Let's say that you live in Florida, but have a few businesses up the coast in Connecticut. You would like to make sure that Florida is your state of domicile in order to take advantage of tax benefits. In order to do this, you have already registered to vote in Florida, have a Florida driver's license, and spend at least six months out of the year in Florida. These are great first steps, and the following article will explain the basics of residency, and should help you identify potential issues.
Definition of Residency
Each state has its own law that defines residency for tax purposes, which may apply to you even if you believe you are a resident of Florida. As an example, under Connecticut's Department of Revenue Services income tax regulations you are considered a resident of Connecticut if you:
As is evident, even if you have all of your personal property in Florida, and consider Florida your home, owning a residence out of state, and spending a lot of time out of state, may trigger out of state income tax laws. In that case, you may owe back taxes without knowing it.
Domicile is defined as the place where a person has a fixed and permanent home. Generally, the state tax agencies consider five factors in determining your domicile:
Declaration of Domicile
Florida gives residents the option of completing a form called a Declaration of Domicile. This form is a legal declaration of your intent to reside and remain in Florida. You will have to sign the form in front of a notary, and file it with the local courthouse. However, this form may not be recognized by other states.
Ways to Create Stronger Ties to Florida
There are things you can do to support your claim of being domiciled in Florida. Sticking to our example above, your Florida home should be worth more than your Connecticut home. Your most important personal items should be located in Florida, and you should make sure to save all evidence of moving them there. You should also make sure that you make any large purchases in Florida, like cars, furniture, and art.
Are You a Florida Resident? Get Clarity by Speaking With an Attorney
Changing your domicile for tax purposes may be difficult to do on your own and you may need help planning a strategy that fits the specifics of your situation. If you would like to know more about these issues, or if you have questions about your residency, there are many tax attorneys throughout Florida who are available to help.
Contact a qualified attorney.