Territorial Tax Parity Act of 2025

House Votes

This bill updates federal tax rules that apply to people and businesses in U.S. territories and possessions. It changes how the tax law decides who counts as a resident and where income is considered earned, with the goal of helping local economies in the territories. It also updates how sales of personal property are treated for tax purposes. These changes start with the 2025 tax year (taxable years beginning after December 31, 2024).

Key points:

• Who is affected: People and businesses in U.S. territories/possessions.
• What changes: Rules for tax “residence” and the “source” of income, plus how personal property sales are treated for taxes, to support economic recovery in the territories.
• When: Applies to tax years starting after December 31, 2024.