For other versions of this document, see http://wikileaks.org/wiki/CRS-95-895 ------------------------------------------------------------------------------ Order Code 95-895 A CRS Report for Congress Received through the CRS Web State Income Taxation of Military Personnel and United States Citizens Residing Outside of the United States Updated July 24, 2003 Kerstin Roper Law Clerk John Luckey Legislative Attorney American Law Division Congressional Research Service ~ The Library of Congress State Income Taxation of Military Personnel and United States Citizens Residing Outside of the United States Summary This report examines and summarizes the laws of the fifty states and the District of Columbia respecting taxation of income of citizens domiciled within the state but residing abroad. It has been prepared biennially for many years. This report is divided into an introduction and four sections. The introduction includes a brief summary of pertinent provisions of Federal law, including 1) the Soldiers' and Sailors' Civil Relief Act (containing special provisions governing the treatment of members of the military for domicile and state income tax purposes) and 2) Internal Revenue Code provisions governing exclusion of income earned in foreign countries, which may have an impact upon state treatment of the income of domiciliaries residing abroad. Section I discusses the six states (and the District of Columbia) which have no special credit for foreign taxes paid or some exemption for income earned abroad. The definitions of domicile and residency, the tax base and the probable income tax obligation of domiciliaries abroad are addressed. Two of these states do not tax earned income (Tennessee and New Hampshire). Tennessee taxes only income from stocks and bonds, and New Hampshire taxes dividends and interest and unincorporated businesses. Section II focuses on those eleven states which provide a state income tax credit for foreign income tax paid. Statutory language is summarized for each of these states. In a number of cases the statutes provide for a credit for taxes outside the state ( to other states and to foreign countries). Section III summarizes the provisions of law in those twenty-six states that exclude some foreign source earned income from state taxation, following federal law on the subject. Section IV lists the seven states which have no income tax. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. States with No Foreign Tax Credit or Exemption Provision . . . . . . . . . . . . . . . 3 Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 District of Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 New Hampshire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 II. States Granting an Income Tax Credit for Foreign Income Tax Paid . . . . . . . . 8 Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Massachusetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Montana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 North Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 III. States Exempting Income Earned Abroad to the Same Extent as Federal Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Connecticut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Kentucky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Maryland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Nebraska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 NorthDakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Vermont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 West Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 IV. States Having No Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 South Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 State Income Taxation of Military Personnel and United States Citizens Residing Outside of the United States Introduction This report examines and summarizes the laws of the fifty states and the District of Columbia respecting the taxation of income of United States citizens domiciled within the state but residing abroad. The report is divided into four substantive sections. Section I discusses the law of states with no foreign tax credit or exemption provision. Section II analyzes the laws of states which grant an income tax credit for foreign income tax paid to a foreign country. In many cases, these states merely permit credit of any taxes paid outside of the state, whether to other states or to foreign governments. Section III describes the laws of the states which exempt income earned abroad to the same extent as such income is exempted by federal law. Section IV lists the seven states which have no income tax. Since no income tax is imposed, there can really be no substantive discussion of the treatment of United States citizens domiciled in the state but residing abroad. States which tax only certain types of income, such as dividends and interest (see discussions of New Hampshire and Tennessee), are discussed under the general tax provisions in Section I. The first three sections are divided into a discussion of the definitions of domicile and residency for state income tax purposes, the tax base used by the state, and the probable income tax obligation in each of these states for domiciliaries residing abroad. In addition, special note is made where state domicile or residency is determined in whole or in part by voting within the state and where special rules apply to military personnel. In regard to the special rules applicable to military personnel, a number of states merely refer to the tax provisions of the Soldiers' and Sailors' Civil Relief Act of 1940, presently found at 50 U.S.C. App. 574. Generally, this section provides that for state income tax purposes, an individual does not lose domicile in a specific state