Tax News

CCH (cch.taxgroup.com) reports:

Residents of American Samoa, Guam, the Commonwealth of the Northern Mariana Island, and the United States Virgin Islands (U.S.V.I.) will soon be receiving economic stimulus payments under plans and amounts approved by Treasury Secretary Henry M. Paulson, Jr. on April 28. Unlike residents on the mainland, residents of these territories will receive their payments from their local governments and not the IRS. However, the federal government, and not local governments, will fund the payments.
Advance Funding
When Congress passed the Economic Stimulus Act of 2008 (P.L. 110-185), it included special provisions for U.S. territories. Eligible residents of the territories will receive economic stimulus payments but not from the IRS. Rather, their local governments will distribute the payments from funds provided by the federal government.
The governments of the territories requested that the Treasury Department arrange for the funds to be transferred before they distributed the economic stimulus payments. "We were determined to protect the insular treasuries from loss, and I am pleased that the Bush administration is providing this advance payment," Donna M. Christensen, U.S.V.I. delegate to Congress, said in a statement after Paulson's announcement.
Pre-Approval
Congress also required the Treasury Secretary to approve the territories' distribution plans and payment amounts. Paulson approved the distribution plan of Puerto Rico, a territory with a non-mirror Tax Code, on April 16, 2008 (TAXDAY, 2007/04/17, T.1). The distribution plan of American Samoa, another non-mirror Code territory, along with the payment amounts of Guam, the Northern Mariana Islands and the U.S.V.I., all mirror Code jurisdictions, were approved on April 28.
Amounts
American Samoa. American Samoa submitted a plan for distribution of the economic stimulus payments to the Treasury Department earlier this month and estimated the cost of distributing the rebates at $20.4 million. The federal government will make a payment in this amount to the government of American Samoa to fund distribution of the payments.
Guam. Guam will receive $52.2 million to fund distribution of the economic stimulus payments.
Northern Mariana Islands. The Treasury Department has allocated $16.1 million to fund distribution of the economic stimulus payments in the Northern Mariana Islands.
U.S.V.I. The U.S.V.I. will receive $41.5 million to fund distribution of the economic stimulus payments. The U.S.V.I. Bureau of Internal Revenue had previously announced that it will begin distributing payments in June.
By George L. Yaksick, Jr., CCH News Staff
Treasury Department News Release, TDNR HP-949, 2008FED ¶46,417
Other References:
Code Sec. 6428
CCH Reference - 2008FED ¶38,869.60
Tax Research Consultant
CCH Reference - TRC INDIV: 57,900