This 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.
As background, 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. Under current law, the IRS may limit the 10% tax payment requirement related to income from such personal property sales in Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico.
This bill expands the IRS’s authority to include limiting the tax requirement for personal property sales in the Virgin Islands.