solely "by reason of being absent therefrom in compliance with military or naval orders . . . . " The same law also provides that, for state income tax purposes, an individual does not acquire residence or domicile solely because of location under military orders. The Act further states that, where an individual is not deemed to reside or be domiciled in a state, military income will be treated by that state as non- resident income not earned within the state. Section 911 of the Internal Revenue Code (IRC) permits United States citizens who reside abroad to exclude from their gross income up to $80,000 of foreign earned income in tax year 2003 and a certain recognized amount for housing. This CRS-2 exclusion applies to taxpayers living abroad who were present in a foreign country or countries for 330 days out of any 12 consecutive months. The housing cost amount is the excess of the taxpayer's expenses over a base housing amount. The base housing amount is equal to 16 percent of the salary of a GS-14 government employee. As of January 1, 2003, this salary is $72,381 so that the current base housing amount would be $11,580.96. Housing costs provided by an employer may also be excluded from the gross income of the employee. In line with this, IRC § 119 provides that lodging furnished in an overseas camp may be excluded from the employee's income. It should be noted that neither exclusion is applicable to wages paid by the United States government even if the Federal employee is residing abroad. Most states, and the District of Columbia, have signed agreements with the Treasury Department which provide for the withholding of state income taxes from the pay of service members. The text of the standard agreement may be found at 31 CFR § 215.6 - 13 (2001). The following states do not have standard agreements with the Treasury Department to withhold state income taxes from the pay of members of the armed services: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. The information contained in this report is accurate through the end of the 2002 legislative session of each state. CRS-3 I. States with No Foreign Tax Credit or Exemption Provision PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Alabama Domicile, maintaining a permanent place of abode within The entire net income of domiciliaries Residents -- Subject to State the State, or spending in the aggregate more than seven and residents as defined by the statute. income tax on all income. months of the year within the State. Ala. Code tit. 40, § 18- Ala. Code tit. 40, § 18-2. 2(7). Non-residents -- Taxable on Non-residents taxable on income from income from property owned Voting in Alabama is a factor considered by the courts in property owned or business transacted or business transacted in determining whether an individual is domiciled in Alabama in Alabama. Ala. Code tit. 40, § 18- Alabama. for tax purposes. State ex rel. Rabren v. Baxter, 46 Ala. 2(6). App. 134, 239 So. 2d 206 (1970). Resident military personnel -- Resident military personnel taxable on Subject to State income tax on The Alabama Tax Regulations state that military personnel entire net income except income all income except income domiciled in Alabama continue to be domiciliaries received for active combat duty. Ala. received for active combat irrespective of their period of absence or actual place of Code tit. 40, § 18-3. duty. residence until proof of change of domicile or residence has been made. If domicile has changed, the burden of proof is Non-resident military personnel are Non-resident military on the taxpayer though he owns no property, earns no not taxed on military pay received personnel -- Subject to State income, and has no place of abode in Alabama. Ala. Tax. while stationed in Alabama. income tax on non-military Regs.,§ 810-3-2-.01. income earned within the Wives of military personnel taxable on State. income earned within the State. Military personnel taxable on non- Wives of military personnel -- military income earned within the Taxable on income earned State. within the State. All military retirement payments are exempt from state income taxation. Ala. Code tit. 40, § 18-20 CRS-4 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION California Residents -- The term "resident" for income tax purposes The entire taxable income of a resident Residents -- Subject to state includes: (a) every individual who is in the state for other of the state. Cal. Rev. & Tax Code § income tax on all taxable than a temporary or transitory purpose, and (b) every 17041(a). The entire taxable income income. Non-residents -- individual domiciled in the state who is outside the state for of a non-resident of the state which is Subject to state income tax on a temporary or transitory purpose. If such person is absent derived from sources within the state. all taxable income derived for at least 18 months under an employment dated contract Cal. Rev. & Tax Code § 17041(b). from sources within the state. they are not considered to be outside the state for a temporary or transitory purposes (This exception does not Non-resident military personnel are Resident military personnel -- apply to those who receive over $200,000 in unearned not taxed on military income received Subject to state income tax on income in a tax year). Any individual who is a resident of while stationed in California. Spouses all taxable income. the state continues to be a resident even though temporarily of military personnel taxable on absent from the state. An individual domiciled in California income derived from sources within Non-resident military is absent from the state for a temporary purpose if such the state. personnel -- Subject to state absence is by reason of (1) holding an elected or appointed tax on