Tax laws American Samoa (US)
American Samoa, an unincorporated U.S. territory, has its own unique set of tax laws, which are distinct from those of the 50 states. Although American Samoa follows many principles of U.S. federal tax law, it operates under its own local tax system. Here’s an overview of the tax laws in American Samoa:
1. Income Tax
Individual Income Tax:
The income tax system in American Samoa is territorial, meaning only income sourced within the territory is subject to taxation. Residents are taxed on their worldwide income, while non-residents are taxed only on income earned within American Samoa.
The rates for personal income tax are progressive, similar to U.S. federal tax brackets, and are as follows:
- Up to $10,000: 7%
- $10,001 to $25,000: 9%
- $25,001 to $40,000: 11%
- $40,001 to $55,000: 13%
- $55,001 to $70,000: 15%
- Above $70,000: 17%
Corporate Income Tax:
Like personal income tax, corporate income tax is applied only to income earned within American Samoa. The corporate tax rates are as follows:
- 0% for income up to $10,000
- 12% for income exceeding $10,000
2. Federal Income Tax
American Samoa has its own income tax system, so residents are generally not subject to U.S. federal income taxes. However, federal employment taxes (Social Security and Medicare) still apply to workers in American Samoa.
- Self-employed individuals in American Samoa are required to pay self-employment taxes (Social Security and Medicare).
- Wages earned by employees in American Samoa are subject to federal income tax withholding but not the federal income tax itself. Employers withhold federal income taxes but those with earnings from American Samoa can claim them back through a tax credit.
3. Sales Tax (General Excise Tax)
General Excise Tax (GET): American Samoa does not have a sales tax like other U.S. states. Instead, it has a General Excise Tax (GET), which is applied to the gross receipts from the sale of goods and services.
- The rate is generally 4% for most goods and services.
- Exemptions include certain services, such as medical and educational services, as well as sales of certain goods like food and medicines.
4. Property Tax
Property taxes in American Samoa are imposed at the local level, and the rates are set by the American Samoa Government (ASG). Property taxes are primarily levied on real estate, including land and buildings.
The property tax rates can vary depending on the location, but generally, the tax is assessed based on the value of the property.
Personal property tax may also apply to certain business assets or vehicles in American Samoa.
5. Social Security and Medicare Taxes
Social Security and Medicare taxes are mandatory for both employees and employers in American Samoa, in alignment with U.S. federal tax law.
- Social Security: 6.2% on income up to a set threshold (which changes annually).
- Medicare: 1.45% on all earned income (there is no income ceiling for Medicare tax).
6. Excise Taxes
There are various excise taxes imposed on certain goods, such as tobacco, alcohol, and fuel. These are typically imposed at the time of importation into American Samoa.
- Tobacco products, alcohol, and gasoline are taxed at specific rates to help generate revenue for the government.
7. Estate and Gift Taxes
- Estate taxes: American Samoa does not impose its own estate tax. However, residents may still be subject to U.S. federal estate tax if their estate exceeds the federal exemption threshold.
- Gift taxes: Similar to estate taxes, gift taxes in American Samoa are governed by U.S. federal law, and residents are subject to the same exemptions and rules that apply in the mainland United States.
8. Other Taxes
Business License Tax: Businesses operating in American Samoa must obtain a business license and may be subject to various business taxes and fees based on their operations and revenues.
This includes fees for operating a business in certain sectors such as retail, wholesale, or services.
The tax rate for businesses can vary based on the size and type of business.
9. Tax Filing and Compliance
- Taxpayers in American Samoa must file returns with the American Samoa Government's Department of Treasury or other relevant tax authorities.
- Individual Income Tax returns are filed by April 15th of the following year.
- Corporate tax returns are also due on April 15th.
- Self-employed individuals must also file for self-employment taxes, including Social Security and Medicare contributions.
10. Tax Incentives
- American Samoa offers several tax incentives to encourage investment and economic development, including:
- Tax holidays for qualifying businesses.
- Tax exemptions for certain types of income, particularly for foreign investors in manufacturing and export sectors.
- Reduced tax rates for businesses operating in Special Economic Zones or participating in certain government programs aimed at promoting growth.
Conclusion
American Samoa’s tax system operates independently from the U.S. federal tax system in many areas, with a focus on encouraging local businesses and attracting investment. The island territory has a territorial tax system that taxes income earned within its boundaries, while also applying some elements of U.S. tax law, especially for employment taxes. Additionally, the General Excise Tax (GET) serves as a key revenue generator, while certain federal tax laws, such as Social Security and Medicare contributions, apply.
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