How do domestic and international tax systems interact?

Tax laws both domestically and internationally exist to help governments collect money from individuals, businesses, and other entities. In the United States, each state has their own individual taxation laws that must be followed. In terms of international taxes, the U.S. does not have a national tax system that applies to all taxpayers. Instead, the U.S. depends on a treaty network to assess taxes between countries; for example, if an individual is living in the U.S. but has investments or assets outside the country, the U.S. would need to collect taxes from that individual based on a treaty with that other country. Another way in which domestic and international taxes interact is through tax deferral. Tax deferral allows taxpayers to postpone their payment of taxes on foreign-earned income, until that income is brought into the U.S. This allows taxpayers to avoid double taxation on the same income. Tax deferral also helps to reduce the amount of taxes an individual must pay if they are not a resident of the U.S. In Alaska, international tax laws must be followed by all residents, both domestic and international. All U.S. residents living in Alaska must file their federal, state, and local taxes, and those who are non-U.S. residents but own assets in Alaska must abide by international tax laws that apply. All taxes collected help the state of Alaska to fund public projects, provide essential services, and to create jobs.

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How do domestic and international tax systems interact?

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