non-military taxable office in the Federal Government or (2) working on the staff Gross income shall not include income derived from sources of an elected officer of the legislative branch of the U.S. compensation for military service within the state. Government. Cal. Rev. & Tax Code § 17014. performed by a non-resident and attributable to a resident spouse solely Wives of military personnel -- Every individual who spends in the aggregate more than by application of any community Subject to state income tax on nine months of the taxable year within the state is presumed property law or rule. Cal. Rev. & Tax all taxable income derived to be a resident. Cal. Rev. & Tax Code § 17016 Code § 17140.5. from sources within the state. Military hazardous duty pay which is exempt under IRC § 112 is specifically exempt from the state income tax. Cal. Rev. & Tax Code § 17142.5 CRS-5 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION District of Residents -- The term "resident" is defined as every The entire net income of residents. Residents -- Subject to D.C. individual domiciled within the District on the last day of D.C. Code § 47-1806.1. income tax on net income. Columbia the taxable year, and every other individual who maintains a place of abode within the District for more than 183 days The District of Columbia is precluded Non-residents -- Not subject of the taxable year, whether domiciled in the District or not. from levying a non-resident income to the income tax. D.C. Code tit. 47, § 1801.4. Under an earlier District of tax by Public Law 93-198, 602(a), 87 Columbia tax law, the Supreme Court held that whether or Stat. 813; D.C. Code § 1-233(a)(5); § Military personnel -- Not not a person votes where he claims domicile is highly 47-1801.4. subject to income tax on relevant, but by no means controlling on the question pensions or annuities up to whether he is domiciled in the District of Columbia, nor is See IRC § 104(a)(4). $3000. D.C. Code § 47-1803.2 failure to vote elsewhere conclusive that domicile is in the District. District of Columbia v. Murphy, 314 U.S. 441 (1941); see also District of Columbia v. Woods, 465 A.2d 385 (1983). See Soldiers' and Sailors' Civil Relief Act. Mississippi Residents and non-residents -- The term "resident" is The entire net income of residents. Residents -- Subject to tax on defined as any person domiciled in the state and any other Miss. Code § 27-7-5. The entire net their entire net income. person who maintains a legal or actual residence within the income of non-residents from sources state. Miss. Code § 27-7-3(e). within Mississippi. Miss. Code § 27- Non-residents -- Subject to tax 7-15(3). on their entire net income The term "non-resident" is defined as any natural person from sources within whose domicile and place of abode is without the state. Mississippi excludes from gross Mississippi. Miss Code § 27-7-3(f). The Mississippi Tax Regulations income: (1) the first $500 per month define "legal resident" as one who maintains a place of received as compensation for active Military personnel -- Not abode in Mississippi or who exercises legal rights such as service in a combat zone or during subject to income tax on: (1) voting. One can be a legal resident though domiciled hospitalization as a result of such the first $500 per month elsewhere. Miss. Tax Reg. 1.27-7-3(5)(c); State Tax service and; (2) hazardous duty combat compensation for active Commission of the State of Mississippi v. Earnest, 627 pay to members of the armed forces. service in a combat zone or So.2d 313 (1993). Miss. Code § 27-7-15(4)(j), (n). during hospitalization as a result of such service and (2) hazardous duty combat pay. CRS-6 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Mississippi The Mississippi Tax Regulations state that members of the The entire income of spouses of Spouses of military personnel (Continued) armed forces who claim Mississippi as their state of legal military personnel of non-military pay -- Subject to tax on non- residence/domicile are liable for Mississippi income tax on from sources within Mississippi is military pay from sources their income. Non-resident members of the armed forces taxable. Miss. Tax Regs. § 1.27-7- within Mississippi. stationed in Mississippi who realize income from non- 15(34). military sources within the state must file a non-resident Individual Income Tax Return. Miss. Tax Regs. § 1.27-7- 15(34). New Taxes inhabitants or residents on interest and dividend Interest and dividend income over Inhabitants or residents -- income. N.H. Rev. Stat. Ann. § 77:3. $2,400 per year. N.H. Rev. Stat. Ann. Subject to tax on interest and Hampshire § 77:5. dividends over $2,400. No mention is made of military personnel. New Jersey Residents -- "Residents" means (1) domiciliaries unless Residents -- New Jersey gross income Resident -- Subject to tax on they maintain no permanent place of abode in the state, as defined by statute. N.J. Stat. Ann. § their entire New Jersey gross maintain a permanent place of abode elsewhere, and spend 54A:5-1. income. an aggregate of not more than 30 days in the state or (2) persons not domiciled in New Jersey who maintain a Non-residents -- Specified categories Non-residents -- Subject to tax permanent place of abode in the state and spend an of New Jersey gross income to the on the specified categories of aggregate of more than 183 days in the state, unless such extent they are earned, received or New Jersey gross income individual is in the armed forces of the United States. N.J. acquired from New Jersey sources. from New Jersey sources. Stat. Ann.§ 54A:1-2(m). N.J. Stat. Ann. § 54A:5-8. Military personnel -- Resident - subject to tax on entire income. CRS-7 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION New Jersey Non-residents -- "Non-resident" means a taxpayer who is New Jersey excludes from gross Non-resident -- not subject to (Continued) not a resident. N.J. Stat. Ann.