Territorial Tax Parity Act of 2025

# Territorial Tax Parity Act of 2025 - Plain Language Summary **What the Bill Would Do:** This bill aims to create more equal tax treatment between residents of U.S. territories (Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, and Northern Mariana Islands) and mainland U.S. residents. Currently, territorial residents have different tax rules, particularly regarding foreign income taxation. The bill would adjust these rules to provide "tax parity"—meaning more uniform treatment across all U.S.

jurisdictions. **Who It Affects:** The legislation primarily impacts millions of residents living in U.S. territories, as well as businesses operating in those areas. It could also affect mainland companies with operations in the territories, and potentially the territorial governments' tax revenues. **Current Status:** As of now, the bill (HR 365) is in committee and has not yet been voted on by the full House. It was introduced by Delegate Stacey Plaskett representing the U.S. Virgin Islands. The bill remains in the early stages of the legislative process, meaning significant changes could still occur before any potential vote.