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AARO Updates Documents and Implications of Residence-Based Taxation
TelAve News/10877646
The Association of Americans Resident Overseas (AARO) announces that, in support of residency-based taxation (RBT), it has updated its suite of documents educating overseas Americans on the Residence-Based Taxation for Americans Abroad Act (H.R. 10468), introduced in December 2024 by Rep. Darin LaHood (R. IL). The bill would permit overseas Americans to elect to become part of a new system in which the U.S. would no longer tax income earned outside the U.S.
WASHINGTON - TelAve -- Soon after the introduction of the bill, AARO prepared important information and a suite of documents to guide Americans overseas in this excellent development.
Though the bill expired with the 118th Congress, a new and similar version is anticipated in this Congress.
Since a person who elects RBT under the bill would be treated thereafter as a "non-resident alien" for tax purposes, AARO prepared a simple chart comparing taxation under the current citizenship-based taxation system with taxation of a person who elects RBT. AARO has updated the chart to reflect changes to the Tax Code made by the One Big Beautiful Bill Act (H.R. 1), signed into law on July 4, 2025.
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As part of this original suite of documents, AARO also summarized the bill and developed its own methodology to draft a paper "scoring" the cost of implementing the bill.
AARO's estimate, based on the key features of the bill including a Departure Tax, is that the bill would be revenue positive in its first year and thereafter would cost around $2.9 billion annually. The continuing cost of the election of RBT alone without the Departure Tax would be around $4.5 billion annually.
Says Doris L. Speer, President of AARO, "AARO has long supported replacing citizenship-based taxation with a residence-based taxation system, the global standard. We support the bill introduced by Rep. LaHood and look forward to its reintroduction in this Congress. AARO stands ready to advocate hard for its passage and to assist overseas Americans in navigating the RBT decision-making process when the bill is passed."
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About AARO: The Association of Americans Resident Overseas (AARO), founded in 1973 and headquartered in Paris, is a global, non-partisan, non-profit, volunteer association with members in over 40 countries that seeks fair treatment by the U.S. government for Americans abroad by advocating the issues that negatively affect their lives. AARO also informs its members of their rights and responsibilities as American citizens. For more information, please email us at contact@aaro.org or see https://aaro.org/.
Though the bill expired with the 118th Congress, a new and similar version is anticipated in this Congress.
Since a person who elects RBT under the bill would be treated thereafter as a "non-resident alien" for tax purposes, AARO prepared a simple chart comparing taxation under the current citizenship-based taxation system with taxation of a person who elects RBT. AARO has updated the chart to reflect changes to the Tax Code made by the One Big Beautiful Bill Act (H.R. 1), signed into law on July 4, 2025.
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As part of this original suite of documents, AARO also summarized the bill and developed its own methodology to draft a paper "scoring" the cost of implementing the bill.
AARO's estimate, based on the key features of the bill including a Departure Tax, is that the bill would be revenue positive in its first year and thereafter would cost around $2.9 billion annually. The continuing cost of the election of RBT alone without the Departure Tax would be around $4.5 billion annually.
Says Doris L. Speer, President of AARO, "AARO has long supported replacing citizenship-based taxation with a residence-based taxation system, the global standard. We support the bill introduced by Rep. LaHood and look forward to its reintroduction in this Congress. AARO stands ready to advocate hard for its passage and to assist overseas Americans in navigating the RBT decision-making process when the bill is passed."
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About AARO: The Association of Americans Resident Overseas (AARO), founded in 1973 and headquartered in Paris, is a global, non-partisan, non-profit, volunteer association with members in over 40 countries that seeks fair treatment by the U.S. government for Americans abroad by advocating the issues that negatively affect their lives. AARO also informs its members of their rights and responsibilities as American citizens. For more information, please email us at contact@aaro.org or see https://aaro.org/.
Source: Association of Americans Resident Overseas
Filed Under: Business
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