Secretary of American Samoa

 

11.0406      Withholding exemption certificate required.

(a)   The provisions of the income tax relating to the collection of income tax at the source on wages shall apply to remuneration paid on or after the first day of the first month which begins more than 30 days after the date of enactment of this chapter.

 

(b)   Not later than 15 days before the date on which the collection of income tax at source on wages first becomes effective under sub¬section (a), each employee receiving wages shall furnish his employer with the withholding exemption certificate required by section 3402 (f) (2) of the United States Internal Revenue Code of 1954 as adopted and amended by American Samoa.

 

(c)   The provisions of chapter 3 of the Internal Revenue Code, relating to withholding of tax on nonresident aliens and foreign corporations, shall be effective after 31 December 1962.

History:   1963, PL 8-1.

 

11.0407       Income tax reserve account.

(a)   The Treasurer of American Samoa shall establish an “Income Tax Reserve Account” promptly upon the enactment of the Samoan Income Tax Act and shall deposit in such account 25% of all corporate income taxes, as and when collected, unless at the time of collection the reserve account has a net balance of not less than $ 1,000,000.

 

(b)   The reserve account shall constitute a trust fund out of which refunds and other adjustments shall be made in favor of any corporation subject to the Samoan Income Tax Act.

 

(c)   The money in the reserve account shall remain in a segregated status unless the Legislature of American Samoa authorizes its use for other purposes and provides for reimbursement of the account as and when needed.

 

(d)   The Reserve Account shall be reimbursed by continued collection and set aside of 25% of all income taxes designated in paragraph (a) above, which set aside shall continue until the net balance of the Reserve Account reaches the amount and level established in said paragraph (a).

History: 1965, PL 9-22; 1967, PL 10-20; amd 1987, PL 20-29 § 4; 2008, PL 30-27; amd 2015, PL 34-8 §1.

 Amendments: 1987 Subsection (a): substituted “Treasurer of American Samoa” for “Governor”.

 Reviser’s Comments: PL 13.53, 1974, which provided it was to take effect upon signing by the Governor (it was signed 11 September 1974) due to an emergency need to fulfill budgetary requirements for the fiscal year 1975, appropriated $1,007,995 from the Income Tax Reserve Account, to be used for capital improvements, government operations, special programs and grant match requirements. The act also provided for the disposition of sums not obligated, at the close of the year, for the purpose for which they were appropriated.

 

PL 16-37, effective 20 August 1979, appropriated $1,000,000 from the Income Tax Reserve Fund to be used for operating and capital improvement programs for fiscal year 1979, the prior years’ general fund deficit, and additional government operation expenses for fiscal year 1979. Additionally, $353,321 of the above appropriation was reserved to offset any deficiency in the general fund at the end of fiscal year 1979, subject to the unused portion thereof, if any, reverting to the Income Tax Reserve Account.

 

11.0408       High Court jurisdiction.

The High Court shall have exclusive original jurisdiction over all judicial proceedings in American Samoa, both criminal and civil, irrespective of the degree of the offense or the amount involved, with respect to the American Samoa Income Tax.

History:   1963, PL 8-1.

 Case Notes:

     High Court of American Samoa has exclusive and original jurisdiction over Territorial income tax proceedings, sitting as a District Court in refund cases and a Tax Court in deficiency proceedings.  A.S.C.A. §§ 11.0401, 11.0408.  Klauk v. American Samoa Government, 13 A.S.R.2d 52 (1989).

 

11.0409      Suits for recovery of taxes—Payment of judgments.

(a)   Suits for the recovery of any American Samoa Income Tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, are subject to the statutory requirements applicable to suits for the recovery of such amounts maintained against the United States in the United States District Courts with respect to the United States Income Tax.

 

(b)   When any judgment against American Samoa under this section has become final, the Governor or his delegate shall order the payment of such judgment out of any unencumbered funds in the Treasury of American Samoa, after first resorting to funds in the income tax reserve account if the plaintiff or petitioner is a corporation.

History:   1963, PL 8-1.

 Case Notes:

     The High Court, while sitting as a Tax Court for deficiency proceedings, does not have jurisdiction to hear such a deficiency proceeding unless it was filed within the statutory deadline; while sitting as a District Court for refund cases, it lacks jurisdiction until there has been payment or collection of disputed taxes.  26 U.S.C. § 7422; A.S.C.A. § 11.0409.  Stephens v. American Samoa Government, 15 A.S.R.2d 87 (1990).

 

11.0410       Execution against Governor and government personnel

(a)   Execution may not issue against the Governor or any officer or employee of American Samoa on a final judgment in any proceeding against him for any acts or for the recovery of money exacted by or paid to him and subsequently paid into the Treasury of American Samoa in performing his official duties with respect to the American Samoa Income Tax if the court certifies that probable cause existed, or such officer or employee acted under the directions of the Governor or his delegate.

