Posted on 07/05/2002 10:28:50 AM PDT by Excuse_My_Bellicosity
Utah officials say the state was deprived of a fourth U.S. House seat because of the practices of the U.S. Census Bureau. But Utah might also want to point a finger at itself.
A retired Army colonel argues that Utah maintains "hostile" tax polices toward military personnel stationed in the state. This prompts hundreds, if not thousands, to establish their state residency elsewhere.
The result: It cost Utah that new congressional district.
Gary Stephens, who also ran unsuccessfully for the 2nd District Republican nomination, testified before a joint subcommittee last fall. He says that Utah's practice of taxing its military personnel when working out of state -- even when serving overseas and in combat -- has proven wildly unpopular and costly.
"The four branches of the military recruit roughly 2,000 people a year in Utah," says Stephens. "That's roughly 20,000 people over the decade, plus another 1,500 officers that the ROTC programs produce. And when these guys go on active duty and hear from their buddies, 'You're still paying taxes to Utah?' they switch residency."
Add it up, Stephens continues, and the number of Utah military personnel who have fled the state's tax roles easily could surpass the 857 residents it came up short in the race for the final congressional seat.
"You have to ask yourself, was this policy worth it? Military absentee ballots pushed George W. Bush over the top in Florida and they gave North Carolina that [House] seat ahead of us. Utah might have won that seat with a friendlier policy," he says.
Sen. Curtis Bramble, R-Provo, agrees.
"In fact, probably many more than that changed [residency] because of our tax policy," Bramble says. "I don't think we should be taxing National Guard members and reservists who go to Afghanistan. I don't think we should be taxing people who are taking a pay cut to put their lives on the line."
Bramble and Rep. Matt Throckmorton, R-Springville, both sponsored bills during the last legislative session to address different elements of the problem. Both failed because it would have cost the state a projected $504,000 in revenue. But Bramble says he is willing to take the cause up again next year.
"It's about doing the right thing," he says. "Treating our military personnel right, whether full time or reservists, is important. It sends a message that we support them."
Utah residents who go into military service do not lose their Utah residency solely by being absent from Utah due to military orders.
Utah residents are liable for filing Utah income tax returns on all income regardless of whether it is generated in Utah or not. If an income tax is required to be paid to another state on nonmilitary income earned there, Utah will allow a credit for the tax paid to the other state. Nonresidents who are stationed in Utah solely due to military orders are not subject to income tax on their military pay in Utah.
However, if nonresident military personnel living in Utah earn income from Utah sources — other than active military service pay — they are required to file a return and pay any Utah tax due.
NOTE: A Utah resident in military service, stationed outside the United States, will be granted a waiver of penalty for late filing if the return is filed on or before the 15th day of the fourth month after the taxpayer’s return to the United States or his discharge date, whichever is earlier. Interest would still be owing on any unpaid amounts from the original due date of the return until the tax is paid.
source: http://incometax.utah.gov/taxguide/military.html
no surprise here...
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