H.R.858 - Restore Economic Vitality and Investment in the Virgin Islands Act; REVIVE VI Act (119th Congress)
Summary
H.R. 858, also known as the REVIVE VI Act, proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to modify the calculation of global intangible low-taxed income (GILTI) by excluding certain income derived from services performed in the Virgin Islands. This exclusion applies to qualified Virgin Islands services income, specifically compensation for labor or personal services performed in the Virgin Islands by corporations formed under its laws.
Expected Effects
The bill intends to incentivize economic activity and investment in the Virgin Islands by providing tax relief for specific types of income. By excluding qualified Virgin Islands services income from the GILTI calculation, the bill seeks to make the Virgin Islands a more attractive location for businesses and investment. This could lead to increased economic activity and job creation in the region.
Potential Benefits
- Increased Investment: The tax incentive could attract more businesses to invest in the Virgin Islands.
- Job Creation: New businesses and expanded operations could lead to more employment opportunities for residents.
- Economic Growth: The overall economy of the Virgin Islands could experience a boost due to increased activity.
- Support for Local Businesses: The bill specifically targets corporations formed under the laws of the Virgin Islands, potentially strengthening local businesses.
- Attract Qualified Individuals: The bill may attract qualified individuals to move to the Virgin Islands to provide services.
Most Benefited Areas:
Potential Disadvantages
- Potential for Abuse: The bill includes a provision for the Secretary to prescribe regulations to prevent abuse, indicating a recognized risk of exploitation of the tax benefit.
- Complexity: The specific definitions and requirements could create complexity for businesses trying to comply with the law.
- Limited Scope: The benefits are limited to specific types of income and businesses, potentially excluding other sectors of the economy.
- Revenue Loss: Excluding this income from GILTI calculations could result in a slight decrease in federal tax revenue.
- Uncertainty: The effectiveness of the bill in achieving its goals is not guaranteed and depends on various economic factors.
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the US Constitution. The bill does not appear to infringe upon any specific constitutional rights or protections. The bill's focus on the Virgin Islands aligns with Congress's authority to govern territories and possessions of the United States, as implied by Article IV, Section 3, Clause 2.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).