 

(b)   When such execution has been issued, the Governor or his delegate shall order the payment of such judgment out of any unencumbered funds in the Treasury of American Samoa.

History: 1963, PL 8-1.

 

11.0411      Collection actions.

A civil action for the collection of the American Samoa income tax, together with any fines, penalties and forfeiture, or for the recovery of any erroneous refund of such tax, may be brought in the name of and by American Samoa in the High Court.

History:   1963, PL 8-1.

 Case Notes:

     In prosecution for fraudulent intent to evade tax, 3 years statute of limitations applies instead of 6 years where defendant did not “omit” income information but included it in attachment to or in other section of tax return. Ah San v. Lutali, 4 A.S.R.2d 177(1987) (mem).

 

     Burden of proof on government to prove fraudulent intent to evade tax is by “clear and convincing evidence”. 26 U.S.C. 37454.

 

11.0412      Tax liens.

American Samoa shall have a lien with respect to the American Samoa Income Tax in the same manner and with the same effect, and subject to the same conditions, as the United States has a lien with respect to the United States Income Tax. Such lien shall be enforceable in the name of and by American Samoa. Where filing of a notice of lien is required, such notice shall be filed in the office of the Clerk of the High Court.

History:   1963, PL 8-1.

 

11.0413           Criminal offenses.

Any act or failure to act with respect to the American Samoa Income Tax which constitutes a criminal offense under chapter 75 of subtitle F of the United States Internal Revenue Code of 1954, as adopted by this chapter, is an offense against American Samoa and may be prosecuted in the name of American Samoa by the appropriate officer thereof.

History:   1963, PL 8-1.

 

11.0414       Notification and assessment of Samoan income tax in the case of adjustments to United States income tax of corporation.

(a)   In the case of a taxpayer that is a corporation that has engaged in a trade or business in American Samoa during a taxable year, such taxpayer (or its successor) shall report to the Treasurer of American Samoa any change or correction by the gross income, deduction, credit, or allowance as reported for such taxable year (or for a taxable year of a person described in paragraph (2) that includes such taxable year) on the United States income tax return of:

(1)   the taxpayer, or

(2)   any person who is related (within the meaning of section 482 of the United States Internal Revenue Code) to the taxpayer, that is attributable or otherwise related to the carrying on by the taxpayer of such trade or business in American Samoa or to the purchase, sale, lease, or other transfer of goods, services, or property or other transactions between related persons and the taxpayer in carrying on its trade or business in American Samoa.  For purposes of this section, the category of items of gross income, deduction, credit, or allowance of the taxpayer or a related person that are treated as otherwise related to the carrying on by the taxpayer of its trade or business in American Samoa or to do transactions between related persons and the taxpayer in carrying on its trade or business in American Samoa shall include an item that arises out of one or more transactions involving substantially comparable goods, services, or other property undertaken between related persons and the taxpayer in carrying on a trade or business outside of American Samoa.  The taxpayer shall make such report to the Treasurer of American Samoa within ninety days after the final determination of such change or correction.  The taxpayer shall concede the accuracy of such determination or state wherein it is erroneous.  In the event that the taxpayer or any related person files an amended United States income tax return for any taxable year with respect to any item of gross income, deduction, credit, or allowance that is attributable or otherwise related to the carrying on by the taxpayer of a trade or business in American Samoa or to the purchase, sale, lease, or other transfer of goods, services, or property or other transactions between related persons and the taxpayer in carrying on its trade or business in American Samoa, the taxpayer (or its successor) shall file within ninety days thereafter a copy of such amended United States income tax return with the Treasurer of American Samoa and shall provide such additional information as the Treasurer of American Samoa may require.  The Treasurer of American Samoa is not required to accept as correct for Samoan income tax purposes any such change or correction by the Commissioner of Internal Revenue or amended United States income tax return and may conduct an independent audit or investigation with respect thereto.  The Treasurer of American Samoa shall determine whether the assessment of additional Samoan income tax is appropriate under the provisions of the Samoan Income Tax Act in respect of the taxable year or years to which the report required under this subsection or the amended United States income tax return relates.

 

(b)   Upon the making by the taxpayer of the report required under subsection (a), or the filing of the copy of the amended return as described in subsection (a), or the filing of the copy of the amended return as described in subsection (a), the Treasurer of American Samoa shall have, notwithstanding any provision of the Samoan Income Tax Act to the contrary, a period of two years following the date upon which the taxpayer makes the report required under subsection (a), or files such copy of the amended return, within which to assess upon the taxpayer such additional Samoan income tax, if any, as is appropriate under the provisions of the Samoan Income Tax Act in respect of the taxable year or years to which such report or amended return relates.  The provisions of this subsection shall not affect the time within which or the amount for which an assessment otherwise may be made by the Treasurer of American Samoa.

