Page:United States Statutes at Large Volume 102 Part 4.djvu/751

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3721

SEC. 6132. VIRGIN ISLANDS TREATED AS QUALIFIED BASIN COUNTRY.

(a) IN GENERAL.—Subparagraph (B) of section 936(d)(4) of the 1986 Code is amended by inserting "and the Virgin Islands" after "section 274(h)(6)(A)". OJ) EFFECTIVE DATE.—The amendment made by this section shall 26 USC 936 note. apply to investments made after the date of the enactment of this Act. SEC. 6133. TREATMENT OF CERTAIN UNITED STATES OBLIGATIONS HELD BY POSSESSION BANKS.

(a) IN GENERAL.—Subsection (e) of section 882 of the 1986 Code is amended— (1) by inserting "which is not portfolio interest (as defined in section 881(c)(2))'^ before "shall", and (2) by striking out the last sentence thereof. (b) EXCLUSION FROM BRANCH PROFITS TAX.—Paragraph (2) of section 884(d) of the 1986 Code is amended by striking out "or" at the end of subparagraph (C), by striking out the period at the end of subparagraph (D) and inserting in lieu thereof ", or" and by inserting after subparagraph (D) the following new subparagraph: "(E) income treated as effectively connected with the conduct Business and of a trade or business within the United States under section industry. 882(e)." (c) EFFECTIVE DATE.—The amendments made by this subsection 26 USC 882 note. shall apply to taxable years beginning after December 31, 1988. SEC. 6134. TREATMENT OF CERTAIN GAMBLING WINNINGS RECEIVED BY NONRESIDENT ALIENS. (a) EXEMPTION FROM TAX.—

(1) Section 871 of the 1986 Code (relating to tax on nonresident alien individuals) is amended by redesignating subsection 0) as subsection (k) and by inserting after subsection (i) the following new subsection: "(j) EXEMPTION FOR CERTAIN GAMBUNG WINNINGS.—No tax shall be imposed under paragraph (I)(A) of subsection (a) on the proceeds from a wager placed in any of the following games: blackjack, baccarat, craps, roulette, or big-6 wheel. The preceding sentence shall not apply in any case where the Secretary determines by regulation that the collection of the tax is administratively feasible." (2) Subsection (c) of section 1441 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(11) CERTAIN GAMBUNG WINNINGS.—No tax shall be required to be deducted and withheld under subsection (a) from any amount exempt from the tax imposed by section 871(a)(l)(A) by reason of section 871(j)." (b) EFFECTIVE DATE.—The amendments made by subsection (a) 26 USC 871 note. shall take effect on the date of the enactment of this Act. SEC. 6135. ELECTION TO BE TREATED AS DOMESTICORPORATION.

(a) IN GENERAL.—Section 953 of the 1986 Code is amended by adding at the end thereof the following new subsection: "(d) ELECTION BY FOREIGN INSURANCE COMPANY To B E TREATED AS DOMESTICORPORATION.— "(1) IN GENERAL.—If—

"(A) a foreign corporation is a controlled foreign corporation (as defined in section 957(a) by substituting 25 percent

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