United States Code (Last Updated: May 24, 2014) |
Title 26. INTERNAL REVENUE CODE |
SubTitle A. Income Taxes |
Chapter 1. NORMAL TAXES AND SURTAXES |
SubChapter N. Tax Based on Income From Sources Within or Without the United States |
Part III. INCOME FROM SOURCES WITHOUT THE UNITED STATES |
SubPart D. Possessions of the United States |
§ 934. Limitation on reduction in income tax liability incurred to the Virgin Islands
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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”, approvedJuly 12, 1921 (48 U.S.C. 1397), or pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approvedJuly 22, 1954 (48 U.S.C. 1642), 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.
Amendments
2004—Subsec. (b)(4). Pub. L. 108–357 struck out “the Virgin Islands or” before “the United States” in two places.
1986—Subsec. (a). Pub. L. 99–514, § 1275(c)(2)(A), struck out “or (c) or in section 934A” after “subsection (b)”.
Subsec. (b). Pub. L. 99–514, § 1275(c)(1), (2)(B), added subsec. (b) and struck out former subsec. (b) which excepted from subsec. (a) domestic or Virgin Islands corporations to the extent they derived income from sources without the United States under certain conditions.
Subsec. (c). Pub. L. 99–514, § 1275(c)(1), struck out subsec. (c) which provided an exception to subsec. (a) of this section for individual citizens of the United States residing in the Virgin Islands to the extent their income is derived from sources within the Virgin Islands.
Subsec. (d). Pub. L. 99–514, § 1275(c)(1), struck out subsec. (d) which related to requirement to supply information.
Subsec. (e). Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (e) which provided for tax treatment of intangible property income of certain domestic corporations.
Subsec. (f). Pub. L. 99–514, § 1275(a)(2)(A), struck out subsec. (f) which provided a transitional rule for applying subsec. (b)(2) of this section with respect to taxable years beginning after
Pub. L. 99–514, § 1876(f)(2), struck out subsec. (f) which provided that subsec. (a) of this section not apply in the case of a Virgin Islands corporation which is a FSC.
1984—Subsec. (f). Pub. L. 98–369 added subsec. (f) relating to FSC.
1983—Subsec. (a). Pub. L. 97–455 inserted “or in section 934A” after “subsection (b) or (c)”.
1982—Subsec. (b)(2). Pub. L. 97–248, § 213(b)(1), substituted “65 percent” for “50 percent”.
Subsec. (e). Pub. L. 97–248, § 213(b)(2), added subsec. (e).
Subsec. (f). Pub. L. 97–248, § 213(b)(2), added a temporary subsec. (f) which provided that in applying subsec. (b)(2) with respect to taxable years beginning after
1976—Subsec. (b). Pub. L. 94–455, § 1901(a)(118), struck out “For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States”.
Subsec. (d). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in two places.
Effective Date Of Amendment
Amendment by Pub. L. 108–357 applicable to taxable years ending after
Amendment by section 1275(a)(2)(A), (c)(1), (2) of Pub. L. 99–514 applicable to taxable years beginning after
Amendment by section 1876(f)(2) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
Amendment by Pub. L. 98–369 applicable to transactions after
Pub. L. 97–455, § 1(e),
Amendment by Pub. L. 97–248 applicable to taxable years beginning after
Amendment by section 1901(a)(118) of Pub. L. 94–455 applicable with respect to taxable years beginning after
Effective Date
Pub. L. 86–779, § 4(e)(1),
Miscellaneous
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after
For provisions requiring the Secretary of the Treasury to submit a report to Congress respecting the operation and effect of subsec. (b) of this section for the year 1981 and each second calendar year thereafter, see section 441(a) of Pub. L. 98–369, set out as a note under section 936 of this title.