H.R. 1034 — Territorial Tax Equity and Economic Growth Act of 2023

This bill modifies the residence and income source rules that apply with respect to the taxation of income from U.S. possessions (i.e., Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands). The bill specifies that a bona fide resident of a possession must have a substantial presence in the possession for at least 122 days during the year. Under current law, the person must be present for at least 183 days during the year. Under current law, income is not possession source income if it is treated as (1) income from sources within the United States, or (2) as effectively connected with the conduct of a trade or business within the United States. The bill a...