 

(c)   In the event that a taxpayer fails to report a change or correction by the commissioner of Internal Revenue, or fails to file the copy of the amended return, as and when required by subsection (a) hereof the assessment of additional Samoan income tax by the Treasurer of American Samoa may be made at any time, notwithstanding any provision of the Samoan Income Tax Act to the contrary.

 

(d)   For purposes of this section:

(1)   The term "report" shall include, but not be limited to, the taxpayer's name, address, and identifying number, the taxable year or years that are affected by the change or correction described in subsection (a), a listing of the names, addresses, and identifying numbers of any related persons involved in the change or correction, a description and listing of the dollar amounts of such change or correction, a copy of the final determination of such change or correction, and such other information as the Treasurer of American Samoa may prescribe.

(2)   The term "final determination" shall include:

(A) the issuance of a 90-day notice of deficiency pursuant to section 6211 and 6212 (or a jeopardy assessment pursuant to section 6861) of the United States Internal Revenue Code, unless a timely petition to redetermine the deficiency is filed in the United States Tax Court in which case the judgement of a court of last resort affirming or redetermining such deficiency is deemed to constitute the final determination;

(B)  the assessment of a deficiency pursuant to a waiver filed under section 6212 of the United States Internal Revenue Code in the case where no 90-day notice of deficiency is issued;

(C) a closing agreement made under section 7121 of the United States Internal Revenue Code or similar agreement in compromise executed by the Commissioner of Internal Revenue and the taxpayer or related person; and

(D) an allowance by the Commissioner of Internal Revenue, or by a court of competent jurisdiction in a final judgement, on the United States income tax return of the taxpayer or related person or of any deficiency thereafter assessed.

 

(e)(1) This section 11.0414 shall apply to taxable years ending after 1980 as to which a final determination (within the meaning of this section) by the Commissioner of Internal Revenue or the filing of an amended United States income tax return with the Commissioner of Internal Revenue is made after December 31, 1989.

(2)  The amendments made by this act shall be effective as if included in section 11.0414, as originally enacted, of the American Samoa Code Annotated and shall apply to taxable years ending after 1980 as to which a final determination (within the meaning of section 11.0414(a) of the American Samoa Code Annotated) by the Commissioner of Internal Revenue or the filing of an amended United States income tax return with the Commissioner of Internal Revenue is made after December 31, 1989; provided that in the case of a final determination or the filing of an amended United States income tax return that has been made during the period prior to the date of enactment of this act, the ninety-day period described in section 11.0414(a) of the American Samoa Code Annotated within which the taxpayer is to make its report to the Treasurer of American Samoa shall be treated as commencing on the date of enactment of this act and the two-year period described in section 11.0414(b) of such Code within which the Treasurer of American Samoa may assess additional Samoan income tax upon the making of such report by the taxpayer shall be treated as commencing on the date on which the taxpayer files such report during the period following the date of enactment of this act.

History:  1990, PL 21-37; amd 1991, 22-10.

 

[End Of Title 11 – Chapter 4]

Title 11 – Chapter 05 – AMENDMENTS

Sections:

11.0501      Amendments to Internal Revenue Code, as adopted.

11.0502      Section 5 redesignated as Section 6.

11.0503      Section 5 added.

11.0504      Effective date of Section 38.

11.0505      Last sentence of Section 48 (d), and all of Section 48 (g) deleted.

11.0506      Section 63 (a) amended.

11.0507      Repealed.

11.0508      Section 876 deleted.

11.0509      Section 881 (a) (1) amended.

11.0510      Paragraph (e) added to Section 881.

11.0511      Paragraph (f) added to Section 881.

11.0512      Section 931 deleted.

11.0513      Section 932 deleted.

11.0514      Paragraphs (1) and (2) of Section 933 amended.

11.0515      Section 1441 (c) amended.

11.0516      Section 1441 (b) amended.

11.0517      Paragraph (d) added to Section 1442.

11.0518      Paragraph (e) added to Section 1442.

11.0519      Section 3401 amended.

11.0520      Section 3402 (a) amended.

11.0521      Section 3402 (c) (1) amended.

11.0522      Subsection (c), (f) (6), and (j) of Section 3402 deleted.

11.0523      Section 3402 (f) (1) amended.

11.0524      Section 3402 (f) (2) amended.

11.0525      Adds (7) to Section 3402 (f).

11.0526      Section 3404 amended.

11.0527      Adds (33) to Section 7701 (a).

11.0528      Chapter 2 deleted.

11.0529      Chapter 4 deleted.

11.0530      Sections 43 and 3507 deleted.

11.0531      Renumbers Section 221 to 222 and adds new Section 221.

11.0532      Section 457 (d) (1) amended.

11.0533      Partial recoupment of corporate taxes.

11.0534      Maximum tax imposed upon corporations.

11.0535      Section 876 amended.

11.0536      Section 1442(c) deleted.

11.0537      Section 881(b) deleted.

​

11.0501      Amendments to Internal Revenue Code, as adopted.

The United States Internal Revenue Code of 1954, as adopted by American Samoa, is amended as set forth in this chapter.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0502      Section 5 redesignated as Section 6.

