Situs of taxation

Situs of taxation literally means the place of taxation. The basic rule is that the state where the subject to be taxed has a situs may rightfully levy and collect the tax; and the situs is necessarily in the state which has jurisdiction or which exercises dominion over the subject in question. Within the territorial jurisdiction, the taxing authority may determine the situs and such determination is typically done through a law.

Factors to consider in determining the situs of taxation are:

[1] Nature of the tax;

[2] Subject matter of the tax (person, property, act or activity);

[3] Possible protection and benefit that may accrue both to the government and the taxpayer;

[4] Citizenship of the taxpayer;

[5] Residence of the taxpayer; and

[6] Source of income.

Situs of taxation literally means place of taxation. The general rule is that the taxing power cannot go beyond the territorial limits of the taxing authority. Basically, the state where the subject to be taxed has a situs may rightfully levy and collect the tax. (Situs of taxation - BusinessWorld. Jul 19, 2011. www.bworldonline.com)