26 U.S.C. § 934 : US Code - Section 934: Limitation on reduction in income tax liability incurred to the Virgin Islands

Search 26 U.S.C. § 934 : US Code - Section 934: Limitation on reduction in income tax liability incurred to the Virgin Islands

(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), or pursuant to section
28(a) of the Revised Organic Act of the Virgin Islands, approved
July 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.