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Fleeing California Taxes? Get In Line (Leaving is not that easy)
Forbes ^ | 01/16/2013 | Robert W. Wood

Posted on 01/21/2013 7:24:08 PM PST by SeekAndFind

Is it any wonder that many small and medium sized businesses are moving out of California? In the recent elections, California Voters Sock It To The Rich. As the Wall Street Journal noted, some are promising businesses a better life elsewhere. Being courted must be refreshing but it is important for a company and its owners to have reasonable expectations and to budget for drilling down into California’s rules.

After all, leaving is not always easy. A California resident is anyone in the state for other than a temporary or transitory purpose. See FTB Publication 1031. Plus, it includes anyone domiciled in California who is outside the state for a temporary or transitory purpose. The burden is on you to show you’re not a Californian. If you’re in California for more than 9 months, you are presumed a resident.

Yet if your job requires you to be outside the state, it usually takes 18 months to be presumed no longer a resident. Your domicile is your true, fixed permanent home, the place where you intend to return even when you’re gone. You can have only one domicile, but many facts are relevant. Start with where you are employed and where you own a home.

If you own several, compare size and value. Consider your homeowner’s property tax exemption, where your spouse and children reside, etc. Your days inside and outside the state are important, as is the purpose of your travels. Where do you have bank accounts and belong to social, religious, professional and other organizations?

Voter registration, vehicle registration and driver’s licenses count. Where you own or operate businesses counts, as does the relative income and time you devote to them. You can own investments far and wide, but you can expect them to be compared.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events; US: California
KEYWORDS: california; escape; exodus; expat; taxes
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1 posted on 01/21/2013 7:24:11 PM PST by SeekAndFind
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To: SeekAndFind

2 posted on 01/21/2013 7:25:53 PM PST by SeekAndFind
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To: SeekAndFind

Limbaugh chronicled how difficult it was for him to leave NY. It took years to get out of their hooks.


3 posted on 01/21/2013 7:26:31 PM PST by DManA
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To: SeekAndFind

4 posted on 01/21/2013 7:26:44 PM PST by SeekAndFind
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To: DManA


5 posted on 01/21/2013 7:28:33 PM PST by SeekAndFind
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To: SeekAndFind
"Welcome to the Hotel California...You can check-out any time you like,But you can never leave! "
6 posted on 01/21/2013 7:29:03 PM PST by Kartographer ("We mutually pledge to each other our lives, our fortunes and our sacred honor.")
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To: Kartographer

You think checking out of California is hard?

Try checking out of the US of A...

Gerard Depardieu had it easier leaving France.


7 posted on 01/21/2013 7:30:40 PM PST by SeekAndFind
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To: DManA

Here’s one Californian who is going to learn his lesson the HARD WAY:

SEE HERE:

http://www.redstate.com/2013/01/21/phil-mickelson-tax/

Phil Mickelson hints tax changes may spur career change.

Excerpt:

On the day President Obama was sworn in for his second term, [top professional golfer Phil] Mickelson sent shock waves through the Humana Challenge when he said the political landscape in the United States was causing him to seriously contemplate his future in golf.

[snip]

“If you add up all the federal and you look at the disability and the unemployment and the Social Security and state, my tax rate is 62, 63 percent,” Mickelson said. “So I’ve got to make some decisions on what to do.”

[snip]

In December, Mickelson, who was part of a group that had bought the San Diego Padres four months earlier, abruptly announced that he was no longer involved in the business deal. His reversal came shortly after California voters approved Proposition 30, which imposed a 13.3 percent tax rate on incomes of more than $1 million.

Asked Sunday if the election results played a role in his decision to sever his ties with the Padres’ ownership group, Mickelson replied, “Yeah, absolutely.”


8 posted on 01/21/2013 7:33:16 PM PST by SeekAndFind
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To: SeekAndFind

This is why progressives despise federalism. What good is having complete power in one state if people can just move to some other state.


9 posted on 01/21/2013 7:35:55 PM PST by DManA
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To: DManA

RE: What good is having complete power in one state if people can just move to some other state.

Speaking of Federalism — Does California impose an EXIT TAX to those who plan to leave (i.e., no longer want to reside in) the state?


10 posted on 01/21/2013 7:39:20 PM PST by SeekAndFind
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To: SeekAndFind

“Too Liberal: 1%

Heck, it’s the liberalism that drives all the other indicators!