Section 5, relating to cross-reference with respect to tax on individuals, is redesignated as Section 6.

History:   1963, PL 8-1; 1965; PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0503      Section 5 added.

Section 5 is added to read:

“SEC. 5. ALTERNATE MINIMUM TAX. In the case of a taxpayer other than a corporation, if an amount equal to 4% for tax year 2001 and 4% for tax years thereafter of the adjusted gross income exceeds the regular tax for the taxable year then there is imposed a tax equal to such excess. For the purpose of this section the term “regular tax” means the tax imposed by sections 1 and 3 for the taxable year reduced by the credits allowable under subpart A of Part IV of this subchapter other than that allowed by section 31. This alternate minimum tax does not apply to a handicapped taxpayer who earns $1,000 or less, or to the first $5,000 earned by a taxpayer age 65 or over during the taxable year. The term handicapped taxpayer means an individual with a mental disability resulting in subaverage intellectual functioning or impaired social competence, or with a physical disability, infirmity, malformation, or disfigurement which is caused by bodily injury, birth defect, or illness, including epilepsy. It shall include without limitation any degree of paralysis; amputation; lack of physical coordination; blindness or visual impediment; deafness or hearing impediment; muteness or speech impediment; or physical reliance on a guide dog for the blind, a wheelchair, or any other remedial appliance or device.

 

.History:   1977, PL 15-52 § 3;amd 1980, PL 16-87 § 2; PL 18-25 § amd 1985, PL 19-33 § 1;amd 2001, PL 27-13.

Amendments:          1980 changed section 6 to section 5 and amended section generally.

1984 Added to Section 5 to exempt certain handicapped taxpayers from tax.

1985 Added “or to the first $5,000 earned by a taxpayer age 65 or over”.

2001 Changed 2% alternate minimum tax to 4% for tax year 2001 and tax years thereafter.

 

11.0504      Effective date of Section 38.

Section 38, relating to investment credit, shall be effective on all property placed into service on or after 1 January 1978.

​

History:   1977, PL 15-52 § 2; amd 1980, PL 16-87 § 2.

Amendments:1980 Deleted last sentence.

 

11.0505      Last sentence of Section 48 (d), and all of Section 48 (g) deleted.

The last sentence of Section 48 (d), relating to certain leased property, and all of Section 48(g), relating to adjustment to basis of property, are deleted.

History:   1963, PL 8-1; 1965, PL 9-21; PL 9-66, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0506      Section 63(a) amended.

Section 63(a), relating to the definition of taxable income, is amended by deleting “Except as provided in subsection (b),” and by inserting in lieu thereof “Except as provided in subsections (b) and (c)”.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0507      Section 482 amended and Section 483 added.

Repealed by PL 16-87 § 4.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0508      Section 876 deleted.

Section 876, relating to alien residents of Puerto Rico, is deleted.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0509      Section 881(a) (1) amended.

Section 881 (a)(1) relating to the imposition of tax on income of foreign corporations not connected with American Samoa business is amended by inserting after the word “dividends” the following: “(other than dividends paid by a corporation organized under the laws of one of the states or territories of the United States to a corporation organized under the laws of one of the states or territories of the United States)”.

History:   1978, PL 15-87 § 1; amd 2009, PL 31-8.

​

11.0510      Paragraph (e) added to Section 881.

Section 881 relating to the tax on income of foreign corporations not connected with American Samoa business is amended by adding after paragraph (d), the following new paragraph:

“(e) Motion picture rentals. In the case of revenues derived by foreign corporations from the rental of motion pictures to businesses in American Samoa, the tax imposed under paragraph (a) of this section shall be 15% of the amount of the revenues received.”

History:   1979, PL 16-23 § 1.

 

11.0511      Paragraph (f) added to Section 881.

Section 881 relating to the tax on income of foreign corporations not connected with American Samoa business is amended by adding after paragraph (e), the following new paragraph:

“(f) Reinsurance Premiums—In the case or premiums derived by foreign corporations from reinsurances in respect of insurance business transacted in American Samoa, the tax imposed under paragraph (a) of this section shall be 10% of the amount of the premiums received.”

History:   1979, PL 16-38 § 1.

 

11.0512       Section 931 deleted.

Section 931, relating to income from sources within possessions of the United States, is deleted.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0513       Section 932 deleted.

Section 932, relating to citizens of possessions of the United States, is deleted.

History: 1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0514       Paragraphs (1) and (2) of Section 933 amended.

Paragraphs (1) and (2) of Section 933, relating to income from sources within Puerto Rico, are amended by deleting: “(except a-mounts received for services performed as an employee of the United States or any agency thereof).”

