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Congress·In Committee

Representative Plaskett Proposes Tax Rule Changes to Boost Economic Growth in U.S. Territories

Territorial Tax Equity and Economic Growth Act of 2025

about 1 year ago·View on Congress.gov

Legislative Progress

✓ Filed
Review
House
Senate
President

Key Points

  • This bill updates tax laws for people living in U.S. territories, including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. The goal is to help these islands grow their economies by making the tax system fairer for local residents and businesses.
  • It changes the "residency test" used to decide who qualifies for territory tax benefits. Currently, the rules are very strict about how many days a person must spend on the island. This bill makes those rules more flexible, allowing residents to maintain their status even if they have to travel for work or family.
  • The bill also changes how the government tracks where money is earned. It prevents the IRS from taxing certain island-based business activities as if they happened in the mainland U.S. This allows local companies to keep more of their earnings, which can lead to more jobs and higher wages in the territories.
  • These changes would start for the 2025 tax year. By simplifying these complicated rules, the bill aims to attract more investment to the territories and stop "brain drain," where talented workers leave the islands because the tax laws make it too difficult to stay and build a business.
TaxesEconomy Finance

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

State Impacts

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions
Jan 13, 2025House

Referred to the House Committee on Ways and Means.

Jan 13, 2025

Introduced in House

Related News

5 articles
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$75 billion firm wins carve-out in tax bill after lobbying push

The tax bill before Congress would partially exempt the U.S. Virgin Islands from a law meant to crack down on tax havens. The provision, included in the 'One Big Beautiful Bill,' would relax a global minimum tax for certain income from services provided in the territory.

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The Virgin Islands Consortium·about 1 year ago

USVI Visa Waiver Act and Tax Parity Measures Reintroduced by Plaskett to Boost Territory's Economy

Delegate Stacey Plaskett reintroduced the Territorial Tax Equity and Economic Growth Act, which adjusts residence and income source rules to promote economic recovery. The bill aims to make the tax system fairer for local residents and businesses by providing more flexible residency tests.

+
DLA Piper·7 months ago

What the One Big Beautiful Bill Act's tax provisions mean for businesses operating in Puerto Rico

The OBBBA, signed in July 2025, includes numerous amendments to the US Internal Revenue Code affecting Puerto Rico. It renames GILTI to 'net CFC tested income' and changes effective tax rates, impacting how island-based business activities are taxed compared to the mainland.

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Source Information

Document Type

Congressional Bill

Official Title

Territorial Tax Equity and Economic Growth Act of 2025

Bill NumberHR 364
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.