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26 U.S.C. § 934 — Limitation on reduction in income tax liability incurred to the Virgin Islands

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 934 — Limitation on reduction in income tax liability incurred to the Virgin Islands

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Source file: Laws/federal/codes/united-states-code/title-26/section-934-limitation-on-reduction-in-income-tax-liability-incurred-to-the-virgin-i--673ee84e93.md
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Source location: Title 26, Chapter 1, § 934; chapter-001-normal-taxes-and-surtaxes.md

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**(a) General rule** Tax liability incurred to the Virgin Islands pursuant to this subtitle, as made applicable in the Virgin Islands by the Act entitled “An Act making appropriations for the naval service for the fiscal year ending June 30, 1922, and for other purposes”, approved July 12, 1921 ([48 U.S.C. 1397](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title48-section1397&num=0&edition=prelim)), or pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approved July 22, 1954 ([48 U.S.C. 1642](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title48-section1642&num=0&edition=prelim)), shall not be reduced or remitted in any way, directly or indirectly, whether by grant, subsidy, or other similar payment, by any law enacted in the Virgin Islands, except to the extent provided in subsection (b). **(b) Reductions permitted with respect to certain income** (1) **In general** — Except as provided in paragraph (2), subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income derived from sources within the Virgin Islands or income effectively connected with the conduct of a trade or business within the Virgin Islands. (2) **Exception for liability paid by citizens or residents of the United States** — Paragraph (1) shall not apply to any liability payable to the Virgin Islands under section 932(b). (3) **Special rule for non-United States income of certain foreign corporations** (A) *In general* — In the case of a qualified foreign corporation, subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income which is derived from sources outside the United States and which is not effectively connected with the conduct of a trade or business within the United States. (B) *Qualified foreign corporation* — For purposes of subparagraph (A), the term “qualified foreign corporation” means any foreign corporation if less than 10 percent of— (i) the total voting power of the stock of such corporation, and (ii) the total value of the stock of such corporation, is owned or treated as owned (within the meaning of section 958) by 1 or more United States persons. (4) **Determination of income source, etc.** — The determination as to whether income is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall be made under regulations prescribed by the Secretary.

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Federal law — U.S. Code and appendices · legal_authorities

48 U.S.C. § 1642 — Use of certain proceeds for expenditure; income tax obligations of inhabitants

The proceeds of customs duties, the proceeds of the United States income tax, the proceeds of any taxes levied by the Congress on the inhabitants of the Virgin Islands, and the proceeds of all quarantine, passport, immigration, and naturalization fees collected in the Virgin Islands, (less the cost of collecting such duties, taxes and fees as may be directly attributable (as certified by the Comptroller of the Virgin Islands) to the importation of petroleum products until January 1, 1982: Provided, That any other retained costs not heretofore remitted pursuant to the Act of August 18, 1978, shall be immediately remitted to the Treasury of the Virgin Islands notwithstanding any other provision of law) shall be covered into the treasury of the Virgin Islands, and shall be available for expenditure as the Legislature of the Virgin Islands may provide: Provided, That the term “inhabitants of the Virgin Islands” as used in this section shall include all persons whose permanent residence is in the Virgin Islands, and such persons shall satisfy their income tax obligations under applicable taxing statutes of the United States by paying their tax on income derived from all sources both within and outside the Virgin Islands into the treasury of the Virgin Islands: Provided further, That nothing in this chapter shall be construed to apply to any tax specified in section 3811 of the Internal Revenue Code.

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26 U.S.C. § 1444 — Withholding on Virgin Islands source income

For purposes of determining the withholding tax liability incurred in the Virgin Islands pursuant to this title (as made applicable to the Virgin Islands) with respect to amounts received from sources within the Virgin Islands by citizens and resident alien individuals of the United States, and corporations organized in the United States, the rate of withholding tax under sections 1441 and 1442 on income subject to tax under section 871(a)(1) or 881 shall not exceed the rate of tax on such income under section 871(a)(1) or 881, as the case may be.

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26 U.S.C. § 937 — Residence and source rules involving possessions

**(a) Bona fide resident** For purposes of this subpart, section 865(g)(3), section 876, section 881(b), paragraphs (2) and (3) of section 901(b), section 957(c), section 3401(a)(8)(C), and section 7654(a), except as provided in regulations, the term “bona fide resident” means a person— (1) who is present for at least 183 days during the taxable year in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands, as the case may be, and (2) who does not have a tax home (determined under the principles of section 911(d)(3) without regard to the second sentence thereof) outside such specified possession during the taxable year and does not have a closer connection (determined under the principles of section 7701(b)(3)(B)(ii)) to the United States or a foreign country than to such specified possession. For purposes of paragraph (1), the determination as to whether a person is present for any day shall be made under the principles of section 7701(b). **(b) Source rules** Except as provided in regulations, for purposes of this title— (1) except as provided in paragraph (2), rules similar to the rules for determining whether income is income from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall apply for purposes of determining whether income is from sources within a possession specified in subsection (a)(1) or effectively connected with the conduct of a trade or business within any such possession, and (2) any income treated as income from sources within the United States or as effectively connected with the conduct of a trade or business within the United States shall not be treated as income from sources within any such possession or as effectively connected w

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26 U.S.C. § 48 — Energy credit

