26 U.S.C. § 932 — Coordination of United States and Virgin Islands income taxes
submitted 40 years ago by Pub. L. 99-514 to r/title-26-INTERNAL-REVENUE-CODE · 705 words · no verdicts yet
This section coordinates income-tax filing and payment for people connected with the United States and the Virgin Islands. It assigns part of certain United States tax to the Virgin Islands and sets rules for Virgin Islands residents and joint returns.
(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.
This subsection shall apply to an individual for the taxable year* if—
such individual—
is a citizen or resident of the United States (other than a bona fide resident* of the Virgin Islands during the entire taxable year), and
has income derived from sources within the Virgin Islands, or effectively connected with the conduct of a trade or business* within such possession, for the taxable year, or
such individual files a joint return* for the taxable year with an individual described in subparagraph (A).
Each individual to whom this subsection applies for the taxable year shall file his income tax return for the taxable year with both the United States and the Virgin Islands.
In the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the United States shall be treated as including the Virgin Islands.
Each individual to whom subsection (a) applies for the taxable year shall pay the applicable percentage of the taxes imposed by this chapter for such taxable year (determined without regard to paragraph (3)) to the Virgin Islands.
For purposes of paragraph (1), the term “applicable percentage” means the percentage which Virgin Islands adjusted gross income bears to adjusted gross income.
For purposes of subparagraph (A), the term “Virgin Islands adjusted gross income” means adjusted gross income determined by taking into account only income derived from sources within the Virgin Islands and deductions properly apportioned or allocable thereto.
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the taxes required to be paid to the Virgin Islands under paragraph (1) which are so paid.
This subsection shall apply to an individual for the taxable year if—
such individual is a bona fide resident of the Virgin Islands during the entire taxable year, or
such individual files a joint return for the taxable year with an individual described in subparagraph (A).
Each individual to whom this subsection applies for the taxable year shall file an income tax return for the taxable year with the Virgin Islands.
In the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the Virgin Islands shall be treated as including the United States.
In the case of an individual—
who is a bona fide resident of the Virgin Islands during the entire taxable year,
who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, and
who fully pays his tax liability referred to in section 934(a) to the Virgin Islands with respect to such income,
for purposes of calculating income tax liability to the United States, gross income shall not include any amount included in gross income on such return, and allocable deductions and credits shall not be taken into account.
In the case of a joint return, this section shall be applied on the basis of the residence of the spouse who has the greater adjusted gross income (determined without regard to community property laws) for the taxable year.
In applying this section for purposes of determining income tax liability incurred to the Virgin Islands, the provisions of this section shall not be affected by the provisions of Federal law referred to in section 934(a).
Source credit: (Added Pub. L. 99–514, title XII, § 1274(a), Oct. 22, 1986, 100 Stat. 2596; amended Pub. L. 100–647, title I, § 1012(w)(1)–(3), Nov. 10, 1988, 102 Stat. 3530; Pub. L. 108–357, title VIII, § 908(c)(2), Oct. 22, 2004, 118 Stat. 1656.)
- 1986Enacted · Pub. L. 99-514 · 100 Stat. 2596
- 1988Amended · Pub. L. 100-647 · 102 Stat. 3530
- 2004Amended · Pub. L. 108-357 · 118 Stat. 1656
A history note hasn’t been published yet. The record shows enactment by Pub. L. 99-514 on 1986-10-22.
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