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the CNMI, under certain conditions, the right to enact their own
tax laws, independent of the Code, with respect to income (1)
from sources within, or effectively connected with the conduct of
a trade or business within, the possession, or (2) received or
accrued by a resident of the possession. TRA 1986 sec. 1271(a).
TRA 1986 section 1271(b) makes that grant of authority applicable
to Guam, American Samoa, or the CNMI provisional on the existence
of an implementing agreement “between the United States and such
possession”. (Emphasis added.)
TRA 1986 section 1272 amends old section 931 (as well as
other Code provisions not pertinent here). Specifically, TRA
1986 section 1272(a) provides in pertinent part: “In General.--
Section 931 (relating to income from sources within possessions
of the United States) is amended to read as follows: ‘SEC. 931.
INCOME FROM SOURCES WITHIN GUAM, AMERICAN SAMOA, OR THE NORTHERN
MARIANA ISLANDS.’” See supra p. 14.
TRA 1986 sections 1271 and 1272 do not specifically address
the other U.S. possessions. Nonetheless, the language of the
statute, taken in context, indicates that Congress intended to
provide an exclusion from gross income under section 931 as
amended by TRA 1986 section 1272(a) only for bona fide residents
of Guam, American Samoa, and the CNMI, and only if the specified
possession has an implementing agreement in force with the United
States. Had Congress intended to retain the benefits of section
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