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post #1 of 27 Old 11-27-2012 Thread Starter
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Domicile or Residence...

So I'm considering several options that I could implement over the next few years as I move on to the next chapter.

1. Stay here in VA and cruise part time.

2. Sell everything and cruise full time.

3. Sell my house and buy another small place in another, more tax friendly location and do some combination of 1 and 2.

4. Sell, not buy, but rent somewhere else and cruise.


The trouble is if establish residency somewhere else, SOME states try to tax the hell out of you even if you aren't there more than half the year. (I believe MN is one) (Not that I want to live THERE!) You need to establish SOME place as your domicile of record. And nowadays you have to have a PHYSICAL address to get a driver's license and you need to have some place of residence for your USCG Doc paperwork.

I was wondering what full time cruiser's do and what folks do that cruise part of the year and then spend part of the year ashore. I wouldn't mind having a house that I live in for 3, 4 months of the year, but I'll be damned if I'm going to pay state taxes to someplace that I don't claim as my domicile.
And what about Ex-Pats? If you're living outside the country and aren't even in the US except maybe a month for visiting do you even have to claim a state of residence?

Just wondering how to deal w/ this issue.

CS 36M DIANTHUS
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post #2 of 27 Old 11-27-2012
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Re: Domicile or Residence...

We're fulltime liveaboards with no land house. My drivers license used my marina lease to establish residency and the slip # is part of my legal address. Talk to the folks at St Brendan's Isle mail forwarding service; they are used to dealing with this issue & can get you FL residency. They are also the address we use for our USCG documentation.


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post #3 of 27 Old 11-27-2012
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Re: Domicile or Residence...

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Originally Posted by sailordave View Post
(I believe MN is one) (Not that I want to live THERE!).
Yea,,,,,who would want to live in Minnesota....that place SUCKS!!!


(Been a long day and just goofing on your emphatic feelings of living in MN. Actually, I have never met a person from Minnesota that I didn't like.)
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post #4 of 27 Old 11-27-2012
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Re: Domicile or Residence...

+1 on the St Brendan's Isle.

Located in Green Cove Springs, FL, SBI can assist you in getting all of your paperwork lined up to establish FL residency using that address. It's not difficult. FL won't tax your income, whether it's W2 or 1099R.
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post #5 of 27 Old 11-27-2012 Thread Starter
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Re: Domicile or Residence...

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Yea,,,,,who would want to live in Minnesota....that place SUCKS!!!


(Been a long day and just goofing on your emphatic feelings of living in MN. Actually, I have never met a person from Minnesota that I didn't like.)
Minnesota is very pretty. And I'm sure it's wonderful for oh, say 7 weeks out of the year. I just could not do fall, winter, and spring there.

And yes the people are nice. Lots of places in the country are NICE, inexpensive and totally NOT near the open water.


I've heard a lot about St. Brendans. Are there any other such services that are NOT in FLA? (Yes, that's one other such place I really don't want to live) even though it would just be an address.
I know, picky picky picky.

And what do folks do that totally leave the country? Establish residency/domicile in a foreign country?

CS 36M DIANTHUS
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post #6 of 27 Old 11-28-2012
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Re: Domicile or Residence...

When we lived in a foreign country, we kept the state where we had lived in previously. It is a state without state income tax. It was a slightly different situation, but I just used my parents address if for whatever reason I NEEDED to put down a physical address.

We now live on a boat in the same state, and the few times that someone has NEEDED a physical address, we generally give the marina address, I will confess to not changing my drivers license yet, so I am not sure if it will be PO Box or Marina on it . . .
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post #7 of 27 Old 11-28-2012
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Re: Domicile or Residence...

First I'm hearing of a state that can tax your income, even if you are not there at all. All states have rules about when you owe taxes, based on staying longer than a prescribed amount of time.

It is common for a state to run database matches on things like driver's licenses and send tax due notices to people with local addresses and no tax return. Its a scare tactic and they may be right much of the time. However, if you've followed the rules, you don't owe. The substantial obligation is that you can prove where you actually were. You can send your mail anywhere you like, that also doesn't mean you are there.

States don't find everyone, but when then get onto you, they get very aggressive. They will check your cell phone records, credit card statements, IP address where you signed onto your email address and more. You better be where you say you are.

We will adopt the part time cruising option at some point and stay ashore for the rest of the year. When we do so, we are leaning heavily on establishing residency in a state with no income taxes. Leading contenders are NH and FL, right now. However, that will mean that we actually spend 6+ months there and cruise the rest. Said differently, we will be sure we don't live aboard anywhere for longer than the time they state requires one to pay.

Bottom line. Follow the rules very carefully. Penalties and interest for screwing up are a killer. Intentional fraud, such as claiming you are somewhere you are not, is criminal.


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post #8 of 27 Old 11-28-2012 Thread Starter
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Re: Domicile or Residence...

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First I'm hearing of a state that can tax your income, even if you are not there at all. All states have rules about when you owe taxes, based on staying longer than a prescribed amount of time.
I think if you go back and look at my OP, you'll see I qualified that statement w/ even if you aren't there more than half the year.


I've read of a few court cases involving this and basically the states took a very aggressive position of what constituted "Domicile". Personally I think we'll see more of this as states face budget issues.

I doubt I would go the St. Brendans route unless I am w/o a house and off cruising full time; don't want to live in FLA and wouldn't want the hassle of "proving" I was a FLA resident.

Of course the other option is to just not own anything (cept the boat of course) and keep moving! Then they can't catch ya!

CS 36M DIANTHUS
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post #9 of 27 Old 11-28-2012
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Re: Domicile or Residence...

I live in Florida, in part because there is no income tax (but mostly because it does not s**w in the winter). I am not asking to provoke you SailorDave, but why would you not want a Florida domicile while you cruise? Was Mickey Mouse mean to you? We can talk severely to him on your behalf if we have to.
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post #10 of 27 Old 11-28-2012
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Re: Domicile or Residence...

I came back to Maine because of my boat. I'll make it through one more winter here. Lordy the wind chill has been rugged the past few days. I like the looks of Pamlico Sound, Oriental, New Bern. Feedback?
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