Congresswoman Stacey E. Plaskett Introduces Hr 6648 - the Territorial Economic Recovery Act
Congresswoman Stacey E. Plaskett released the following statement after introducing HR 6648, the Territorial Economic Recovery Act:
"To compensate for historical disadvantages, and to create jobs and middle-class economies, the territories have historically relied on provisions in the U.S. tax code that treat U.S. investment in the territories more favorably than investment in foreign jurisdictions. However, recently, including through new taxes on global intangible low taxed income (GILTI) in the Tax Cuts and Jobs Act of 2017, U.S. territories have been treated the same as foreign countries. This has had a negative impact on private investment and job creation in the Virgin Islands.
"To remedy this unintended result, I have introduced H.R. 6648, the Territorial Economic Recovery Act, to treat qualified investment in U.S. territories as domestic -- rather foreign -- for purposes of the GILTI tax regime. In other words this bill will place the Territories on par with other states here in America. This legislation is not intended to favor the issue of status in any of the U.S. territories.
"HR 6648 would implement a limitation on the GILTI tax for businesses operating in U.S. territories. To qualify, companies would have to ensure that they have an active trade or business in a territory or possession of the United States, and that income from the business would be limited to possession-sourced income.
"The COVID-19 pandemic has devastated local economies, with an especially negative impact in U.S. territories. The Virgin Islands is NOT a foreign country, and this GILTI impediment has had a negative impact on private investment and job creation in the Virgin Islands. This bill will not only create jobs, but it will bring tax relief for the Virgin Islands, and allow for more diversification to our economy to bring in longer-term economic growth.
"I look forward to working with my colleagues both in the House and the Senate and eventually the Administration to make sure this bill gets signed into law."