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US Territories Tax Changes: New Residence and Income Source Rules.

This act modifies tax rules for determining residency and income sources for individuals and businesses in U.S. territories like Puerto Rico and the Virgin Islands. The goal is to support economic recovery in these regions by adjusting tax provisions. These changes could impact how income earned in these areas is taxed, affecting residents and businesses operating there.
Key points
The definition of a "bona fide resident" for U.S. territories is changed, requiring a longer physical presence (122 days instead of 31 days) for tax purposes.
Rules for determining the source of income are modified, which may affect where income is taxed.
New rules are introduced for income from preparatory or auxiliary activities within the U.S., which will not be treated as U.S.-sourced income for territorial tax purposes.
The changes apply to tax years beginning after December 31, 2024.
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Introduced
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Additional Information
Print number: 119_HR_364
Sponsor: Del. Plaskett, Stacey E. [D-VI]
Process start date: 2025-01-13
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Territorial Tax Equity and Economic Growth Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_364.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-01-13.

What are the main provisions?

Key points include:

  • The definition of a "bona fide resident" for U.S. territories is changed, requiring a longer physical presence (122 days instead of 31 days) for tax purposes.
  • Rules for determining the source of income are modified, which may affect where income is taxed.
  • New rules are introduced for income from preparatory or auxiliary activities within the U.S., which will not be treated as U.S.-sourced income for territorial tax purposes.
  • The changes apply to tax years beginning after December 31, 2024.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Del. Plaskett, Stacey E. [D-VI].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-22.

CATEGORIES

Taxes Economy