History:  1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

 

11.0515       Section 1441(c) amended.

Section 1441 (c), relating to exceptions from withholding of tax on nonresident aliens, is amended by adding the following new paragraph:

“Payments by the United States. No deduction or withholding under subsection (a) shall be required in case of amounts paid to a nonresident alien, individual who is employed by the United States or any agency thereof, other than American Samoa or any agency thereof.”

History: 1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL  11-134.

 

11.0516      Section 1441(b) amended.

Section 1441(b) relating to withholding of income tax is amended by inserting after the word “dividends” the following: “(other than dividends paid by a corporation organized under the laws of one of the states or territories of the United States to a corporation organized under the laws of one of the states or territories of the United States)”.

History: 1978, PL, 15-87 § 2; amd 2009, PL. 31-8.

 

11.0517      Paragraph (d) added to Section 1442.

Section 1442 relating to the withholding of tax on foreign corporations is amended by adding after paragraph (c) the following paragraph:

“(d) Motion picture rentals. In the case of revenues derived by foreign corporations from the rental of motion pictures to businesses in American Samoa, there shall be deducted and withheld at the source a tax equal to 15% thereof.

History: 1979, PL 16-23 § 1.

 

11.0518      Paragraph (e) added to Section 1442.

Section 1442 relating to the withholding of tax on foreign corporations is amended by adding after paragraph (d) the following new paragraph:

“(e) Reinsurance Premiums—In the case of premiums derived by foreign corporations from reinsurances in respect of insurance business transacted in American Samoa there shall be deducted and withheld at source a tax equal to 10% thereof.”

History:  1979, PL 16-38 § 1.

 

11.0519       Section 3401 amended.

Section 3401, relating to definitions for the collection of income tax at source on wages, is amended to read as follows:

“SEC. 3401 —DEFINITIONS.

(a)   Wages. For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) paid in cash for services performed by an employee for his employer; except that such term shall not include remuneration paid:

(1)   For active service as a member of the Armed Forces of the United States; or

(2)   For agricultural labor (as defined in section 3121 (g)); or

(3)   For service not in the course of the employer’s trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for such service is $10 or more and such service is performed by an individual who is regularly employed by such employer to perform such service. For purposes of this paragraph, an individual shall be deemed to be regularly employed by an employer during a calendar quarter only if:

(A)  On each of some 24 days during such quarter such individual performs for such employer for some portion of the day service not in the course of the employer’s trade or business; or

 (B) Such individual was regularly employed (as determined under subparagraph (A), by such employer in the performance, of such services during the preceding calendar quarter; or

(4)   For services for a government (other than American Samoa) or any agency thereof or an international organization; or

(5)   For services for American Samoa or any agency thereof performed by a citizen or resident of the United States; or

(6)   For services performed by a nonresident alien individual; or

(7)(A) For services for an employer (other than American Samoa or any agency thereof) performed by a citizen of American Samoa, if, at the time of the payment of such remuneration it is reasonable to believe that such remuneration will be excluded from gross income under section 911; or

(B)  For services performed in a foreign country or in a possession of the United States (other than American Samoa) by a citizen of American Samoa if, at the time of payment of such remuneration, the employer is required by the law of such foreign country or possession of the United States to withhold income tax upon such remuneration; or

(C)  For services for an employer performed by a citizen or resident of American Samoa within Puerto Rico, if it is reasonable to believe that during the entire calendar year the employee will be a bona fide resident of Puerto Rico; or

(8)   For services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; or

(9)   To, or on behalf of, an employee or his beneficiary:

(A)  From or to a trust described in section 401(e) which is exempt from tax under section 501(a) at the time of such payment unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust; or

(B)  Under or to an annuity plan which, at the time of such payment, meets the requirements of section 401(a)(3), (4), (5), and (6); or

(10) For services performed as a volunteer or volunteer leader within the meaning of the Peace Corps Act of the United States.

(b)   Payroll period.  For purposes of this chapter, the term “payroll period” means a period for which a payment of wages is ordinarily made to the employee by his employer, and the term “miscellaneous payroll period” means a payroll period other than a daily, weekly, biweekly, semimonthly, quarterly, semiannual, or annual payroll period.

(c)   Employee. For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of American Samoa or any agency thereof. The term “employee” also includes an officer of a corporation.

(d)   Employer. For purposes of this chapter, the term “employer” means the person for whom an individual performs or performed any services, of whatever nature, as the employee of such person, except that:

(1)   If the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term “employer” (except for purposes of subsection (a)) means the person having control of the payment of such wages;

(2)   In the case of a person paying wages on behalf of a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in trade or business within American Samoa, the term “employer” (except for purpose of subsection (a)) means such person.

