Territorial Tax Parity and Clarification Act

This bill gives the IRS the authority to adjust a tax rule for the U.S. Virgin Islands that already applies to other U.S. territories like Guam, Puerto Rico, American Samoa, and the Northern Mariana Islands. Under current law, when a U.S. resident sells certain personal property from a business located in a U.S. territory, the income may be treated differently for federal tax purposes depending on whether at least 10% in income tax is paid to that territory. The IRS already has the power to limit that 10% tax payment requirement in the other territories, and this bill extends that same power to cover the Virgin Islands as well.

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