Commonwealth of Northern Mariana Islands: Worked Example of Tax on Rent
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Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | US$1,500 | US$6,000 | US$12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less Costs2 | (1,130.00) | (4,370.00) | (8,690.00) | |
| Less Depreciation3 | (5,454.55) | (16,727.27) | (33,454.55) | |
| = Taxable Income | US$11,415.45 | US$50,902.73 | US$101,855.45 | |
| Gross Revenue Tax (Assessed)4 | 270.00 | 1,440.00 | 3,600.00 | |
| Income Tax Rates5 | ||||
| Up to US$15,650 | 10% | 1,141.55 | 1,565.00 | 1,565.00 |
| US$15,650 – US$63,700 | 15% | - | 5,287.91 | 7,207.50 |
| US$63,700 – US$128,500 | 25% | - | - | 9,538.86 |
| Annual Tax Due | US$1,141.55 | US$6,852.91 | US$18,311.36 | |
| Other Taxes Levied | ||||
| Gross Revenue Tax | (270.00) | (1,440.00) | (3,600.00) | |
| Rebate Base6 | US$871.55 | US$5,412.91 | US$14,711.36 | |
| Income Tax Rebate | (784.40) | (4,871.62) | (13,240.23) | |
| Net Income Tax Due | US$87.16 | US$541.29 | US$1,471.14 | |
| Annual Income Tax Due | US$357.16 | US$1,981.29 | US$5,071.14 | |
| Tax Due as % of Gross Income | 1.98% | 2.75% | 3.52% | |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on August 1, 2007.
Notes
1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).
2 Estimated values. Deductible costs are business license, management fees, repairs and maintenance.
3 Estimated values. Residential properties are depreciated over a period of 27.5 years.
4 Gross Revenue (Turnover) Tax will be assessed but it is credited against income tax. The tax depends on the annual turnover and is not a graduated tax:
| ANNUAL TURNOVERS, US$ | TAX RATE |
| Up to US$5,000 | nil |
| US$5,000 – US$50,000 | 1.5% |
| US$50,000 – US$100,000 | 2.0% |
| US$100,000 – US$250,000 | 2.5% |
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