**(a) Energy credit** (1) **In general** — For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year. (2) **Energy percentage** (A) *In general* — Except as provided in paragraphs (6) and (7), the energy percentage is— (i) 6 percent in the case of— (I) qualified fuel cell property, (II) energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025, (III) energy property described in paragraph (3)(A)(ii), (IV) qualified small wind energy property, (V) waste energy recovery property, (VI) energy storage technology, (VII) qualified biogas property, (VIII) microgrid controllers, and (IX) energy property described in clauses (v) and (vii) of paragraph (3)(A), and (ii) in the case of any energy property to which clause (i) does not apply, 0 percent. (B) *Coordination with rehabilitation credit* — The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures. (C) *Nonapplication of increases to energy percentage* — For purposes of energy property described in subparagraph (A)(ii), the energy percentage applicable to such property pursuant to such subparagraph shall not be increased or otherwise adjusted by any provision of this section. (3) **Energy property** — For purposes of this subpart, the term “energy property” means any property— (A) which is— (i) equipment which uses solar energy to generate electricity, to he

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26 U.S.C. § 2 — Definitions and special rules

**(a) Definition of surviving spouse** (1) **In general** — For purposes of section 1, the term “surviving spouse” means a taxpayer— (A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and (B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151. (2) **Limitations** — Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse— (A) if the taxpayer has remarried at any time before the close of the taxable year, or (B) unless, for the taxpayer’s taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof). (3) **Special rule where deceased spouse was in missing status** — If an individual was in a missing status (within the meaning of section 6013(f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B): (A) the date on which the determination is made under [section 556 of title 37](https://uscode.house.gov/view.xhtml?req=granuleid:

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26 U.S.C. § 245 — Dividends received from certain foreign corporations

**(a) Dividends from 10-percent owned foreign corporations** (1) **In general** — In the case of dividends received by a corporation from a qualified 10-percent owned foreign corporation, there shall be allowed as a deduction an amount equal to the percent (specified in section 243 for the taxable year) of the U.S.-source portion of such dividends. (2) **Qualified 10-percent owned foreign corporation** — For purposes of this subsection, the term “qualified 10-percent owned foreign corporation” means any foreign corporation (other than a passive foreign investment company) if at least 10 percent of the stock of such corporation (by vote and value) is owned by the taxpayer. (3) **U.S.-source portion** — For purposes of this subsection, the U.S.-source portion of any dividend is an amount which bears the same ratio to such dividend as— (A) the post-1986 undistributed U.S. earnings, bears to (B) the total post-1986 undistributed earnings. (4) **Post-1986 undistributed earnings** — The term “post-1986 undistributed earnings” means the amount of the earnings and profits of the foreign corporation (computed in accordance with sections 964(a) and 986) accumulated in taxable years beginning after December 31, 1986— (A) as of the close of the taxable year of the foreign corporation in which the dividend is distributed, and (B) without diminution by reason of dividends distributed during such taxable year. (5) **Post-1986 undistributed U.S. earnings** — For purposes of this subsection, the term “post-1986 undistributed U.S. earnings” means the portion of the post-1986 undistributed earnings which is attributable to— (A) income of the qualified 10-percent owned foreign corporation which is effectively connected with the conduct of a trade or business within the

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26 U.S.C. § 931 — Income from sources within Guam, American Samoa, or the Northern Mariana Islands

**(a) General rule** In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include— (1) income derived from sources within any specified possession, and (2) income effectively connected with the conduct of a trade or business by such individual within any specified possession. **(b) Deductions, etc. allocable to excluded amounts not allowable** An individual shall not be allowed— (1) as a deduction from gross income any deductions (other than the deduction under section 151, relating to personal exemptions), or (2) any credit, properly allocable or chargeable against amounts excluded from gross income under this section. **(c) Specified possession** For purposes of this section, the term “specified possession” means Guam, American Samoa, and the Northern Mariana Islands. **(d) Employees of the United States** Amounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (1) or (2) of subsection (a).

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26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock bonus plans

**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section— (1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan; (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination)); (3) if the plan of which such trust is a part satisfies the requireme

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48 U.S.C. § 1397 — Income tax laws of United States in force; payment of proceeds; levy of surtax on all taxpayers

The income-tax laws in force in the United States of America and those which may hereafter be enacted shall be held to be likewise in force in the Virgin Islands of the United States, except that the proceeds of such taxes shall be paid into the treasuries of said islands: Provided further, That, notwithstanding any other provision of law, the Legislature of the Virgin Islands is authorized to levy a surtax on all taxpayers in an amount not to exceed 10 per centum of their annual income tax obligation to the government of the Virgin Islands.

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26 U.S.C. § 246 — Rules applying to deductions for dividends received

**(a) Deduction not allowed for dividends from certain corporations** (1) **In general** — The deductions allowed by sections 243 11 So in original. Probably should be followed by a comma. 245, and 245A shall not apply to any dividend from a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is a corporation exempt from tax under section 501 (relating to certain charitable, etc., organizations) or section 521 (relating to farmers’ cooperative associations). (2) **Subsection not to apply to certain dividends of Federal Home Loan Banks** (A) *Dividends out of current earnings and profits* — In the case of any dividend paid by any FHLB out of earnings and profits of the FHLB for the taxable year in which such dividend was paid, paragraph (1) shall not apply to that portion of such dividend which bears the same ratio to the total dividend as— (i) the dividends received by the FHLB from the FHLMC during such taxable year, bears to (ii) the total earnings and profits of the FHLB for such taxable year. (B) *Dividends out of accumulated earnings and profits* — In the case of any dividend which is paid out of any accumulated earnings and profits of any FHLB, paragraph (1) shall not apply to that portion of the dividend which bears the same ratio to the total dividend as— (i) the amount of dividends received by such FHLB from the FHLMC which are out of earnings and profits of the FHLMC— (I) for taxable years ending after December 31, 1984, and (II) which were not previously treated as distributed under subparagraph (A) or this subparagraph, bears to (ii) the total accumulated earnings and profits of the FHLB as of the time such dividend i

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