§ 54A:1-2(n). income: (1) pensions and annuities for tax on military income. personal injuries or sickness resulting Subject to tax on specified from active service in the armed forces New Jersey gross income of the United States; (2) compensation from New Jersey sources. for service in the armed forces of the United States to an individual not domiciled in New Jersey; (3) mustering-out payments to members of the armed forces of the United States; and military pensions and survivor benefit payments. N.J. Stat. Ann. §§ 54A:6-6, 6-7, and 6-26. Tennessee Persons in the state -- The term "person" is defined as every (1) The income of persons in the State Persons in the state -- Subject natural person, inhabitant, resident (any person who has a from dividends on stock and interest to tax on dividends from stock legal domicile in Tennessee), and every person who on bonds. Tenn. Code Ann. § 67-2- and interest on bonds. maintains a place of residence for more than six months in 102. the tax year (regardless of what place such person may Resident military -- Subject to claim as legal domicile). Tenn. Code § 67-2-101(5). No interest or penalties may be tax on dividends from stock assessed against service member and interest on bonds. serving in combat zone or hospitalized as result of injury in a combat zone. Tenn. Code § 67-2-114(a). CRS-8 II. States Granting an Income Tax Credit for Foreign Income Tax Paid PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Arizona Residents and certain non-residents -- The term "resident" The entire taxable income of every Residents -- Subject to tax on includes: (1) every individual who is in the state for other resident and the entire taxable income entire net income with §§ 911- than a temporary or transitory purpose, and (2) every of every non-resident which is derived 912 and § 112 exclusions and individual domiciled in the state who is outside the state from sources within the state. Ariz. the possibility of receiving a for a temporary or transitory purpose. Every individual Rev. Stat. Ann. § 43-1011. Since credit for foreign taxes paid. who spends in the aggregate more than nine months of the Arizona computes its own taxable taxable year within the state is presumed to be a resident. income from federal adjusted gross Non-residents -- Subject to tax Ariz. Rev. Stat. Ann. §§ 43-104(14), 43-104(19). income, the exclusions under §§ 911- on net income derived from 912 of the IRC for income from sources within Arizona with See Soldiers' and Sailors' Civil Relief Act. 50 U.S.C. sources without the United States are the possibility of receiving a App. § 574. apparently adopted by into the credit for foreign taxes paid on computation of Arizona taxable such income. income. Any combat pay not already excluded by § 112 of the IRC is specifically excluded . Ariz. Rev. Stat. Ann. § 43-1022(19). Residents are allowed a credit only for taxes paid to the other state or country on income derived from sources within that state or country which is taxable under the foreign laws without regard to the residence or domicile of the recipient. No credit is allowed if the other state or country allows residents of Arizona a credit against taxes imposed by that state or country for taxes paid to Arizona. Ariz. Rev. Stat. Ann. § 43-1071. CRS-9 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Arizona Non-residents are allowed a credit (Continued) against Arizona taxes on income derived from sources within Arizona only if (1) the foreign country does not tax income of residents of Arizona derived from sources within that country or (2) allows residents of Arizona credit against taxes imposed by that country on such income for taxes paid to Arizona. Ariz. Rev. Stat. Ann. § 43-1096. Hawaii Residents and certain non-residents -- A "resident" is The entire income of all residents. The Residents -- Subject to tax on defined as every individual who resides in the state for income received or derived from all income with § 911 and § other than a temporary or transitory purpose. Every property owned, personal services 112 exclusions, and with the individual who is in the state more than 200 days of the performed, trade or business carried possibility of a credit for taxable year in the aggregate is presumed to be a resident. on, and any and every other source in foreign taxes paid. This presumption may be overcome by evidence the state by a non-resident. Haw. Rev. satisfactory to the Department of Taxation that the Stat. § 235-4(a), (b). Because Hawaii Non-residents -- Subject to tax individual maintains a permanent place of abode outside computes its own taxable income from on income derived from of the state and is in the state for a temporary or transitory federal adjusted gross income, the sources within Hawaii, with purpose. No person shall be deemed to have gained or exclusions under § 911 of the IRC for the possibility of a credit for lost a residence simply because of his presence or absence income from sources without the foreign taxes paid. in compliance with military or naval orders. Haw. Rev. United States are apparently adopted Stat. § 235-1. into the computation of Hawaii taxable Military personnel -- Subject income. Section 912 exclusions are to tax on military specifically added back into Hawaii compensation with the adjusted gross income. Haw. Rev. Stat. exclusion of combat pay. § 235-7(b). CRS-10 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Hawaii Residents are allowed a credit for taxes (Continued) paid to an other state or country, which are paid on income derived from sources outside the state. The credit is not