(e)   Number of withholding exemptions claimed. For purposes of this chapter, the term “number of withholding exemptions claimed” means the number of withholding exemptions in a withholding exemption certificate in effect under section 3402(f). If no such certificate is in effect, the number of withholding exemptions claimed shall be considered to be zero, and the employer shall deduct and withhold upon any wages a tax equal to 1 8 percent of such wages.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

 

11.0520      Section 3402(a) amended.

Section 3402(a), relating to requirements of withholding with respect to income tax collected at the source, is amended to read as follows:

“(a) Requirement of withholding:

(1)   Except as provided in paragraph (2), every employer making payment of wages shall deduct and withhold upon such wages a tax equal to 18 percent of the amount by which the wages exceed the number of withholding exemptions claimed, multiplied by the amount of one such exemption as shown in subsection (b)(l);

(2) If, based upon the information contained in an employee’s exemption certificate, it appears that such employee will be subject to the tax imposed by section 5 of chapter 1, every employer making payment of wages to such individual shall deduct and withhold upon such wages a tax equal to 2 percent of such wages.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134; amd 1980, PL l6-87 § 2.​

Amendments: 1980 Changed withholding tax from 2 1/2 percent to 2 percent in paragraph (2).

​

11.0521      Section 3402(c)(1) amended.

Section 3402(c)(1), relating to wage bracket withholding with respect to collection of income tax at source on wages, is amended to read as follows:

“(c) Wage bracket withholding:

(1)(A) In lieu of the tax required to be deducted and withheld under subsection (a)(l), the employer may elect to deduct and withhold upon the wages paid to an employee a tax determined in accordance with the tables provided in this subsection;

(B)  In lieu of the tax required to be deducted and withheld under subsection (a)(a), the employer may elect to deduct and withhold upon the wages paid to an employee a tax determined as one-ninth of the tax determined in accordance with the tables provided in this subsection as if the number of withholding exemptions claimed is zero.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; 1970, PL 11-134.

11.0522      Subsection (c), (f)(6), and (j) of Section 3402 deleted.

Subsection (c), relating to included and excluded wages, subsection (f)(6) relating to exemption of certain nonresident aliens, and subsection (j), relating to noncash remuneration to retail commission salesmen, of Section 3402, are deleted.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0523      Section 3402(f)(1) amended.

Section 3402(f)(1), relating to withholding exemptions, is amended by deleting “An employee receiving wages shall on any day be entitled to the following withholding exemptions:” and by inserting in lieu thereof “An employee receiving wages, with respect to which a tax is required to be deducted and withheld under subsection (a)(1), shall on any day be entitled to the following withholding exemptions”.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0524      Section 3402(f)(2) amended.

Section 3402(0(2) is amended to read as follows:

“(2) Exemption certificates:

(A)  On commencement of employment. On or before the date of the commencement of employment with an employer, the employee shall furnish the employer with a signed withholding exemption certificate relating to the number of withholding exemptions which he claims, which shall in no event exceed the number to which he is entitled, and stating whether it is reasonable to believe that he will be subject to the tax imposed by section 5 of chapter 1;

(B) Change of status: If, on any day during the calendar year, the number of withholding exemptions to which the employee is entitled is less than the number of withholding exemptions claimed by the employee on the withholding exemption certificate then in effect with respect to him or it is no longer reasonable to believe, notwithstanding the statement on such certificate, that he will be subject to the tax imposed by section 5 of chapter 1, the employee shall within 10 days thereafter furnish the employer with a new withholding exemption certificate relating to the number of withholding exemptions which the employee then claims, which shall in no event exceed the number to which he is entitled on such day, and stating that it is reasonable to believe that he will not be subject to the tax imposed by section 5 of chapter 1. If, on any day during the calendar year, the number of withholding exemptions to which the employee is entitled is greater than the number of withholding exemptions claimed or it is reasonable to believe, notwithstanding a prior statement to the contrary, that he will be subject to the tax imposed by section 5 of chapter 1, the employee may furnish the employer with a new withholding exemption certificate relating to the number of withholding exemptions which the employee then claims, which shall in no event exceed the number to which he is entitled on such day, and stating that it is reasonable to believe that he will be subject to the tax imposed by section 5 of chapter 1;

(C)  Change of status which affects next calendar year: If, on any day during the calendar year, the number of withholding exemptions to which the employee will be, or may reasonably be expected to be, entitled at the beginning of his next taxable year under subtitle A is different from the number to which the employee is entitled on such day or it appears that the expectation may change as to the imposition of tax under section 5 of chapter 1, the employee shall, in such cases and at such times as the Governor or his delegate may by regulations prescribe, furnish the employer with a withholding exemption certificate relating to the number of withholding exemptions which he claims with respect to such next taxable year, which shall in no event exceed the number to which he will be, or may reasonably be expected to be, so entitled, and stating whether it will be reasonable to believe that he will be subject to the tax imposed by section 5 of chapter 1.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0525      Adds (7) to Section 3402(f).

