American Samoa Taxation: Understanding Tax Laws and Regulations

Discovering the Truth: Does American Samoa Pay Taxes?

As advocate for tax law, always intrigued by tax laws and regulations apply to territories regions world. One such territory that has always sparked my interest is American Samoa. The question of whether or not American Samoa pays taxes is a complex and nuanced one, and I am excited to delve into the details and provide a comprehensive answer to this intriguing question.

The Unique Tax Status of American Samoa

American Samoa is an unincorporated territory of the United States, and as such, it has a distinct tax status that sets it apart from both the mainland United States and other territories. The people of American Samoa are not required to pay federal income taxes on their local source income. Exemption provided through provision U.S. tax code, specifically section 935(a) of the Internal Revenue Code.

But What About Other Taxes?

American Samoans exempt federal income taxes local source income, still subject taxes, Social Security and Medicare Taxes. Additionally, American Samoa has its own territorial tax system, under which residents and businesses are subject to local taxes.

Case Study: The Case of Fitisemanu v. United States

In 2018, a case brought by a group of American Samoans challenged the long-standing practice of treating them as non-citizen nationals and exempt from birthright citizenship. Case raised questions The Unique Tax Status of American Samoa whether treated differently U.S. Territories. While the case did not directly address the issue of tax exemption, it reignited the debate surrounding the tax status of American Samoa and brought it to the forefront of national attention.

Statistics Data

Tax Category Applicability American Samoa
Federal Income Tax Exempt on local source income
Social Security and Medicare Taxes Applicable to American Samoans
American Samoa Territorial Tax Applies to residents and businesses in American Samoa

So, does American Samoa pay taxes? The answer is yes, but with significant exceptions and unique provisions that set it apart from other U.S. Territories. The tax status of American Samoa is a fascinating and complex subject that continues to be the focus of ongoing debate and legal challenges. Tax enthusiast, excited see issue continue evolve future.


Legal Contract: Taxation in American Samoa

It is important to clearly define the taxation laws and practices in American Samoa in a legal contract. The following terms and conditions outline the details of taxation in American Samoa.

Contracting Parties United States Government American Samoa Government
Effective Date [Date]

American Samoa is a territory of the United States and is subject to specific tax laws and regulations. The United States Government and the American Samoa Government enter into this contract to clarify the taxation obligations and practices within American Samoa.

Terms Conditions

1. American Samoa is not subject to federal income tax, but is required to pay local taxes to the American Samoa Government.

2. The United States Government shall not impose federal taxes on income earned in American Samoa by individuals who are bona fide residents of American Samoa.

3. The American Samoa Government shall have the authority to levy and collect taxes on income, property, and other forms of taxation as per the local laws and regulations.

4. Any disputes arising from taxation in American Samoa shall be resolved through legal processes and in accordance with applicable laws.

Signatures [Signature] [Signature]


Curious about American Samoa taxes? Here are the top 10 FAQs

Question Answer
1. Do residents of American Samoa pay federal income tax? No, American Samoa subject federal income tax, residents may still subject taxes Social Security and Medicare Taxes.
2. Are businesses in American Samoa required to pay federal income tax? Businesses American Samoa generally subject federal income tax, may still subject taxes Social Security and Medicare Taxes.
3. Do residents of American Samoa pay local taxes? American Samoa has its own tax system, and residents may be subject to local taxes on income, property, and goods and services.
4. Are there any tax incentives for businesses operating in American Samoa? Yes, there are tax incentives available to businesses in American Samoa, including tax credits for job creation and investment in certain industries.
5. Are residents of American Samoa eligible for the Earned Income Tax Credit (EITC)? No, residents American Samoa eligible EITC available taxpayers 50 states, District Columbia, certain U.S. Territories.
6. Do residents of American Samoa need to file a federal income tax return? Generally, residents of American Samoa are not required to file a federal income tax return unless they have income from other U.S. Sources.
7. Can residents of American Samoa claim the foreign earned income exclusion? Yes, residents of American Samoa can claim the foreign earned income exclusion if they meet the requirements for qualifying as a bona fide resident of a foreign country.
8. Are property taxes levied in American Samoa? Yes, property taxes are levied in American Samoa, and the rates and assessment methods vary by district and type of property.
9. Are there any tax treaties between American Samoa and foreign countries? No, American Samoa does not have any tax treaties with foreign countries, and it is not considered a foreign country for tax purposes.
10. How can I get more information about taxes in American Samoa? You can contact the American Samoa Department of Revenue for more information about taxes in American Samoa, or consult with a tax professional familiar with the territory`s tax laws.