By Bernie Becker - 08/11/14 05:36 PM EDT
Washington needs to make it clear whether residents of U.S. territories owe a tax on investments enacted as part of ObamaCare, according to a series of advocates for certified public accountants.
As the accountants noted, residents of those territories don’t receive the benefits of the Affordable Care Act, and the investment tax was put into place solely to help finance the healthcare law.
But the revenue departments for both Guam and the Virgin Islands have said taxpayers from their territories do owe the 3.8 percent tax on certain capital gains and dividends, “causing much confusion among taxpayers and practitioners,” according to the accounting organizations.
In a letter to congressional delegates, accountant groups from the U.S., the Virgin Islands and Guam said they weren’t weighing in on whether residents of the territories should pay the tax from the Democratic healthcare law.
But with the tax going into effect in 2013, the groups said that Washington had to give taxpayers clarity fast, given that extensions for last year’s returns only last until October.
“An authoritative statement from the U.S. Congress or Treasury is needed as soon as possible for taxpayers to correctly complete their 2013 income tax filings,” the groups wrote.
The groups pressed lawmakers to ask the Treasury to make clear once and for all whether the tax is owed in the territories.
Residents of those three U.S. territories are subject to many of the same tax laws as taxpayers in the 50 states, though the revenue instead goes to the territorial government.