Income tax return for taxation also vary, making comparisons all the more difficult. Countries that tax income generally use one of two systems: territorial or residential. In the territorial system, only local income – income from a source inside the country – is taxed. In the residential system, residents of the country are taxed on their worldwide (local and foreign) income, while nonresidents are taxed only on their local income. In addition, a very small number of countries, notably the United States, also tax their nonresident citizens on worldwide income. Countries with a residential system of taxation usually allow deductions or credits
Hall income tax and 1960, the court rejected proposals for a general personal income tax. However, in 1981, 1991, and 1999, three different Tennessee Attorneys General issued opinions that a general income tax would not violate the state constitution. In December 2004, a commission established to study the state's tax structure said the Hall income tax was regressive, anti-competitive, and "unfairly selective." However, the Institute on Taxation and Economic Policy (ITEP) said the Hall Tax is actually the only major progressive tax levied in Tennessee—amounting to 0.4 percent of income for high-income taxpayers compared to 0.0–0.1 percent for less affluent Tennesseans. The Tennessee