allowed for taxes paid on income excluded under § 911. Haw. Rev. Stat. § 235-55(a). Because Hawaii computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently incorporated into the computation of Hawaii taxable income. The first $1,750 of income to members of the armed forces reserves is also excluded from gross income. Haw. Rev. Stat. § 235-7(a)(7) CRS-11 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Indiana Residents and non-residents -- The term "resident" is The entire federal adjusted income of Residents -- Subject to tax on defined as any individual who was domiciled in the state residents, with adjustments not herein federal adjusted gross income during the taxable year, or any individual who maintains relevant. Ind. Stat. § 6-2.1-2-2. (above the exclusions under a permanent place of residence in the state and spends §§ 911-912 of the IRC) with more than 183 days of the taxable year within the state. Since Indiana computes its own the possibility of a credit for Ind. Stat. § 6-3-1-12. taxable income from federal adjusted foreign taxes paid. gross income, the exclusions under §§ The term "non-resident" is defined as any person who is 911-912 of the IRC for income from Non-residents -- Subject to tax not a resident of Indiana. Ind. Stat. § 6-3-1-13. sources without the United States are on federal adjusted gross apparently adopted into the income derived from sources See Soldiers' and Sailors' Civil Relief Act. computation of Indiana taxable within Indiana, with the income. Ind. Stat.§ 6-2.1-2-2. The possibility of a credit for federal adjusted gross income of non- foreign taxes paid. residents derived from sources within Indiana. Ind. Stat. § 6-2.1-2-2. Military personnel and merchant marine -- Subject to Indiana also gives its residents and tax on military compensation non-residents a credit against Indiana with stated exclusions. income tax for taxes paid to another state or foreign country on income subject to tax in Indiana. Ind. Stat. §§ 6-3-3-3, 6-3-1-25. Indiana allows a deduction of $2,000 per year from adjusted gross income for individuals who are members of the United States armed forces. Military retirees over 60 years of age may deduct $2,000 in retirement or survivors' benefits. Ind. Stat. § 6-3-2- 4. CRS-12 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Iowa Residents and non-residents -- The term "resident" is The entire income of the residents Residents -- Subject to tax on defined as any individual domiciled in the state, and any defined as federal adjusted gross federal adjusted gross income other individual who maintains a permanent place of income, with certain adjustments not (above the exclusions under abode with the state. Iowa Code § 422.4(15). The term herein relevant. Iowa Code § 422.7. §§ 911-912 of the IRC) with "non-resident" includes all individuals who are not Since Iowa computes its own net the possibility of a credit for residents. Iowa Code § 422.4(10). income from federal adjusted gross foreign taxes paid. income, the exclusions under §§ 911- The Iowa tax regulations state that unless there is 912 of the IRC for income from Non-residents -- Subject to tax evidence to the contrary, one will be presumed to be sources without the United States are on federal adjusted gross domiciled in the state if he or she exercises the right to apparently adopted into the income derived from sources vote, uses homestead credit or military exemption, or computation of Iowa net income. within Iowa, with the otherwise exercises his or her rights to suffrage. Iowa possibility of a credit for Tax Regs. subrule 38.1(9); In the Matter of Fox, 1996 The net income of non-residents foreign taxes paid. Iowa Tax LEXIS 1996. derived from sources within Iowa. Iowa Code §§ 422.5(j); 422.8(2). Military personnel -- Subject See Soldiers' and Sailors' Civil Relief Act. to tax on military Iowa also provides a credit against compensation with stated Iowa tax for taxes paid to another state exclusions. or foreign country on income subject to tax in Iowa. Iowa Code § 422.8(1). Since Iowa computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into computation of Iowa taxable income. Iowa Code § 422.7 CRS-13 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Maine Residents and non-residents -- The term "resident" is The taxable income of residents is Residents -- Subject to tax on defined as an individual who is domiciled in Maine; or defined as federal adjusted gross taxable income in excess of who is not domiciled in Maine, but maintains a permanent income allocated to state sources with the exclusions under §§ 911- place of abode in Maine and spends in the aggregate more certain modifications not herein 912 of the IRC with the than 183 days of the taxable year in this state, unless he is relevant. Since Maine computes its possibility of a reduction of in the armed forces of the United States. Me. Rev. Stat. own taxable income from federal taxes for taxes paid to another tit. 36 § 5102. adjusted gross income, the exclusions jurisdiction. under §§ 911-912 of the IRC for The term "non-resident" is defined as an individual who income from sources without the Non-residents -- Subject to tax is not a resident. Me. Rev. Stat. tit. 36 § 5102. United States are apparently adopted on the portion of federal into the computation of Maine taxable adjusted gross income derived See Soldiers' and Sailors' Civil Relief Act. income. Me. Rev. Stat. tit. 36 § 5121. from sources within Maine with the possibility of a The portion of federal adjusted gross reduction in taxes for taxes income of non-residents derived from paid to another jurisdiction. sources within the state. Me. Rev. Stat. tit. 36 § 5142. Military personnel -- Subject to tax on military A resident is allowed a tax credit for compensation