26 U.S.C. § 932 : US Code - Section 932: Coordination of United States and Virgin Islands income taxes

Search 26 U.S.C. § 932 : US Code - Section 932: Coordination of United States and Virgin Islands income taxes

(a) Treatment of United States residents
(1) Application of subsection
This subsection shall apply to an individual for the taxable
year if -
(A) such individual -
(i) 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
(ii) 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
(B) such individual files a joint return for the taxable year
with an individual described in subparagraph (A).
(2) Filing requirement
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.
(3) Extent of income tax liability
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.
(b) Portion of United States tax liability payable to the Virgin
Islands
(1) In general
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.
(2) Applicable percentage
(A) In general
For purposes of paragraph (1), the term "applicable
percentage" means the percentage which Virgin Islands adjusted
gross income bears to adjusted gross income.
(B) Virgin Islands 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.
(3) Amounts paid allowed as credit
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.
(c) Treatment of Virgin Islands residents
(1) Application of subsection
This subsection shall apply to an individual for the taxable
year if -
(A) such individual is a bona fide resident of the Virgin
Islands during the entire taxable year, or
(B) such individual files a joint return for the taxable year
with an individual described in subparagraph (A).
(2) Filing requirement
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.
(3) Extent of income tax liability
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.
(4) Residents of the Virgin Islands
In the case of an individual -
(A) who is a bona fide resident of the Virgin Islands during
the entire taxable year,
(B) 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
(C) 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.
(d) Special rule for joint returns
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.
(e) Special rule for applying section to tax imposed in Virgin
Islands
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).