26 U.S.C. § 932 — Coordination of United States and Virgin Islands income taxes

(a) Treatment of United States residents. (1) This subsection applies for a tax year to an individual who (A)(i) is a United States citizen or resident, but is not a bona fide Virgin Islands resident for the entire year, and (ii) has income from Virgin Islands sources or income effectively connected with a trade or business there, or (B) files a joint return with a person described in (A). (2) Each person covered must file a tax return with both the United States and the Virgin Islands. (3) For the parts of this title concerning this chapter’s taxes, but not this section or section 7654, the United States is treated as including the Virgin Islands. (b) Portion payable to the Virgin Islands. (1) Each person covered by subsection (a) must pay the applicable percentage of the chapter’s tax for the year, calculated without paragraph (3), to the Virgin Islands. (2)(A) The applicable percentage is the percentage that Virgin Islands adjusted gross income bears to adjusted gross income. (B) Virgin Islands adjusted gross income is adjusted gross income calculated using only income from Virgin Islands sources and deductions properly assigned or allocated to that income. (3) The person receives a credit against United States tax equal to the amount required to be paid to the Virgin Islands under paragraph (1) that is actually paid. (c) Treatment of Virgin Islands residents. (1) This subsection applies to a person who (A) is a bona fide Virgin Islands resident for the entire year, or (B) files a joint return with such a person. (2) Each covered person must file a tax return with the Virgin Islands. (3) For the relevant parts of this title, but not this section or section 7654, the Virgin Islands is treated as including the United States. (4) For a person who is a bona fide Virgin Islands resident for the entire year, reports income from all sources and identifies each source on the Virgin Islands return, and fully pays the tax described in section 934(a) to the Virgin Islands for that income, United States gross income does not include amounts included on that return, and related deductions and credits are not counted. (d) For a joint return, apply this section based on the residence of the spouse with the greater adjusted gross income, determined without community-property rules. (e) When this section is used to determine tax owed to the Virgin Islands, federal law provisions mentioned in section 934(a) do not change how this section applies.