11 posted on 01/21/2013 7:47:06 PM PST by rockrr (Everything is different now...)
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To: SeekAndFind
With home pricing rising here in the “technology” heart of California my wife and I have a plan to exit Northern California in the next 12 months and head to Central Texas for opportunity,lower taxes, and less government intrusion!
12 posted on 01/21/2013 7:49:07 PM PST by RWAubrey ("Men sleep peacefully in their beds at night because rough men stand ready to do violence on their b)
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To: SeekAndFind

I’m wondering about Panama - #2 on International Living’s Best Countries to Retire.

So what are the problems with getting out of here?


13 posted on 01/21/2013 7:49:40 PM PST by Aria ( 2008 & 2012 weren't elections - they were coup d'etats.)
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To: SeekAndFind

Interesting stats...thanks for posting!


14 posted on 01/21/2013 7:52:01 PM PST by Aria ( 2008 & 2012 weren't elections - they were coup d'etats.)
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To: SeekAndFind

Shouldn’t “Too Liberal” be “All of the Above”? LOL


15 posted on 01/21/2013 7:53:35 PM PST by OSHA (One despises and wants to destroy the United States, the other is a dead terrorist.)
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To: Aria

RE: So what are the problems with getting out of here?

Some questions:

1) Are you planning on relinquishing US citizenship? It isn’t that simple. You have the IRS to deal with.

2) Are you planning to make money in Panama? ( say, rent out a property )? You will of course have to report that income to the IRS.

American is one of a handful of countries that TAXES citizens on income from ALL POSSIBLE SOURCES.

If you are a German living and working in the US, you are not required to file the income you make in the US to the German tax office. If on the other hand, you are an American living and working in Germany, YOU ARE REQUIRED to report your income in Germany for taxation purposes.

In fact, I know of green card holders who became citizens later who left their country of origin and by some good fortune, inherited property or money from a dead relative from that country. THEY ARE REQUIRED TO INFORM THE IRS OF THAT.


16 posted on 01/21/2013 7:55:33 PM PST by SeekAndFind
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To: Aria

I’m heading to the Philippines like some Freepers. Former American territory, kids were taught English the same time as tagalog and the newspapers are mostly in English. I also have dibs on a condo in the financial district and only paid 25K for the 27th floor (yeah, that cheap). The traffic though, is one of the worst.


17 posted on 01/21/2013 8:05:47 PM PST by max americana (Make the world a better place by punching a liberal in the face)
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To: SeekAndFind

“Mr. Obama, tear down this wall.”


18 posted on 01/21/2013 8:08:12 PM PST by dfwgator
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To: dfwgator

That’s talking to a brick wall :)


19 posted on 01/21/2013 8:09:02 PM PST by SeekAndFind
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To: dfwgator
“Mr. Obama, tear down this wall.”

Are they still putting forth the idea of splitting CA into two states? I think the Northern population was pushing for it a while ago, but of course, the southern half needs the revenues to support the illegal population.

20 posted on 01/21/2013 8:12:37 PM PST by RobertClark ("May God have mercy upon my enemies, because I won't" - George S. Patton)
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To: SeekAndFind

That survey should have included an "all of the above" for a lot of us ex-Californios. Every one of those (except 'try something new') was on my list of reasons for relocating out of the state.

21 posted on 01/21/2013 8:14:24 PM PST by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: SeekAndFind

Back in the early 90’s I was considering moving to Eureka, Ca. to be closer to my then girlfriend who had moved back home. I must say that staying in Texas and not marrying that girl was a very beneficial decision all around. PTL.


22 posted on 01/21/2013 8:14:34 PM PST by tflabo (Truth or Tyranny)
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To: SeekAndFind

Seems as though California citizenship is becoming about as desirable as Soviet citizenship used to be.


23 posted on 01/21/2013 8:15:28 PM PST by Taft in '52
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To: SeekAndFind

Like Russia, California will build an iron curtain...only with exit taxes.


24 posted on 01/21/2013 8:15:48 PM PST by Huskrrrr
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To: max americana

I’ve been to Panama and really liked it - very Americanized. Think the health care is one big advantage.

Wow, 25k for a condo!


25 posted on 01/21/2013 8:22:05 PM PST by Aria ( 2008 & 2012 weren't elections - they were coup d'etats.)
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To: SeekAndFind

Do you have to relinquish US citizenship to get away from the IRS?

Planning on living on the income from investments - but worried that if the US collapses how much will that income dwindle to? So also thinking about the need to get the principle out of the US.

My brother in law is Dutch and inherited $ from his dad - which apparently will be a problem if he brings it here. I recall my very liberal sister whining about the tax laws here....go figure.


