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Petitioners assert that, under TRA 1986 section 1277,11 Congress
made the effective date of the amendments to old section 931 for
all taxpayers conditional on the implementation of the agreements
between the United States and the specified possessions required
under TRA 1986 section 1271(b), 100 Stat. 2592.12 Petitioners
11TRA 1986 sec. 1277 provides, in pertinent part:
SEC. 1277. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in
this section, the amendments made by this subtitle
shall apply to taxable years beginning after December
31, 1986.
(b) Special Rule for Guam, American Samoa, and the
Northern Mariana Islands.--The amendments made by this
subtitle shall apply with respect to Guam, American
Samoa, or the Northern Mariana Islands (and to
residents thereof and corporations created or organized
therein) only if (and so long as) an implementing
agreement under section 1271 is in effect between the
United States and such possession.
12TRA 1986 sec. 1271 provides, in pertinent part:
SEC. 1271. AUTHORITY OF GUAM, AMERICAN SAMOA, AND THE
NORTHERN MARIANA ISLANDS TO ENACT REVENUE
LAWS.
(a) In General.--Except as provided in subsection
(b), nothing in the laws of the United States shall
prevent Guam, American Samoa, or the Northern Mariana
Islands from enacting tax laws (which shall apply in
lieu of the mirror system) with respect to income--
(1) from sources within, or effectively
connected with the conduct of a trade or business
within, any such possession, or
(2) received or accrued by any resident of
such possession.
(b) Agreements To Alleviate Certain Problems
Relating to Tax Administration.--Subsection (a) shall
apply to Guam, American Samoa, or the Northern Mariana
(continued...)
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