Page:United States Statutes at Large Volume 100 Part 3.djvu/793

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2601

establishment of rules under which the evasion or avoidance of United States income tax shall not be permitted or facilitated by such possession. Any such implementing agreement shall be executed on behalf of the United States by the Secretary of the Treasury, after consultation with the Secretary of the Interior. (2) SECTION 1275(b).—

(A) IN GENERAL.—The amendment made by section 1275(b) shall apply with respect to— (i) any taxable year beginning after December 31, us 1986, and

(ii) any pre-1987 open year. (B) SPECIAL RULES.—In the case of any pre-1987 open year— (i) the amendment made by section 1275(b) shall not apply to income from sources in the Virgin Islands or income effectively connected with the conduct of a trade or business in the Virgin Islands, and ,,^<y.' (ii) the taxpayer shall be allowed a credit— •':•;.. (I) against any additional tax imposed by subtitle .or A of the Internal Revenue Code of 1954 (by reason of the amendment made by section 1275(b)) on ••" '• income not described in clause (i), (II) for any tax paid to the Virgin Islands before - o; fvjj the date of the enactment of this Act and attributable to such income. ' For purposes of clause (ii)(II), any tax paid before January 1, 1987, pursuant to a process in effect before August 16, 1986, shall be treated as paid before the date of the enactment of this Act. (C) PRE-1987 OPEN YEAR.—For purposes of this paragraph, the term "pre-1987 open year" means any taxable year beginning before January 1, 1987, if on the date of the i enactment of this Act the assessment of a deficiency of income tax for such taxable year is not barred by any law or rule of law. (D) EXCEPTION.—In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any domestic corporation if— (i) during the fiscal year which ended May 31, 1986, tjyjf such corporation was actively engaged directly or through a subsidiary in the conduct of a trade or business in the Virgin Islands and such trade or business consists of business related to marine activities, and / (ii) such corporation was incorporated on March 31, 1 1983, in Delaware. (E) EXCEPTION FOR CERTAIN TRANSACTIONS.—



(i) IN GENERAL.—In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any income derived from transactions described in clause (ii) by 1 or more corporations which were formed in Delaware on or about March 6, 1981, and which have owned 1 or more office buildings in St. Thomas, United States Virgin Islands, for at least 5 years before the date of the enactment of this Act. (ii) DESCRIPTION OF TRANSACTIONS.—The transactions

described in this clause are—

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