with stated taxes paid to another state or foreign exclusions. country. Me. Rev. Stat. tit. 36 § 5217A. If a taxpayer is regarded as a resident of Maine and another jurisdiction for the purpose of personal income taxation, the tax assessor shall reduce the tax on that portion of the taxpayer's income which is subjected to tax in both jurisdictions, provided that the other taxing jurisdiction allows a similar reduction. Me. Rev. Stat. tit. 36 § 5128. Since Maine computes its own taxable income from federal adjusted gross CRS-14 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Maine the IRC for compensation received for (Continued) active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of Maine taxable income. Me. Rev. Stat. tit. 36 § 5121. CRS-15 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Massa- Residents and certain non-residents -- The term "resident" The taxable income of residents Residents -- Subject to tax on or inhabitant is defined as (1) any natural person defined as federal adjusted gross federal adjusted gross income chusetts domiciled in the Commonwealth or (2) a non-domiciled income. However, Massachusetts does without the exclusion under § natural person who has a permanent place of abode and not allow the exclusion of income 911 of the IRC for income spends over one hundred and eighty three days in the from sources without the United States derived from sources without Commonwealth. The term "non-resident" is defined as in the computation of Massachusetts the United States. A credit for any natural person whose domicile is outside the taxable income. Mass. Gen. L. Ann. taxes paid to other states or Commonwealth. Mass. Gen. L. Ann. ch. 62, § 1(f). ch. 62 § 2(a)(1)(C). Massachusetts Canada or its provinces is allows a credit for taxes paid to other allowed. The Massachusetts Board of Tax Appeals has ruled that states or the Dominion of Canada or change of domicile from the Commonwealth to a foreign any of its provinces, with certain Non-residents -- Subject to tax country requires greater proof of intent to abandon limitations. Mass. Gen. L. Ann. ch. 62 on the portion of federal domicile than a change of domicile between states of the § 6(a). adjusted gross income derived United States. Farr v. Commissioner, 1 Mass. B.T.A. 467 from sources within (1932). The portion of federal adjusted gross Massachusetts. income of non-residents derived from See Soldiers' and Sailors' Civil Relief Act. sources within Massachusetts. Mass. Military personnel-- Gen. L. Ann. ch. 62 § 5A(a). Compensation paid to military personnel for active duty shall The compensation paid to military be deemed to be from sources personnel for active duty shall be other than sources within the deemed to be from sources other than Commonwealth. sources within the Commonwealth. Mass. Gen. L. Ann. ch. 62 § 5A(c). CRS-16 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Montana Residents and non-residents -- The term "resident" is (1) The entire adjusted gross income of Residents -- Subject to tax on defined as any natural person domiciled in the state or residents defined as federal adjusted federal adjusted gross income who maintains a permanent place of abode within the gr o s s i n c o me w i t h c e r t a i n above the exclusion of §§ 911- state even though temporarily absent from the state and modifications not herein relevant. 912 of the IRC. Foreign credit who has not established a residence elsewhere. Mont. Since Montana defines its adjusted is allowed. Code tit. 15 § 30-101(16). gross income in terms of federal adjusted gross income, the exclusions Non-residents -- Subject to tax See Soldiers' and Sailors' Civil Relief Act. under §§ 911-912 of the IRC for on net income derived from income from sources without the sources within Montana. United States are apparently adopted into the computation of Montana Military personnel -- Not adjusted gross income. Mont. Code tit. subject to tax on military 15 § 30-111. compensation. (2) The entire earned income of non- residents derived from sources within Montana. Mont. Code tit. 15 § 30-131. (3) Montana excludes remuneration paid for active service as a member of the armed forces of the United States from the definition of taxable wages for residents. Mont. Code tit. 15 § 30- 116(2). Residents are allowed a credit for taxes paid to other states or foreign countries. Mont. Code tit. 15 § 30- 124. CRS-17 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION New Mexico Residents and non-residents -- The term "resident" is (1) The net income of every resident Residents -- Subject to tax on defined as an individual who is domiciled in the state defined in terms of federal taxable net income above the during any part of the taxable year. Any person who, on income with certain modifications not exclusions under §§ 911-912 or before the last day of the taxable year, changes his herein relevant. Since New Mexico of the IRC with the possibility place of abode to a place without the state with the bona defines its tax base in terms of federal of a credit for taxes paid to fide intention of continuing actually to abide permanently taxable income, the exclusions under another state. without the state is not a resident. N. Mex. Stat.§ 7-2- §§ 911-912 of the IRC for income 2(S). derived from sources without the Non-residents -- Subject to tax United States are apparently adopted. on net income derived from The term "non-resident" is defined as every individual not N. Mex. Stat. § 7-2-3. sources within New Mexico. a resident of the state. N. Mex. Stat.