What Does Tax Jurisdiction Mean?

A tax jurisdiction in the United States is geographical and refers to any place within the U.S. or land the U.S. owns that is legally allowed to charge taxes, notes USLegal. Some examples of tax jurisdictions include states, cities, townships and counties.

Determining a tax jurisdiction for a specific tax payer depends on the jurisdiction's own tax rules. For example, individuals may have to pay taxes where they live or where they own their property, while corporations may pay taxes where they have incorporated.

Some examples of tax jurisdictions include the requirement to pay both city sales tax in San Francisco and state sales tax in California, notes Oracle. Therefore, an individual can be in multiple tax jurisdictions and be liable for taxes in each.