    Enacted provision · exact public law section
    (3) Section 934(b)(4) is amended by striking “the Virgin Islands or” each place it appears.

    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.

17 of 17 references resolved to an enrolled provision