HR 365
Territorial Tax Parity Act of 2025
Take action
Record your position on this measure.
Sign in to record your position, submit testimony, or contact your legislator.
Sign in to take action- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Bill overview
This bill, the Territorial Tax Parity Act of 2025, aims to change how income from U.S. territories is taxed. It alters the rules for determining where income is sourced, requiring income to be considered U.S.-sourced only if it comes from a U.S. office or business. Specifically, the bill addresses income from the sale of personal property, potentially limiting the tax paid to the territory to determine its U.S. sourcing.
Key provisions
- Changes the income sourcing rules for U.S. territories.
- Income is considered U.S.-sourced only if attributable to a U.S. office or fixed place of business.
- Addresses income from the sale of personal property in territories.
- Allows the IRS to limit income tax payments related to personal property sales.
Who is affected
- Residents of U.S. territories (Puerto Rico, Guam, Virgin Islands, American Samoa, Northern Mariana Islands)
- The Internal Revenue Service (IRS)
- Taxpayers with income from U.S. territories
Notable changes
- Income from personal property sales in territories may be treated as foreign-sourced if a minimum tax payment is not made.
- The bill modifies the definition of a ‘fixed place of business’ for sourcing purposes.
Sponsors
Official sponsors from legislative records.
Primary sponsor
Stacey E. [D-VI-At Large] Plaskett
Arguments in favor
Reasons to support this legislation.
No arguments in favor have been submitted.
Submit yoursArguments opposed
Reasons to oppose this legislation.
No arguments opposed have been submitted.
Submit yoursRead the latest version inline or switch to a previous version.
119th CONGRESS — 1st Session
H. R. 365
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to modify the residence and source rules to provide for economic recovery in the possessions of the United States.
This Act may be cited as the Territorial Tax Parity Act of 2025
.
Section 937(b)(2) of the Internal Revenue Code of 1986 is amended by inserting , but only to the extent such income is attributable to an office or fixed place of business within the United States (determined under the rules of section 864(c)(5))
before the period at the end.
Section 865(j)(3) of such Code is amended by inserting , 932,
after 931
.
The amendments made by this section shall apply to taxable years beginning after December 31, 2024.