Skip to comments.Minnesota's wealthy caught in a tight tax net over residency
Posted on 04/19/2014 9:19:32 AM PDT by TurboZamboni
Its getting tougher for Minnesotans to avoid the states taxes by spending part of the year somewhere else.
Snowbirds and high earners are discovering that they must do more than buy a condo in the Sun Belt and register a vehicle there, after a court decision last year reinforced the states ability to use any of more than two dozen criteria to determine who is a Minnesota resident.
People refer to it as Hotel Minnesota, said Matt Shea, a lawyer at Gray Plant Mooty. You can come any time you like, but you can never leave.
To determine tax residency, the state is looking at such things as where people vote, whether they mostly use Minnesota bank accounts and whether they go to the doctor here or in another state. Accountants and lawyers are advising clients who want to avoid Minnesota tax to sell local property and businesses if possible, and definitely to spend less time here than wherever they plan to claim as their new home state.
(Excerpt) Read more at startribune.com ...
Guess they’ll just stay in Florida then.
They spent their employment years in the union voting rat, but first chance they get, move to Florida.
“the state is looking at such things as where people vote, “
Probably both places.
Are you a Minnesotan? The answer may surprise you.
No one has ever said how many Minnesota folks play this dual-state status. From my three years in Tucson....I had the feeling that I bumped into a Minnesotaite almost daily after 1 October, and rarely saw any of them after March. It’d be curious to know how many of them leave for the winter.
that is all that matters, isn't it?
Maybe he’s the guy with signs in his yard and the pickup truck with the Don’t tread on me (Gadsden) flag on it.
I've set foot in Minnesota once.I spent three nights there (in a hotel).I don't anticipate ever setting foot in the state again.I'd be surprised,to say the least,if Minnesota ever tries to claim me as a "resident".But then,you never know with leftists.When I make my move to New Hampshire and Florida I anticipate at least some trouble from Gay State tax officials.My Dad,who had a healthy income and net worth thanks to hard work and frugal living (he was a child of the Depression),had enormous trouble from the Gay State when he made his move to Florida.But he prevailed...after spending thousands on a lawyer.
As with most rules, they come about because a few folks abuse the freedom they have. When someone follows ‘the letter of the law’ they are playing the government’s game. If you are an ethical person you don’t need to try and shade things and skate on the edge to save a few bucks.
If you have enough money that you can afford to play these games over taxes then I don’t have a lot of sympathy for your ‘plight’.
Me, I am just one of those poor middle class dupes that works hard, votes, and actually lives where I say I do
Read the story....
Where you vote is only part of it...this shell game that some play to minimize their taxes, while legal, ends up hurting everyone. And now the draconian rules are made to punish a few who will never feel the effects of it
“Guess theyll just stay in Florida then.”
I think for the most part they live close to family and have maintained a vacation home elsewhere. I understand you have to be out of California for 18 months before you can avoid state income tax. Even then, if you’re still a member of a church or have a bank account there, you’re taxed. Eventually, all of the harshest rules will be universally applied.
I interviewed with a CEO who runs a company in Florida, but whose wife lives in New Jersey close their kids. He fly’s home on the weekends. He said the audit was hell and they made the argument that even though he owns a house in Florida he really lives in New Jersey and commutes to Florida. I don’t know how it came out.
It won't generate the money they expect because enough of the the targeted wealthy will likely flee to a low tax state, or make certain they don't meet the residency criteria.
So that projected $1.1 billion may actually end up being lowered by a half to two-thirds. Then the state will complain that revenue is down and they have to raise whatever taxes/fees the legislature thinks they can get a pass on from the voters.
Another great example of American tax policy; raising tax rates that REDUCE tax receipts...which result in MORE tax rate increases. Insanity!
Just one more reason I hate this state and can’t wait to get out.
9.85% state income tax rate has to be one of the highest of the 57 states, no?
just like owning multiple property in my own state, i couldn't vote in another town that i owned property in because i don't live there even though i pay village/town/county/school property taxes there
The problem with residency for retirees is often complicated. The rules vary from state to state, and are sometimes contradictory about where to get a driver's license, where to vote, what taxes are owed where, how medical plans cover expenses and care in a second state.
I try to keep things simple. If I were to spend extended time somewhere else, I'd rent, and keep my footprint in that other area as minimal as possible. I'm upper-poor, so OH tax isn't that bad a burden as a retiree.
It's not about rich and poor - it's about states and the Federal Government through tax laws and legislative obscenities like NAFTA attempting to claim ownership of your productive output, and thus, your person.
If they aren't stopped cold - right now - they'll get down to your level, eventually.