Antarctica may be a great place to avoid the heat and the crowds. For U.S. citizens living there, one thing can’t be avoided: taxes.
The U.S. Tax Court ruled that the approximately 1,100 workers at the Amundsen-Scott South Pole Station, McMurdo Station or other areas on the southern continent don’t qualify for a long-standing exemption for Americans living abroad.
At issue in the tax cases is whether Antarctica qualifies as a foreign country for purposes of a 50-year-old law that allows Americans living abroad to exclude part of their income from U.S. tax. Most of the cases date to 2001 and 2002, when the exclusion amount was capped at $80,000; the amount is now indexed for inflation and was $82,400 in 2006.
“As Antarctica is not a foreign country for purposes of the code, we conclude that petitioner is not entitled to exclude the wage income he earned in Antarctica,” Judge Juan F. Vasquez wrote in one of 15 cases with identical rulings released in the past month.
As far back as the 1960s, U.S. tax courts have held that Americans working in Antarctica must pay taxes as if they were in the continental United States, Vasquez said in his ruling. Tax regulations classify work in Antarctica as “space- or ocean-related” activity.
