Us Congress 2023-2024 Regular Session

Us Congress House Bill HB1034

Introduced
2/14/23  

Caption

Territorial Tax Equity and Economic Growth Act of 2023

Impact

The proposed amendments modify the requirements for determining a bona fide resident and the source of income, which could enhance investment opportunities in U.S. territories. By redefining residence criteria, the bill intends to encourage more individuals to establish residency in these areas, potentially leading to an influx of residents who may stimulate local economies. Additionally, the adjustments to source rules could allow businesses operating in these territories to retain more of their earnings, contributing further to economic growth in the region.

Summary

House Bill 1034, known as the Territorial Tax Equity and Economic Growth Act of 2023, aims to amend the Internal Revenue Code of 1986 specifically to modify residence and source rules affecting U.S. territories. The bill seeks to promote economic recovery by adjusting how income is taxed for individuals and businesses in U.S. possessions like Guam, American Samoa, Northern Mariana Islands, Puerto Rico, and the Virgin Islands. Notably, it proposes changes to how substantial presence and source rules are determined for taxation, potentially offering more favorable conditions for residents and corporations in these regions.

Contention

While the bill is designed to foster growth in U.S. possessions, concerns have been raised regarding the potential long-term implications of altering tax structures. Critics worry that modifying these taxation rules may undermine federal revenue or lead to inequities among U.S. territories and states, as the different tax treatments could incentivize businesses to relocate to territories for lower tax liabilities. Legislative discussions may revolve around balancing the benefits of localized economic growth against the need for consistent tax policies across the United States.

Companion Bills

US HB1037

Related Territorial Tax Parity and Clarification Act

US HB1036

Related Territorial Tax Parity Act of 2023

Previously Filed As

US HB364

Territorial Tax Equity and Economic Growth Act of 2025

US HB1036

Territorial Tax Parity Act of 2023

US HB1029

Territories Health Equity Act of 2023

US HB1055

Territorial Economic Recovery Act

US HB1039

Territorial Tax Parity and Fairness Act

US HB365

Territorial Tax Parity Act of 2025

US HB1037

Territorial Tax Parity and Clarification Act

US HB3982

Methane Reduction and Economic Growth Act

US HB1785

Historic Tax Credit Growth and Opportunity Act of 2023

US HB363

Territorial Economic Recovery Act

Similar Bills

No similar bills found.