Bill · H.R. 364· House(119-HR-364)
Territorial Tax Equity and Economic Growth Act of 2025
- Introduced
- 1/13/2025
- Last activity
- 1/13/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Stacey Plaskett
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill, known as the ``Territorial Tax Equity and Economic Growth Act of 2025'', aims to amend the Internal Revenue Code of 1986. The primary goal is to modify residence and source rules to assist with economic recovery in United States possessions. It specifically alters the requirements for being considered a bona fide resident in locations like Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands. The bill also modifies source rules regarding income and personal property sales. These changes are intended to apply to taxable years beginning after December 31, 2024.
Yes· 3 of 7
Does this cut taxes for small businesses?+5
The bill reduces the tax burden on income from preparatory or auxiliary activities within the United States for those in territories.
Is this likely to grow the economy?+4
The modification of residence and source rules is intended to provide for economic recovery in U.S. possessions.
Does this make it easier to run a small business?+3
The change to source rules provides relief for income derived from preparatory or auxiliary business activities.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Modified Resident Status: Under Section 2(a), the bill changes the substantial presence test for residents in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands by substituting '122 days' for '31 days'. This modification relates to determining who is a bona fide resident in these possessions.
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Source Rule Adjustments: Section 2(b) amends source rules regarding income attributable to an office or fixed place of business within the United States. Additionally, it adds provisions stating that income from activities within the United States that are of a preparatory or auxiliary character shall not be treated as income from sources within the United States or as effectively connected with a trade or business within the United States.
Potential Negative Impacts for People
- No negative impacts are explicitly stated in the text provided.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Reduces Small Business Taxes+5Improves Economic Growth+4Improves Small Business Support+3
- Demographic And Interest Groups
- Good For High Income Households+3Good For Hispanic Americans+3Good For Rural Residents+2Good For Urban Residents+2
- 1/13/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House