26 posted on 01/21/2013 8:26:54 PM PST by Aria ( 2008 & 2012 weren't elections - they were coup d'etats.)
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To: Aria

I would do an awful lot of research before settling on Panama. I spent three years there in the 1980s, and there are always some issues around the advantages of the area.


27 posted on 01/21/2013 8:37:56 PM PST by pepsionice
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To: SeekAndFind

The IRS and German Finanzamt share everything - there’s no escape.


28 posted on 01/21/2013 8:48:19 PM PST by GreyHoundSailor
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To: SeekAndFind

My son has lived in London for over twenty years and has paid both US and British income tax. It’s so complicated, an accountant does the taxes for both places.


29 posted on 01/21/2013 8:49:05 PM PST by Marcella (Prepping can save your life today. Going Galt is freedom.)
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To: pepsionice

There is a freeper I’ve talked to a few times who lives in the hills outside Panama City I think.

What were the issues?


30 posted on 01/21/2013 8:59:54 PM PST by Aria ( 2008 & 2012 weren't elections - they were coup d'etats.)
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To: SeekAndFind

[[Fleeing California Taxes?]]

you;ll be tazxed if you do


31 posted on 01/21/2013 9:02:36 PM PST by CottShop (Scientific belief does not constitute scientific evidence, nor does it convey scientific knowledge)
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To: RWAubrey

Come on down. Any place near Dallas, Austin and San Antonio is really nice.


32 posted on 01/21/2013 9:02:41 PM PST by Orange1998 (DO NOT PRESS CTRL W)
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To: SeekAndFind
Speaking of Federalism — Does California impose an EXIT TAX to those who plan to leave (i.e., no longer want to reside in) the state?

I believe that this would be unconstitutional, but given a leftist SCOTUS, I suppose it might be possible, especially once they implement an Internet sales tax...

Mark

33 posted on 01/21/2013 9:04:05 PM PST by MarkL (Do I really look like a guy with a plan?)
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To: SeekAndFind

“Try checking out of the US of A...”

Make multiple trips out of the US (to Canada) with cash, gold less than 10k/ person. I wonder if you can send money from Canada out to your destination w/o too much scrunity.

I heard that Ecuador was pretty good. If lots of expats go to one place, that helps.


34 posted on 01/21/2013 9:04:18 PM PST by grumpygresh (Democrats delenda est.)
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To: SeekAndFind

[[Try checking out of the US of A...]]

My plan was to becoem a mexian citizen, then sneak back across the boarder as an illegal alien so that I can get all the benifits that law abiding citizens are denied, and so I won’t ever have to buy a liscence to drive, have a pistol permit, or even file taxes- and so I can receive SS and medicare and have my college education paid for


35 posted on 01/21/2013 9:05:05 PM PST by CottShop (Scientific belief does not constitute scientific evidence, nor does it convey scientific knowledge)
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To: SeekAndFind
But Apple, Cisco, Cat and other corporations can keep money earned overseas out of the states and avoid all taxes. How can this be possible.
36 posted on 01/21/2013 9:06:26 PM PST by Orange1998 (DO NOT PRESS CTRL W)
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To: RWAubrey

I think I have finally convinced my husband to move. Our son started college at Texas A&M in the fall, and we have 16 year old twins. In state tuition in Texas is so much cheaper.

Plus, the housing costs and of course all the taxes.

I think we may rent our Cali home first, and rent out there.

I’m from Texas, but hubby is a Cali native and really doesn’t want to leave.

He lost his job last year after being diagnosed with prostate cancer. He’s got another job at a start up, but it doesn’t pay near as much. He doesn’t want to go back to a corporate job, and he can still work for the start up in Texas.

I really hope it all happens!


37 posted on 01/21/2013 9:12:22 PM PST by luckystarmom
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To: SeekAndFind
Speaking of Federalism — Does California impose an EXIT TAX to those who plan to leave (i.e., no longer want to reside in) the state?

I think that would be unconstitutional.

Besides the 1st amendment right to peaceably assemble, Article I Section 10 Clause 2 states:


"No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States..."
My reading of this suggests that if you consider people themselves as exports, they can't be taxed beyond the cost of processing the move, and then any taxes that they do take goes to the federal government, not the state.

At least one can make the argument.

-PJ

38 posted on 01/21/2013 9:26:54 PM PST by Political Junkie Too (If you are the Posterity of We the People, then you are a Natural Born Citizen.)
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To: rockrr

Yeah, and I note that only 1% claim to leave because it’s too liberal, which is worrying as they are likely to bring their dammed liberalism with them to a red state and destroy it just as they destroyed California, and still haven’t got a clue. They’ve done just that to Virginia, North Carolina, Colorado, etc.


