USC Subpart D

in effect

26 U.S.C. § 931 Income from sources within Guam, American Samoa, or the Northern Mariana Islands

(a) General ruleIn 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 allowableAn 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 possessionFor purposes of this section, the term “specified possession” means Guam, American Samoa, and the Northern Mariana Islands. (d) Employees of the United StatesAmounts 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).

26 U.S.C. § 932 Coordination of United States and Virgin Islands income taxes

(a) Treatment of United States residents(1) Application of subsectionThis subsection shall apply to an individual for the taxable year if—(A) such individual—(i) is a citizen or resident of the United States (other than a bona fide resident of the Virgin Islands during the entire taxable year), and (ii) has income derived from sources within the Virgin Islands, or effectively connected with the conduct of a trade or business within such possession, for the taxable year, or (B) such individual files a joint return for the taxable year with an individual described in subparagraph (A). (2) Filing requirementEach individual to whom this subsection applies for the taxable year shall file his income tax return for the taxable year with both the United States and the Virgin Islands. (3) Extent of income tax liabilityIn the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the United States shall be treated as including the Virgin Islands. (b) Portion of United States tax liability payable to the Virgin Islands(1) In generalEach individual to whom subsection (a) applies for the taxable year shall pay the applicable percentage of the taxes imposed by this chapter for such taxable year (determined without regard to paragraph (3)) to the Virgin Islands. (2) Applicable percentage(A) In generalFor purposes of paragraph (1), the term “applicable percentage” means the percentage which Virgin Islands adjusted gross income bears to adjusted gross income. (B) Virgin Islands adjusted gross incomeFor purposes of subparagraph (A), the term “Virgin Islands adjusted gross income” means adjusted gross income determined by taking into account only income derived from sources within the Virgin Islands and deductions properly apportioned or allocable thereto. (3) Amounts paid allowed as creditThere shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the taxes required to be paid to the Virgin Islands under paragraph (1) which are so paid. (c) Treatment of Virgin Islands residents(1) Application of subsectionThis subsection shall apply to an individual for the taxable year if—(A) such individual is a bona fide resident of the Virgin Islands during the entire taxable year, or (B) such individual files a joint return for the taxable year with an individual described in subparagraph (A). (2) Filing requirementEach individual to whom this subsection applies for the taxable year shall file an income tax return for the taxable year with the Virgin Islands. (3) Extent of income tax liabilityIn the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the Virgin Islands shall be treated as including the United States. (4) Residents of the Virgin IslandsIn the case of an individual—(A) who is a bona fide resident of the Virgin Islands during the entire taxable year, (B) who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, and (C) who fully pays his tax liability referred to in section 934(a) to the Virgin Islands with respect to such income, for purposes of calculating income tax liability to the United States, gross income shall not include any amount included in gross income on such return, and allocable deductions and credits shall not be taken into account. (d) Special rule for joint returnsIn the case of a joint return, this section shall be applied on the basis of the residence of the spouse who has the greater adjusted gross income (determined without regard to community property laws) for the taxable year. (e) Special rule for applying section to tax imposed in Virgin IslandsIn applying this section for purposes of determining income tax liability incurred to the Virgin Islands, the provisions of this section shall not be affected by the provisions of Federal law referred to in section 934(a).

26 U.S.C. § 933 Income from sources within Puerto Rico

The following items shall not be included in gross income and shall be exempt from taxation under this subtitle: (1) Resident of Puerto Rico for entire taxable yearIn the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, income derived from sources within Puerto Rico (except amounts received for services performed as an employee of the United States or any agency thereof); but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction under section 151, relating to personal exemptions), or any credit, properly allocable to or chargeable against amounts excluded from gross income under this paragraph. (2) Taxable year of change of residence from Puerto RicoIn the case of an individual citizen of the United States who has been a bona fide resident of Puerto Rico for a period of at least 2 years before the date on which he changes his residence from Puerto Rico, income derived from sources therein (except amounts received for services performed as an employee of the United States or any agency thereof) which is attributable to that part of such period of Puerto Rican residence before such date; but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction for personal exemptions under section 151), or any credit, properly allocable to or chargeable against amounts excluded from gross income under this paragraph.

26 U.S.C. § 934 Limitation on reduction in income tax liability incurred to the Virgin Islands

(a) General ruleTax 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”, 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 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). (b) Reductions permitted with respect to certain income(1) In generalExcept as provided in paragraph (2), subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income derived from sources within the Virgin Islands or income effectively connected with the conduct of a trade or business within the Virgin Islands. (2) Exception for liability paid by citizens or residents of the United StatesParagraph (1) shall not apply to any liability payable to the Virgin Islands under section 932(b). (3) Special rule for non-United States income of certain foreign corporations(A) In generalIn the case of a qualified foreign corporation, subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income which is derived from sources outside the United States and which is not effectively connected with the conduct of a trade or business within the United States. (B) Qualified foreign corporationFor purposes of subparagraph (A), the term “qualified foreign corporation” means any foreign corporation if less than 10 percent of—(i) the total voting power of the stock of such corporation, and (ii) the total value of the stock of such corporation, is owned or treated as owned (within the meaning of section 958) by 1 or more United States persons. (4) Determination of income source, etc.The determination as to whether income is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall be made under regulations prescribed by the Secretary.

26 U.S.C. § 937 Residence and source rules involving possessions

(a) Bona fide residentFor purposes of this subpart, section 865(g)(3), section 876, section 881(b), paragraphs (2) and (3) of section 901(b), section 957(c), section 3401(a)(8)(C), and section 7654(a), except as provided in regulations, the term “bona fide resident” means a person—(1) who is present for at least 183 days during the taxable year in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands, as the case may be, and (2) who does not have a tax home (determined under the principles of section 911(d)(3) without regard to the second sentence thereof) outside such specified possession during the taxable year and does not have a closer connection (determined under the principles of section 7701(b)(3)(B)(ii)) to the United States or a foreign country than to such specified possession. For purposes of paragraph (1), the determination as to whether a person is present for any day shall be made under the principles of section 7701(b). (b) Source rulesExcept as provided in regulations, for purposes of this title—(1) except as provided in paragraph (2), rules similar to the rules for determining whether income is income from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall apply for purposes of determining whether income is from sources within a possession specified in subsection (a)(1) or effectively connected with the conduct of a trade or business within any such possession, and (2) any income treated as income from sources within the United States or as effectively connected with the conduct of a trade or business within the United States shall not be treated as income from sources within any such possession or as effectively connected with the conduct of a trade or business within any such possession. (c) Reporting requirement(1) In generalIf, for any taxable year, an individual takes the position for United States income tax reporting purposes that the individual became, or ceases to be, a bona fide resident of a possession specified in subsection (a)(1), such individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position. (2) Transition ruleIf, for any of an individual’s 3 taxable years ending before the individual’s first taxable year ending after the date of the enactment of this subsection, the individual took a position described in paragraph (1), the individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position.