American Samoa Taxes for Individuals and Businesses

American Samoa’s distinct tax system is administered locally and operates under its own set of laws, separate from those of the United States. This autonomy means that standard U.S. tax rules do not always apply directly. This distinction affects personal and corporate tax obligations. For individuals, residency status is a primary determinant of how they are taxed, while for businesses, the structure of their operations dictates their tax liabilities.

Determining Your Tax Home

A central concept in the American Samoa tax system is whether an individual qualifies as a “bona fide resident.” This is a specific legal status defined by three distinct tests. The outcome of this assessment dictates how an individual’s worldwide income is treated for tax purposes.

The first is the presence test, which measures an individual’s time spent in the territory. To satisfy this requirement, a person must be physically present in American Samoa for at least 183 days during the taxable year. Any part of a day spent in American Samoa counts as a day of presence.

The tax home test examines the location of an individual’s principal place of business or employment. A tax home is the entire city or general area of one’s main post of duty, regardless of where the family home is maintained. If an individual does not have a regular place of business, their tax home may be considered the place where they regularly live.

The final component is the closer connection test, which serves as a tie-breaker for individuals who might have connections to both American Samoa and the United States. To be a bona fide resident, a person must not have a closer connection to the United States than to American Samoa. Factors considered include:

• The location of one’s permanent home
• The location of one’s family
• The location of one’s personal belongings
• Where an individual has their banking relationships
• Where an individual votes
• Where an individual holds memberships in social or religious organizations

The Individual Income Tax System

The foundation of American Samoa’s individual income tax system is a “mirror code.” This means the territory has adopted the U.S. Internal Revenue Code (IRC) as its own local tax law. In practice, the text of the IRC is used, but “American Samoa” is substituted for “United States” wherever it appears.

Residents of American Samoa are subject to tax on their worldwide income. A benefit for these residents is that they generally only have to file a tax return with American Samoa. However, if a resident has income from U.S. sources, they may need to file a U.S. return and use Form 4563 to exclude income derived from sources within American Samoa from their U.S. taxable income.

To qualify for the exclusion on Form 4563, the income must be from American Samoa sources. This includes wages earned for services performed in the territory, as well as income from businesses located there. Income from investments in the U.S. or other countries would not be eligible for this exclusion.

U.S. citizens or residents who do not meet the criteria for being a bona fide resident but earn income there must file a U.S. tax return and report all income, including that from American Samoa. They can claim a tax credit for any income taxes paid to American Samoa on that income. This credit is calculated on Form 1116 and prevents double taxation.

Business and Other Territorial Taxes

The corporate income tax system in American Samoa also operates under the mirror code. Corporate tax rates are progressive, starting at 14% on the first $25,000 of taxable income and increasing across several brackets to a top rate of 44% for income over $335,000.

In addition to income tax, businesses may be subject to an alternative minimum tax. This tax is calculated at a rate of 2% of gross revenue and is payable only if it exceeds the company’s regular corporate income tax liability. New businesses are exempt from this tax during their first two years of operation.

Beyond income taxes, the territory imposes other taxes that affect both individuals and businesses. A wage tax of 2% is withheld from employee paychecks, which is separate from the regular income tax withholding system. Businesses must also be aware of various excise taxes applied to specific goods and services, such as fuel and imported products.

The tax system also includes provisions for foreign corporations operating in American Samoa. Income sourced from the territory and received by a foreign entity is subject to a 30% withholding tax. A branch profits tax of 30% also applies to the adjusted income of a foreign corporation’s American Samoa branch.

Filing Requirements and Procedures

The primary agency for tax administration in the territory is the American Samoa Tax Office (ASTO). All tax returns for bona fide residents of American Samoa are filed directly with the ASTO, not the U.S. Internal Revenue Service (IRS). The ASTO’s offices are located in the Executive Office Building in Pago Pago.

Bona fide residents of American Samoa who are U.S. citizens or resident aliens file Form 1040 with the ASTO, reporting their worldwide income. U.S. citizens who are not bona fide residents but have income from American Samoa will file Form 1040 with the IRS and will also need to file a separate return with the ASTO for their territory-sourced income.

Non-resident aliens who have income from American Samoa sources are required to file Form 1040-NR with the IRS. The filing requirements for these individuals can be complex, and they may also have a filing obligation with the ASTO.

After completing the appropriate forms, they must be submitted to the correct tax authority by the filing deadline, which generally mirrors the U.S. tax deadline of April 15. Payments can be made directly to the ASTO for taxes owed to American Samoa. Payments for taxes owed to the U.S. Treasury should be sent to the IRS.