39 posted on 01/21/2013 9:27:25 PM PST by mrsmel (One Who Can See)
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To: Windflier

Note there seems to be no connection in the minds of the poll between to liberal and cost of living


40 posted on 01/21/2013 9:36:32 PM PST by Manta (Obama to issue executive order repealing laws of physics)
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To: SeekAndFind
This entire exit tax and time frames of living in Cali when wanting to leave is BS.

Transfer your money/investments/assets to another State or Country (Cayman Islands) BEFORE you leave. I've read about many who did so and still get Cali Franchise Board dunning letters about taxes owed and they just ignore them. It may take a couple of letters to Franchise Board, but after a while they just give up.

If your money and assets are out of California, there is nothing they can do. Unless the Fedgov steps in, which they can't and won't, take your money and run and ignore California. Of course it gets complicated if you maintain a business or sale in Cali. But for the most part, yes, you can liquidate and take your assets elsewhere.

Yes, the Fedgov attempts to tax your income/profits while living out country as a USA citizen, but again, think off-shore accounts. I've been looking into once I leave this socialist state of Cali. Costa Rico, Cayman Islands, Bermuda, and a couple others don't inforce it. Surprisingly, Switzerland now has an agreement with the US about moneys transferred.

41 posted on 01/21/2013 11:38:28 PM PST by A Navy Vet (An Oath is Forever.)
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To: A Navy Vet

The Franchise Board may place a lien on your out of state property that includes escalating penalties and interest. I speak from experience. Do not ignore their letters; hire a mean dog CA tax attorney to fight them. If you are clean, the state will likely fold immediately if threatened with a counter-suit.


42 posted on 01/22/2013 2:46:57 AM PST by Jacquerie ("How few were left who had seen the republic!" - Tacitus, The Annals)
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To: luckystarmom

The best cancer center in the whole wide world... is in Houston, Texas.


43 posted on 01/22/2013 2:55:25 AM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: SeekAndFind

And the fact that “too liberal” is only at 1% is the reason the rest of us despise most Cali emigrants. They come to another state and proceed to foul the nest there, not realizing the top 8 reasons are all the RESULT of “ too liberal”......


44 posted on 01/22/2013 3:23:16 AM PST by Kozak (The Republic is dead. I do not owe what we have any loyalty, wealth or sympathy.)
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To: Aria
Know anything about the Boquete area in the mountains near the Costa Rican border? It is an expat enclave, but looks pretty expensive for lodging.
45 posted on 01/22/2013 3:31:26 AM PST by Truth29
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To: MarkL

We’re one conservative Justice away from dictatorship.


46 posted on 01/22/2013 3:51:30 AM PST by 1010RD (First, Do No Harm)
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To: SeekAndFind

California government is a tax vampire. I never lived there, never worked there, and still had to write a lengthy letter to get them to leave me alone. My crime? I’m a Georgia resident who did some contract work for several months for a Georgia-based subsidiary of a Cali parent company. Then I moved to Arizona for a year to work as an FTE for an Arizona company. The tax vampires figured that was close enough. Unfortunately for them, I formerly practiced state and local tax law and know something about nexus and the Constitution.


47 posted on 01/22/2013 3:51:45 AM PST by mikeus_maximus
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To: Orange1998

Incorporate my man, incorporate.


48 posted on 01/22/2013 3:52:00 AM PST by 1010RD (First, Do No Harm)
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To: SeekAndFind

California government is a tax vampire. I never lived there, never worked there, and still had to write a lengthy letter to get them to leave me alone. My crime? I’m a Georgia resident who did some contract work for several months for a Georgia-based subsidiary of a Cali parent company. Then I moved to Arizona for a year to work as an FTE for an Arizona company. The tax vampires figured that was close enough. Unfortunately for them, I formerly practiced state and local tax law and know something about nexus and the Constitution.


49 posted on 01/22/2013 3:51:59 AM PST by mikeus_maximus
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To: max americana

Try Cebu or Cagayan de Oro rather than Manila ,, much nicer places to live ... and remember , accounts in foreign currency (USD) have stricter privacy protections in the RP than you have in the Bahamas or Caymans.. If you earn anymoney make sure to filter it through a LLC or similar..


50 posted on 01/22/2013 4:13:14 AM PST by Neidermeyer
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