Situs Of Taxation And Double Taxation Flashcards
The maxim of Mobilia Sequuntur Personam
According to this maxim, which means /
”movable follow the person,” the situs of personal property is the domicile of the owner. This is merely a fiction of law and is not allowed to stand in the way of taxation of personalty in the place where it has its actual situs and the requisite legislative jurisdiction exists.
Criteria in Fixing Tax Situs of Subject of Taxation
For persons
Poll tax may be levied
upon persons who are residents of the State.
Criteria in Fixing Tax Situs of Subject of Taxation
For real property
is subject to taxation in
the State in which it is located whether the
owner is a resident or non-resident, and is
taxable only there.
Criteria in Fixing Tax Situs of Subject of Taxation
For c.Tangible Personal property
taxable in the state where it has actual situs – where it is physically located. Although the owner resides in another jurisdiction.
Intangible personal property
d.Intangible Personal Property – situs or personal property is the domicile of the owner, in accordance with the principle “MOBILIA SEQUUNTUR PERSONAM”, said principle, however, is not controlling when it is inconsistent with express provisions of statute or when justice demands that it should be, as where the property has in fact a situs elsewhere.
Situs of income
properly exacted from persons who are residents or citizens in the taxing jurisdiction and even those who are neither residents nor citizens provided the income is derived from sources within the taxing state.
Situs for f.Business, Occupation, and Transaction
power to levy an excise tax depends upon the place where the business is done, of the occupation is engaged in of the transaction not place.
When is theremultiplicity at situs?
There is multiplicity of situs when the same subject of taxation, like income or intangible, is subject to taxation in several taxing jurisdictions
What are the lines of double taxation?
Obnoxious or Direct Duplicate Taxation (Double taxation in its strict sense) - In the objectionable or prohibited sense means that the same property is taxed twice when it should be taxed only once. ‘
Requisites: 1.Same property is taxed twice 2.Same purpose 3.Same taxing authority 4.Within the same jurisdiction 5.During the same taxing period 6.Same kind or character of tax 2.Permissive or Indirect Duplicate
Taxation (Double taxation in its broad sense) – This is the opposite of direct double taxation and is not legally objectionable. The absence of one or more of the foregoing requisites of the obnoxious direct tax makes it indirect.
Basic Forms of Escape from Taxation ,
1.Shifting
2.Capitalization
3.Transformation
4.Evasion
5.Avoidance
6.Exemption
Tax Evasion
Tax Evasion – is the use of the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax.
Indicia of Fraud in Taxation
a.Failure to declare for taxation purposes true
and actual income derived from business for two
consecutive years, and
b.Substantial underdeclaration of income tax returns of the taxpayer for four consecutive years coupled with overstatement of deduction.
Tax Avoidance
Tax Avoidance – is the use by the taxpayer
of legally permissible alternative tax rates or
method of assessing taxable property or income
in order to avoid or reduce tax liability.
Distinction between Tax Evasion and
Avoidance
accomplished by breaking the letter of the law accomplished by legal procedures or means which maybe contrary to the intent of the sponsors of the tax law but . nevertheless do not violate the letter of the law
