Bill > HR365

This bill, called the Territorial Tax Parity Act of 2025, proposes changes to the Internal Revenue Code that affect how income is taxed for U.S. territories and possessions. Specifically, the bill modifies source rules by amending two sections of the tax code: Section 937(b)(2) and Section 865(j)(3). Under the proposed changes, income will only be considered sourced from a U.S. possession if it is attributable to an office or fixed place of business within the United States, which will be determined using existing rules in section 864(c)(5). The bill also adds a reference to section 932 in the rules about personal property sales. These amendments would take effect for taxable years beginning after December 31, 2024, meaning the new tax rules would first apply to the 2025 tax year. The overall aim appears to be clarifying and potentially adjusting tax treatment for income generated in U.S. territories, with the goal of promoting economic recovery in these regions.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/365/all-info