Personal income tax

[Offgrid Organic Farmer]

My pension is not taxed here in Maine. My other income streams are not large enough to be taxed. As a result I pay no income taxes.

This state has the oldest average age, and the highest percentage of retirees, for a reason.

 

[Crabby Mike]

TX doesn’t go by number of days present each year. If you have a TX domicile- even if rented occasionally, you can declare TX residency. You should have your vehicles registered in TX, a TX driver license, TX voter registration, and TX insurance on everything.

That's only one side of the coin, though. Sure, Texas (and probably most states) makes it easy to declare yourself a resident, but that doesn't mean the state you were formerly a resident of will be happy to let you go. (I guess the exception would be no-income-tax states, because why would they care?)

 

[pb4uski]

I live in MN and know MANY people, including two on the Forbes 500 list who live in SD and fly to work in MN every day. They sleep over 185 days in SD each day and are legal SD residents. Sioux Falls airport has more than a few private jets coming and going every day for this reason. There is a nice airport in the Miller/Highmore area because the highest paid executive in the US worked in MN and had a ranch there that he called home. Saving 8% state income tax on $500 million a year paid for his private jet. MN has a very high income tax rate and treats capital gains as ordinary income. They also have a very high inheritance tax. I am a lifelong resident of MN and am seriously considering moving for these very reasons. But if I change residencies, I am really going to move, not just pretend.

From the brief description you give those people are absolutely subject to MN income tax. While MN does not give any reward for reporting tax fraud it's still the right thing to do.

Typically, if you work in one state but are resident in another then the portion of your income earned in that state is taxable by that state as non-resident income. Where I worked, our time sheets included a location code so my earnings were properly reported to those non-resident states and I filed a non-resident tax return for each (one year 6 or so non-resident tax returns IIRC). There are also some states that you need to have worked a certain number of hours in before you are subject to non-resident state income taxes.

The firm calculated my earnings for each state based on my time sheet location code entries and the relevant laws. Then as I recall I received a credit on my home state tax return for taxes paid to the other states so I was taxed twice.

 

[ocean view]

This thread has rekindled my curiosity about a piece of this issue: how do states track/determine how many days a year you live somewhere? As of now, we split our time between homes in two states, but have no desire to change our official residence. But if we ever did, how would a state audit our claim about where we spent the most time? And what if we didn't live more than half the year in any one state?

For the most part, the state doesn’t really know where you spend your days, especially if you don’t have W-2 income. That said, if you were subjected to an audit, you would need to provide proof of the days spent within and outside of the state. Credit & debit card activity would probably come into play, maybe airline tickets. Some full time RVers keep a log/diary entry of their nightly location for just this purpose.

The effort by the state to collect is directly proportional to the amount of tax they believe you owe.

 

[marko]

I'm not sure this is true, since it came to me second-hand, but there was report of a state using credit card records to prove that someone was in their state for over half the year.

Our former governor proposed putting tracking chips inside of the car inspection stickers so that they could see if you went over the line to New Hampshire to buy cheap booze.

 

[sengsational]

TX doesn’t go by number of days present each year. If you have a TX domicile- even if rented occasionally, you can declare TX residency. You should have your vehicles registered in TX, a TX driver license, TX voter registration, and TX insurance on everything.

From what I understand, and this is from SGOTI, so you can take it to the bank...


It doesn't matter how many nights you spend in the state you want to be a resident in...it's the number of nights you DO spend in the state you DON'T want to be a resident in!

 

[JPatrick]

You forgot to mention the annual requirement for a minimum of 6 fire ant stings.

That's sad...When we lived there it was only three and you could just send a picture via email.

 

[Stormy Kromer]

I don't think Mark Dayton's family chose to put their family trust in Pierre, SD by accident. We're all kidding ourselves if we think we know how that level of money works when it comes to tax laws. As for the OP, unless you actually move to SD don't plan on being a resident there for tax purposes, that's out of our league.

 

[ncbill]

OP could move into a RV and domicile it in SD...

 

[Koolau]

We were surprised that our old home state didn't try to "claim" us - just to make us fight it. We even DO still have to pay a small amount of tax in the old state due to owning part of a small business that still exists there. Some states are much more aggressive on not letting their residents "go."

I would suggest going strictly by the laws (typically number of days spent plus official residence and state drivers license.) The penalties for cheating could be draconian - even including doing time, though I've never heard of that actually happening. As always, YMMV.

Strictly out of curiosity - what is your affinity for Minnesota based on? I could talk for hours about HI, but other than fishing or maybe hunting, I'm not aware of Minnesota being more than just "home" when it comes to wanting to live there. No offense intended, I assure you. I know folks who hate HI - mostly females who were "stuck" there when their spouse was in the military. Again, strictly curious - I claim ignorance about Minnesota, not any prejudice as such.

 

[CaliKid]

There is a very prominent person in MN who has a family trust in South Dakota, he may be able to tell us how it's done. He lived 8 years in the Governer's Mansion, before that he was one of our Senators. He paid MN state income tax on his governor's salary, I'm not sure about the family trust income in South Dakota. His family set that up years ago.

This is commonly done by people using South Dakota, Nevada, etc... trusts to avoid state income taxes in the state they actually live in. It's totally legal if set up right. Depending on who the trustees are a small percentage of the trust assets might get taxed in the home state but it's a very small percentage. Some people do this to avoid state capital gains tax when they sell a very successful business also. Again, this is totally legal when set up right. The key is hiring competent tax/legal help.