or —_— eeee eet ang tis issue to the Department of Treasury, which will presenta detailed repoTt a these sections for the Administration. We stress, however, that the issues raised by these sections are complex. Customs laws, which may be Federal or local, may be applicable in one territory but not arcther. Also, the application of United States income tax _ laws differs from territory to territory. For exanple, the mirror believe that the Federal administration of taxes would intrude into territorial prerogatives and therefore oppose mardatcry Federal collection of territorial taxes. x=Sié agree that the proposal new contained in H.R. 3756 raises a significant question as to whether it reverses the long-standing United States Goverrment policy of fostering greater local self-govermment for the territories. . The Interagency Task Force reviewing territorial policy is addressing various issues, including tax administration, considered in these sections. Presidential decisions will be forthcoming later this year. Among the options to be considered by the Administration wilt be Federal training and technical assistance for territorial tax collection Section 204 +o ™ Section 204 would,extend the date of initial applicability of the Federa) income tax.to. tha.Northarn Mariana Islands from Jaruary 1, 1979, to Jarmary 1, 1982. Federal income tax laws became applicable to the Northern Mariana Islands beginning Jamary 1, 1979. TheAdministration has no objection to section 204. mae The Governar.cf theNorthern Mariane Islands statesthat pection 204 revere to would result in the loss of approximtely $300,000 anas'. treasury. and he. prefers the ‘provisions of section 3(d) Northern. of P.L. 9 348 to section 204. a i a