This chapter examines the problem of overlapping jurisdictions of governmental units in a federal system of government. It explains that fiscal overlapping can occur due to concurrent assignments, interdependence of fiscal revenue bases and expenditure functions, and competition among hierarchically ordered governmental layers and jurisdictions within each layer. Fiscal overlapping can occur both in tax and expenditure functions. This chapter also discusses major issues concerning vertical fiscal disharmony, inter-jurisdictional tax competition and allocative efficiency, and taxation of interstate trade.