Section 3402(f) is amended by adding the following new paragraph:

“(7) Zero withholding exemptions: An employee receiving wages, with respect to which a tax is required to be deducted and withheld under subsection (a)(2), shall not be entitled to any withholding exemptions.”

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0526      Section 3404 amended.

Section 3404, relating to return and payment by governmental employer, is amended to read as follows:

“SEC. 3404—RETURN AND PAYMENT BY GOVERNMENTAL EMPLOYER: If the employer is American Samoa, the return of the amount deducted and withheld upon any wages may be made by an officer or employee of American Samoa having control of the payment of such wages, or appropriately designated for that purpose.”

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0527      Adds (33) to Section 7701(a).

Section 7701(a), relating to definitions, is amended by adding the following new para-graph:

“(33) Citizen of American Samoa. The term citizen of American Samoa shall be considered not to include a citizen of American Samoa who is also a citizen of the United States.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0528      Chapter 2 deleted.

Chapter 2, relating to tax on self-employment income, is deleted.

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0529      Chapter 4 deleted.

Chapter 4, relating to rules applicable to recovery of excessive profits on government contracts, is deleted.

 

History:   1963, PL 8-1; 1965, PL 9-21; 1966, PL 9-52; 1969, PL 11-45; amd 1970, PL 11-134.

11.0530      Sections 43 and 3507 deleted.

     (a)    Section 43, relating to the earned income credit, and Section 3507, relating to advance payment of the earned income credit by employers, are deleted for all tax years beginning after 31 December 1979. There shall be no earned income credit or advance earned income credit except as provided in this section.

    (b)    The Earned Income Tax Credit in Title 26 USC § 32 and the Earned Income Tax Credit rules, regulations, notices, and other applicable guidance, including Sections 9621, 9622, 9623, 9624, 9626 of the American Rescue Plan Act of 2021, in force in the United States of America, where not clearly inapplicable or incompatible with the intent of this section and as provided herein below, are adopted by American Samoa.

    (c)    Allowance of refundable credit.

         (1)   In general.  In the case of an eligible individual, there shall be allowed as a refundable credit against the tax imposed by this subtitle for the taxable year an amount equal to the credit percentage of so much of the taxpayer’s earned income for the taxable year as does not exceed the earned income amount.

       (2)  Limitation.  The amount of the credit allowable to a taxpayer under paragraph (1) for any taxable year shall not exceed the excess (if any) of:

       (A)  the credit percentage of the earned income amount, over

       (B)  the phaseout percentage of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds the phaseout amount.

    (d)  Percentages and amounts.  For purposes of subsection (c):

(1)  Percentages.  The credit percentage and the phaseout percentage shall be determined as follows:

In the case of an eligible individual with:

The credit percentage is:

The phaseout percentage is

1

Qualifying child

21.42

21.42

2

Qualifying children

25.20

25.20

3

Qualifying children

28.35

28.35

4

No qualifying children

9.64

9.64

 

(2)  Amounts.

(A) In general. Subject to subparagraph (B), the earned income amount and the phaseout amount shall be determined as follows:

In the case of an eligible individual with:

The earned income amount is:

The phaseout amount is

1

qualifying child

$10,641

$21,280

2

or more qualifying children

$14,949

$29,896

3

No qualifying children

$9814

$19,926

(B)  Joint returns.  In the case of a joint return filed by an eligible individual and such individual’s spouse, the phaseout amount determined under subparagraph (A) shall be increased by $5,000.

(e)  Definitions and special rules.  For purposes of this section:

(1)  Eligible individual:

(A)  In general.  The term “eligible individual” means:

(i)    any individual who has a qualifying child for the taxable year, or

(ii)  any other individual who does not have a qualifying child for the taxable year, if:

(I)    such individual’s principal place of abode is American Samoa for more than one-half of such taxable year,

(II) such individual (or, if the individual is married, either the individual or the individual’s spouse) has attained age 25, before the close of the taxable year, and

(III) such individual is not a dependent for whom a deduction is allowable under section 151 to another taxpayer for any taxable year beginning in the same calendar year as such taxable year.

(2)  Qualifying child ineligible:

       If an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year.

(f)  Increase for inflation.

The gross earned income limit and maximum credit amounts provided in Section (1) of Subsection (d) of this section shall be subject to the increase provided for inflation as adjusted by the U.S. Internal Revenue Service. The Secretary of the Treasury shall issue an information bulletin notifying the earned income and maximum credit limits, after the U.S. Internal Revenue Service announces the inflation adjustments.

(g)  If the federal funding provisions of 26 USC § 7530 (ARPA Section 9625) is discontinued in any year thereafter, then subsections (b), (c), (d), (e) and (f) will no longer be in effect for such years.

History: 1980, PL 16-78 § 1; amd 1980, PL 16-87 § 2; 2022, PL 37-11 § 1.

