Posted on 05/16/2019 1:08:03 PM PDT by Beave Meister
As an increasing number of residents are looking to leave high-tax Opens a New Window. states, such as California and New York, some of these state and local governments Opens a New Window. are not making the process easy.
The Tax Cuts and Jobs Act introduced a number of reforms, including a $10,000 cap on state and local tax deductions, which have caused Americans to look into establishing legal primary residences in states where they can limit their liabilities.
But some states give taxpayers a hard time when they are trying to change their domicile – thereby establishing their permanent residency elsewhere.
“California … they don’t particularly like when people that were large taxpayers … leave,” Marc Minker, lead managing director at accounting provider and consulting firm CBIZ MHM, told FOX Business. “The state becomes very aggressive with respect to making you prove that you essentially changed your domicile.”
Changing a domicile requires an individual to physically move with the intent to stay either permanently or indefinitely. The state of domicile determines your income, estate and other taxes.
Even when you change your domicile, that is not always enough, Minker added. If you own a property in the old state, you must be able to prove that you resided in the new domicile for more than 183 days out of the year.
In addition to California, Minker said New York is “equally aggressive,” as are New Jersey, Connecticut and Ohio, among others.
Lance Christensen, a partner at accounting firm Margolin Winer & Evens, agreed that New York State and New York City are aggressive when it comes to allowing taxpayers to leave. He said individuals must be ready to “withstand New York State and New York City challenges.”
(Excerpt) Read more at foxbusiness.com ...
Would have been shocked if that wasn’t in the first 5 posts.
I’ve been to 44 of the contiguous 48. I’ve been to Canada and Europe.
I was born in NYS and it’s my home. I love the state. But the ‘Rats and RINOs running it, from the state to local level have made it impossible to live here unless you are willing to submit to confiscatory taxation.
After hubby retires, we are getting the Hell out.
They do have a tax on the capital gains on your house or business when you sell and leave. So it is sort of a exit tax. They also get to raise the property tax on your house. So the buyer gets stuck with higher taxes. Means you get less for the house.
Hillary Flammond: “My uncle was born in America.”
Nick Rivers: “Really?”
Hillary Flammond: “But he was one of the lucky ones. He managed to escape in a balloon during the Jimmy Carter presidency.”
From “Top Secret!”
In my neck of the woods it’s not uncommon for an existing home costing 200 grand to come with 8 to 10 grand in prop taxes.
Leave before June.
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Not necessarily. I don’t think the time has to be consecutive days. You can come and go as long as your total time of residency in your new state (i.e., be present there) is at least 184 days.
I know in a few years I am establishing my permanent residency in Lake Tahoe
Wont be hard to prove Im there 183 days either...
“But I’ll be back as a tourist . . .”
I bet you won’t. I left my native California nearly 20 years ago, and I have only been back a very few times for family reasons, and had I no family there I doubt I would have ever gone back at all. There is absolutely nothing I miss about it, especially the FTB!
There are a whole lot of other beautiful states to explore, not to mention the rest of the world, and I think you will set your sights forward, not backward, when you leave.
“There’s little they can do if you sell your house, leave, and never return.”
“This mostly involves people who try to fake their residency.”
I worked for nearly 15 years as a CPA doing taxes in NYC and NJ. NYS and NYC were VERY aggressive, even 20+ years ago, in asserting that someone who had left was still a resident. You are dealing with wealthy people, and they will listen to their accountants and tax lawyers if it will save them substantial money. No legit CPA or tax attorney is going to tell them to fake it - they know that there could, or even likely will, be an examination, and will give the proper advice.
I remember working on several Estate Tax cases against NYS. The deceased in all of these cases had long since moved out of NY (mainly to Florida because it is 2 1/2 hours by plane and has very low taxes), but when they died they were buried in their family plot in NY. Boom...NY then asserts that someone who hadn’t lived in the state for 10 or 20 years had not intended to leave, because they were going to be (get this) residents forever. I $hit you not, that was actually their position. Well, even a liberal, state-worshipping, judge couldn’t buy that, so the state lost every time...but they made our clients spend many thousands of dollars to defend a completely bogus claim...and, simultaneously, do it with a family that was still grieving over the loss of a loved one. The f’ing scumbags.
This is, BTW, similar in nature to the dozens of bogus assessments that I was tasked to deal with from NYC. They would send a notice to a taxpayer, saying that they owed $89, or $147, or as much as $250. Which they did NOT owe - not in one single case. However, the people at the top of the NYC Dept of Revenue who decided to issue these notices (apparently several tens of thousands of them) knew that for a CPA or a lawyer to fight them would cost the taxpayers somewhere between $500 and $1,000, and thus anyone with any sense would just write the check. Well, most probably did (I’d call that outright fraud and/or extortion), but some fought it out of principle (and, at least for our clients, they won).
That’s what tax authorities do.
“I do wish they would go somewhere other than Florida. They bring their whole worldview with them with no idea at all of how that the effects of that worldview is what they are fleeing. “
That is how the totalitarian state does things.
I was in Idaho last year and spoke briefly with someone who was leaving Idaho for a couple of weeks to vacation in California.
I was incredulous, but didn’t say anything other than have a great trip.
Inside I was thinking why on earth would you leave this gorgeous state to visit California unless you have relatives, never been to the beach or kids begging to go to Disneyland?
Rural California might be great but I’m stuck here in the SF Bay Area.
No, we gave the country Reagan.
Then open borders Jorge Bush threw open the gates and turned it into mexifornia. Some of us are stuck here a few more years, behind enemy lines as it were.
Make sure it is, Lake Tahoe, on the Nevada side. California is worst.
Michael Corleone agreed.
It was a great movie
I left California for Washington state. California tracked me down a few years later, demanding that I file some tax form where I took a loss. I didn’t own them a damn thing. If I ever am so foolish as to go back there, they’ll probably arrest me.
For those who are interested, there are multiple iPhone & Android apps that help prove 'non-residency' by recording GPS localization on a daily (or better) basis. As well the app(s) frequently help in establishing the various legal proofs needed to show changed residency.
FYI though, there is a history of the states trying to continue taxation of pensions earned within and while a state resident. While this was killed decades ago by a US Supreme Court decision, I can see it coming back by a US Congress law.
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