Join Date: Feb 2010
Location: Narragansett Bay
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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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