Income tax in the United States income taxes. This foreign tax credit is limited to that part of current year tax caused by foreign source income. Determining such part involves determining the source of income and allocating and apportioning deductions to that income. States tax resident individuals and corporations on their worldwide income, but few allow a credit for foreign taxes. In addition, Federal income tax may be imposed on non-resident non-citizens, including corporations, on U.S. source income. Federal tax applies to interest, dividends, royalties, and certain other income of nonresident aliens and foreign corporations at a flat rate of 30%. This rate is often reduced
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