Are You A Resident of the State?

Resident Taxation

Most states tax their residents on ALL income, regardless of whether it is attributable to in state activities or property.

To be taxed as a resident of most states , an individual must either be domiciled in the state or be a statutory resident (i.e., maintain a permanent place of abode and spend more than 183 days in the state during the tax year).

A number of cities use identic al rules for determining who is a city resident for income tax purpose.

Nonresident Taxation

Generally, nonresidents of a particular state pay tax only on income that is derived from or connected with in-State sources, including wages, salaries, deferred compensation and pensions from employment in the State , rents and capital gains attributable to real estate or tangible personal property in the State , as well as income from a business trade, profession or occupation carried on in the State , including partnership or “S” corporation items.

States will generally NOT tax a nonresident’s income from intangible
personal property such as income from stocks, interest, dividends, etc.

 Domicile  is “the place which an individual intends to be such individual’s permanent home – the place to which an individual intends to return whenever such individual may be absent.”

“Leave and Land” “Domicile…is established by physical presence
coupled with an intent to establish a permanent home

Domicile Factors

The Primary Factors

  • Maintenance of a Home
  • Active Business Involvement in the State
  • Time Spent in the State
  • Location of “Near and Dear” Items
  • Location of Family

The “Other” Factors

  •  The address at which bank statements, bills, financial data and
  • correspondence concerning other family business is primarily received
  • The physical location of the safe deposit boxes used for family records and valuables
  • Location of auto, boat, and airplane registrations and drivers’ licenses.
  • Voter registration and voting patterns.
  • Possession of special parking tax exemptions.
  • Nature and level of telephone activity.
  • Citations in will and other legal documents

Statutory Residency 

Generally, a statutory resident is an individual who is not domiciled in a state (i.e. New York), but maintains a permanent place of abode in New York and spends, in the aggregate, more than 183 days of the taxable year in New York. The only exception from this rule is for individuals in the active service of the United States Armed Forces.

Permanent Place of Abode is a dwelling place permanently maintained by the taxpayer, whether or not owned by him, and will generally include a dwelling place owned or leased by his or her spouse.” An individual maintains a permanent place of abode by doing whatever is necessary to continue one’s living arrangements in a particular dwelling place including contributing to the household, in money or otherwise. Additionally, the regulations provide that a dwelling must be maintained for “substantially all of the taxable year” in order to be considered a permanent place of abode for statutory residence purposes.

An abode must be used for residential purposes, not as an abode for others.

183 Day Rule

Proof -The taxpayer has the burden of proving that he or she was present
in the state for less than 184 days.