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H.R. 367: Territorial Tax Parity and Clarification Act

This bill, titled the Territorial Tax Parity and Clarification Act, seeks to amend the Internal Revenue Code as it relates to the taxation of sales of personal property in U.S. territories. The key points of the bill are as follows:

Modification of Tax Rules

The bill proposes changes to the source rules governing how sales of personal property are taxed in territories of the United States. Specifically, it aims to modify the existing legal framework outlined in Section 865 of the Internal Revenue Code.

Inclusion of Additional Code Section

Under the proposed changes, the bill adds a reference to Section 932 in the Internal Revenue Code. This modification will clarify how certain sales are treated for tax purposes, ensuring that transactions occurring within U.S. territories are taxed in a way that reflects the broader territorial tax framework.

Effective Date

The amendments proposed in this bill will take effect for taxable years that begin after December 31, 2023. This means that the updated tax rules will apply to income and transactions occurring from January 1, 2024, onward.

Overall Objective

The overall aim of the Territorial Tax Parity and Clarification Act is to harmonize tax treatment for sales occurring in U.S. territories, thereby ensuring fairness and parity in taxation for individuals and businesses operating in these jurisdictions.

Impact on Taxation

By amending the source rules for personal property sales, the bill seeks to address potential disparities in tax treatment that may exist between transactions occurring within the U.S. mainland versus those in U.S. territories. This change could have implications for businesses operating in these areas as they navigate compliance with the updated tax regulations.

Relevant Companies

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Sponsors

1 sponsor

Actions

2 actions

Date Action
Jan. 13, 2025 Introduced in House
Jan. 13, 2025 Referred to the House Committee on Ways and Means.

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