 

Amendments: 1980 Added provision relating to Section 3507.

11.0531      Renumbers Section 221 to 222 and adds new Section 221.

Section 221, relating to cross-references with respect to additional itemized deductions for individuals is redesignated as Section 222. New Section 221 is added to read:

“SEC. 221. STUDENT TUITION DEDUCTION

A taxpayer may deduct from his adjusted gross income, if he elects to itemize his deductions, all cost for tuition paid in the current taxable year for the education of a dependent who is attending either public or private elementary school, a high school, a college, university, or graduate school anywhere in the United States.

History:   1980, PL 16-87 § 2; and 1988, PL 20-51.

11.0532      Section 457(d) (1) amended.

Section 457 (d) (1) providing definitions is amended to read:

“(1) State. The term “state” means a State, a Territory or the United States, a political subdivision of a State or Territory, and an agency or instrumentality of a State, Territory or political subdivision of a State or Territory”.

11.0533       Corporate taxes.

(a)   Section 11(b), relating to the amount of tax imposed on corporations for taxable years beginning on and after July 1, 1987, is amended to read:

11(b)    Amount of tax.

The amount of tax imposed by subsection (a) shall be the sum of;

(1)   15 percent of so much of the taxable income as does not exceed $50,000,

(2)   25 percent of so much of the taxable income as exceeds $50,000 but does not exceed $75,000, and

(3)   34 percent of so much of the taxable income as exceeds $75,000.

In the case of a corporation which has taxable income in excess of $100,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (a) 5 percent of such excess or (b) $11,750.

History:  1988, PL 20-51; amd 1989, PL 21-8; amd 2016, PL 34-15 § 2; amd 2017, PL 35-5.

11.0534      Alternative minimum business tax.

Section 11(b) is further amended to read:

(4)  Alternative Minimum Business Tax. In the case of a corporation or other business entity subject to taxation in American Samoa, there is imposed an alternative minimum business tax equal to 1% of the taxpayer’s gross revenues for the tax year, commencing with tax year 2018 and thereafter.  Taxpayer shall pay the alternate minimum business tax if an amount equal to 1% of the gross revenue exceeds the regular tax for the taxable year.  For the purpose of this section the term “regular tax” means the tax imposed on the taxpayer by the Samoan Income Tax Act for the taxable year reduced by the credits allowable thereunder.  Businesses commenced during a given taxable year will be exempt from the alternative minimum business tax for the initial taxable year and the following taxable year only.  Businesses that undergo reorganization as defined in the United States Internal Revenue Code Section 368 will be subject to the alternative minimum business tax regardless of the year of inception.  This alternative minimum tax does not apply to a nonprofit corporation.  The term “nonprofit corporation” means any group that is organized and operated for charitable, religious, or educational purposes, or hold tax-exempt status as a 501(c)(3) organization under the Federal Internal Revenue Code.

(5)   Twenty-five (25) percent of accumulated proceeds from this tax shall be transferred to the LBJ operations, and twenty-five (25) percent of accumulated proceeds shall be transferred to a separate special account of the American Samoa Medical Center to support the Off-island Medical Referral Program.

History: 2017, PL 35-5.

11.0535       Maximum tax imposed upon corporations.

Notwithstanding the provisions of sections 11.0533 and 11.0534 the maximum amount of income tax imposed in a taxable year upon any corporation operating under a certificate of exemption issued pursuant to the tax incentives for businesses act, section 11.1601 et seq., shall not exceed the amount of income tax which would have been imposed upon such corporation in such year under the provisions of this title, as in effect on December 31, 1986 (without regards to the Tax Reform Act of 1986, U.S. Public Law No. 99-514) and as applied in accordance with the terms of the certificate of exemption issued to such corporation.

History:  1988, PL 20-51; amd 2017, PL 35-5 § 3.

11.0536       Section 876 amended.

Section 876 relating to alien residents of Guam, Puerto Rico, the Northern Marianas Islands and the United States is amended to read:

(a)   Alien individuals.  This subpart shall not apply to any alien individual who is a bona fide resident of Puerto Rico, Guam, the Northern Mariana Islands, or the United States during the entire taxable year and such alien shall be subject to the tax imposed by section 1.

(b)   Foreign corporations.  Sections 881, 884 and 1442 shall not apply to corporations formed in the United States, any of the 50 states or any territory of the United States.

History:  2009, PL 31-8; 2017, PL 35-5 §4.

11.0537       Section 1442(c) deleted.

Section 1442(c) relating to corporations formed in Guam and other territories is deleted.

History:  2009, PL 31-8; 2017, PL 35-5 §5.

11.0538    Section 881(b) deleted.

Section 881(b) relating to corporations formed in Guam and other territories is deleted.

History:  2009, PL 31-8; 2017, PL 35-5 §6.

[End Of Title 11 – Chapter 5]