Territoriality of taxation
A state may not tax property lying outside its borders or lay an excise or privilege tax upon the exercise or enjoyment of a right or privilege derived from the laws of another state and therein exercise and enjoyed. (51 Am.Jur. 87-88). The reasons for this are:
[1] Tax laws do not operate beyond a country’s territorial limits; and
[2] Property which is wholly and exclusively within the jurisdiction of another state receives none of the protection for which a tax is supposed to be a compensation.
[1] Tax laws do not operate beyond a country’s territorial limits; and
[2] Property which is wholly and exclusively within the jurisdiction of another state receives none of the protection for which a tax is supposed to be a compensation.
Territoriality principle is the term used to connote the principle of levying tax only within the territorial jurisdiction of a sovereign tax authority or country, which is adopted by some countries. definitions.uslegal.com.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnwd3_jzNLn0KjCu539DZQfbvgZB5Dqrrc2A0i8-QyJBXdxsWPu7v_tfE4H8DkxIMlTnzKmj9K_cqTber3hlctvBSnso5c9Cdir0wRVWMb6JONErEq_3aUVrmM1PE6Hc2-5vr1XeahQQ/s200/project+jurisprude+2.jpg)