Territorial Tax Parity and Fairness Act

This bill amends the tax code to remove a specific exclusion for bona fide residents of the U.S. Virgin Islands who receive dividends from Virgin Islands corporations. It changes how income from these dividends is treated, ensuring such income is no longer excluded from taxation under certain provisions for Virgin Islands residents. The key provision eliminates a tax advantage previously available to these residents by aligning the treatment of Virgin Islands-sourced dividends with standard tax rules. The change applies to taxable years beginning after December 31, 2022, directly affecting Virgin Islands residents receiving qualifying dividends from local corporations.