To permanently extend the American Samoa economic development tax credit.

Bill Number

H.R. 399

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-01-14: Referred to the House Committee on Ways and Means.

Last Updated

2026-03-13T14:10:57Z

AI-Generated Summary

Purpose

This bill (H.R. 399) aims to make the American Samoa economic development tax credit a permanent feature of U.S. tax law, rather than letting it expire. The tax credit is a financial incentive that reduces a business's federal tax bill to encourage economic growth and job creation in American Samoa, a U.S. territory.

Key Provisions

• Amendment to Existing Law: The bill modifies Section 119(d) of the Tax Relief and Health Care Act of 2006 (a note to 26 U.S.C. § 30A), which originally created the tax credit.
• It removes language limiting the credit to the "first 16" years (for certain possessions corporations) and the period ending "before January 1, 2022."
• It also removes similar limits for the "first 10" years (for domestic corporations) and the same end date.
• Effective Date: The changes apply to taxable years (the periods for which taxes are calculated, typically calendar or fiscal years) beginning after December 31, 2021, making the extension retroactive.

Significant Changes to Existing Law

• Prior to this bill, the tax credit was temporary, set to expire after December 31, 2021, limiting its availability to a fixed number of years from its start.
• The amendment eliminates these time restrictions, converting the credit from temporary to indefinite (permanent), allowing qualifying businesses to claim it ongoing without an end date.

Potential Impacts

• On Businesses and Economy: Could boost investment and employment in American Samoa by providing ongoing tax savings for qualifying activities, such as manufacturing or other economic development efforts.
• On Government Agencies: The U.S. Department of the Treasury and Internal Revenue Service (IRS) would need to administer the credit indefinitely, potentially increasing administrative workload but reducing the need for future legislative renewals.
• On Citizens and Territories: Residents and workers in American Samoa may see indirect benefits through economic growth, though the credit primarily aids businesses rather than individuals directly.
• On Federal Budget: May reduce federal tax revenue over time due to ongoing credits claimed by eligible companies, with no specified cap on total benefits.
• International Relations: Minimal direct impact, as it focuses on a U.S. territory, but could indirectly support U.S. economic interests in the Pacific region.

Main Stakeholders Affected

• Businesses Operating in American Samoa: Primary beneficiaries, including U.S.-based companies with operations there, who can claim up to a specified percentage of qualified investment as a tax credit.
• Government of American Samoa: Gains from potential economic stimulation, which could increase local tax revenues and reduce reliance on federal aid.
• U.S. Federal Government (Treasury and IRS): Responsible for implementing and overseeing the credit, facing long-term revenue implications.
• U.S. Congress: The bill was introduced by Rep. Radewagen (likely representing American Samoa interests) and referred to the House Committee on Ways and Means, which handles tax policy.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens tax incentives for U.S. territories under the Internal Revenue Code, ensuring consistency in federal support without needing repeated congressional action. No challenges to constitutionality are evident, as it builds on existing authority for territory-specific tax benefits.
• Constitutional: Aligns with Congress's plenary power over U.S. territories (under Article IV, Section 3 of the Constitution), allowing tailored economic policies for places like American Samoa.
• Political: Highlights ongoing debates on equitable treatment of U.S. territories in federal tax policy, potentially setting a precedent for similar extensions to other regions (e.g., Puerto Rico or Guam). It reflects bipartisan interest in territorial development but could spark discussions on federal spending priorities amid budget constraints.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Del. Radewagen, Aumua Amata Coleman [R-AS]

Recent Actions

• 2025-01-14: Referred to the House Committee on Ways and Means.
• 2025-01-14: Introduced in House
• 2025-01-14: Introduced in House

Bill Versions

• To permanently extend the American Samoa economic development tax credit. — issued 2025-01-14 — PDF (2 pages)