§ 7-2-2(Q). (2) The net income of every non- Military personnel -- Subject See Soldiers' and Sailors' Civil Relief Act. resident derived from sources within to tax on military New Mexico. N. Mex. Stat. § 7-2-3. compensation with stated New Mexico defines "state" to include exclusions. foreign country. N. Mex. Stat. § 7-2- 2(U). (3) New Mexico also allows residents a credit for taxes paid to another state. N. Mex. Stat. § 7-2-13. Since New Mexico computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of New Mexico taxable income. N. Mex. Stat. § 7-2-2. CRS-18 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION North Residents and non-residents -- The term "resident" is (1) The net income of residents as Residents -- Subject to tax on defined as an individual who is domiciled in the state for defined under N.C. Gen. Stat. § 105- net income with the possibility Carolina other than a temporary or transitory purpose. Absent 134.5(a). Because North Carolina of a tax credit for taxes paid to other evidence, residence in the state for over 183 days of defines its adjusted gross income in another state or foreign the taxable year raises the presumption that the individual terms of federal adjusted gross income, country. is a resident. N.C. Gen. Stat. § 105-134.1(12). the exclusions under §§ 911-912 of the IRC for income from sources without Non-residents -- Subject to tax The term "non-resident" is defined as any individual who the United States are apparently on net income derived from is not a resident. N.C. Gen. Stat. § 105-134.1(9). adopted into the computation of North sources within North Carolina. Carolina adjusted gross income See Soldiers' and Sailors' Civil Relief Act. Military personnel -- Subject (2) The net income of non-residents to tax on military for income derived from sources compensation. within North Carolina. N.C. Gen. Stat. § 105-134.5(b). North Carolina allows its residents a credit against taxes paid to another state or foreign a country in certain instances. N.C. Gen. Stat. § 105-151. CRS-19 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Oregon Residents and non-residents -- The term "resident" is (1) The entire taxable income of Residents -- Subject to tax on defined as: (1) an individual who is domiciled in this state residents defined as federal taxable federal taxable income above unless he (A) maintains no permanent place of abode in income with certain modifications not the exclusions under § 911- this state, (B) does maintain a permanent place of abode herein relevant. Since Oregon defines 912 of the IRC and with the elsewhere, and (C) spends in the aggregate not more than its own taxable income in terms of possibility of a credit for 30 days in the taxable year in this state; or (2) an federal taxable income, the exclusions foreign taxes paid. individual who is not domiciled in this state, but under §§ 911-912 of the IRC for maintains a permanent place of abode in this state and income from sources without the Non-residents -- Subject to tax spends in the aggregate more than 200 days of the taxable United States are apparently on federal taxable income year in this state, unless he proves that he is in the state incorporated into the computation of derived from sources within only for a temporary or transitory purpose. Ore. Rev. Oregon taxable income. Ore. Rev. Oregon. Stat. § 316.027(1)(a), (b). Stat. §§ 316.007, 316.037. Military personnel -- Subject A non-resident is an individual who is not a resident. Ore. (2) The taxable income of non- to tax on military Rev. Stat. § 316.022(4). residents derived from sources within compensation above the first Oregon. Ore. Rev. Stat. §§ 316.117, $3,000. 316.127. Oregon also gives to residents a credit against Oregon income taxes for taxes imposed on the taxpayer by another state. Ore. Rev. Stat. § 316.082. A modified foreign tax credit is allowed. Ore. Rev. Stat. § 316.690. (3) Oregon subtracts from federal taxable income the first $3,000 of income compensation (other than pension or retirement pay) for active service in the Armed Forces of the United States. All compensation for the initial and concluding years of active service in the Armed Forces of the United States is deducted from adjusted gross income. Ore. Rev. CRS-20 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Pennsylvania Residents and non-residents -- The term "resident" is (1) The entire income of residents Residents -- Subject to tax on defined to include both (1) domiciliaries, unless the defined under Pa. Stat. tit. 72 § 7303. income with a credit for taxes domiciliary maintains no permanent place of abode paid to another state or foreign within the Commonwealth, maintains a permanent place (2) The income of non-residents country on income also of abode outside the Commonwealth and resides within derived from sources within subject to tax in Pennsylvania. the Commonwealth for less than thirty days of the taxable Pennsylvania. Pa. Stat. tit. 72 § 7303. year, and (2) non-domiciliaries maintaining a permanent Non-residents -- Subject to tax place of abode within the Commonwealth for more than Pennsylvania allows residents a credit on income from sources 183 days of the taxable year. Pa. Stat. tit. 72 § 7301(p). for taxes paid to another state or within Pennsylvania. foreign country on income also subject "Non-resident" is defined as any individual who is not a to tax in Pennsylvania. Pa. Stat. tit. 72 Military personnel -- Subject resident. Pa. Stat. tit. 72 7301(m). §§ 7301(t), 7314. to tax on military income except for compensation for See Soldiers' and Sailors' Civil Relief Act. Military compensation for active duty active duty performed outside performed outside of Pennsylvania is of Pennsylvania. exempt from taxation. Pa. Stat. tit. 72 § 7303(a)(1). CRS-21 III. States Exempting Income Earned Abroad to the Same Extent as Federal Law (Sections 911 - 912 of the IRC) PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Arkansas Residents and non-residents -- The term "resident" is The entire income of every resident as Residents-- Subject to state defined to include any natural person domiciled in the state defined by the statute. Ark. Code Ann. income taxation on federal and any natural person who maintains a permanent place of § 26-51-201(a). adjusted gross income (above abode in the state and spends in the aggregate more than six the exclusions under §§ 911- months of the taxable year within the state. Ark. Code Ann. The exclusion and allowance of IRC 912 of the IRC). § 26-51-102(9). §§ 911 & 912 as they were in effect on January 1, 1989 are specifically Non-residents -- Subject to The Arkansas Tax Regulations state that a domicile does adopted for purposes of computing state income tax on all net not end by physical absence alone and is presumed to Arkansas income tax. Ark. Code Ann. income from sources within continue until a new domicile is legally established. The § 26-51-310. the state as previously defined. regulations contain a fact sheet listing the various factors to be taken into consideration in determining whether a new The entire net income of non-residents Resident military personnel -- domicile has been established. The elements of a new from all property owned, and from Subject to state income tax on domicile on the fact sheet include: voter registration and every business, trade or occupation entire income except for the exercise of suffrage during the last three elections, domicile carried on in Arkansas. Ark. Code first $6,000 of service pay. of birth, physical presence, expressed intention, family Ann. § 26-51-202(a). Combat pay is exempt and all residence, duty causing absence from Arkansas, state income in the year of death in licenses, location of substantial real and property holdings, Resident military personnel taxable on combat is exempt. community affiliations, business interests, bulk or necessary all income except for the first $6,000 purchases, utility or telephone deposits, and local taxes and of service pay. Ark. Code Ann. § 26- licenses. Ark. Tax. Reg., Art. 1.84-2002(10). The 51-306(a)(1). Non-resident military Arkansas Tax Regulations state that any resident member of personnel taxable on net income from the armed forces who at the time of the induction into such non-military sources earned within the service was a resident of this state, continues to be a state. Ark. Code Ann. § 26-51-306(b). resident of this state, even though he or she has been inducted into the armed service outside of the state and does IRC §§ 112 and 692, concerning not return to the state until after such service is ended. A taxation of combat pay and pay of member of the armed service who at the time of induction military personnel for the year they die was a resident in any state other than Arkansas is for in combat, are adopted and these types income tax purposes a non-resident even though he was of income are not included in the inducted into the service within Arkansas and he remains in $6,000 exemption. Ark. Code Ann. § CRS-22 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION the service within Arkansas. Ark. Tax. Reg., Art. 1.84- 26-51-306(a)(4). 2010. Colorado Resident individuals and non-residents -- The term The entire federal adjusted gross Resident individuals -- Subject "resident" individual means a natural person who maintains income of resident individuals, with to state income taxation on a permanent place of abode within the state and who spends certain modifications not herein federal adjusted gross income in the aggregate more than six months of the taxable year relevant. Colo. Rev. Stat. § 39-22-104. (above the exclusions under within the state. A "non-resident" individual means an Since Colorado computes its own §§ 911-912 of the IRC). individual other than a resident individual. Colo. Rev. Stat. taxable income from federal adjusted § 39-22-103(8). gross income, the exclusions under §§ Non-resident individuals -- 911-912 of the IRC for income from Subject to state income tax on The Colorado Tax Regulations state that domicile is a sources without the United States and federal adjusted gross income factual matter and that the individual's intent controls. The the exclusion under § 112 of the IRC attributable to sources within Regulations also state that domicile, once established, is not for compensation received for active Colorado. lost until a new domicile is established. Colo. Rev. Stat. § service as a member of the armed 39-22-103(8). forces of the United States for any Military personnel -- Subject month during which such member to tax on military pay with See Soldiers' and Sailors' Civil Relief Act. served in a combat zone are apparently stated exclusions. adopted into the computation of Colorado taxable income. Colo. Rev. Stat. § 39-22-104. The entire federal adjusted gross income of non-resident individuals derived from sources within Colorado. Colo. Rev. Stat. § 39-22-109. For purposes of determining income tax liability, Colorado disregards the time period during which an individual is a member of the armed forces of the United States: CRS-23 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Colorado (1) commencing with a declaration of (Continued) war by Congress and ending twelve months after the termination of the war; and (2) when an individual is serving in an area designated as a combat zone and a period of one hundred and eighty days after such service. Colo. Rev. Stat. § 39-22-610. Colorado subtracts retirement pay, pensions and annuities of members of the armed forces to the extent included in federal adjusted gross income not to exceed $24,000 in any one taxable year. Colo. Rev. Stat. § 39-22-104(f). CRS-24 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Connecticut Residents -- "Resident" means (1) domiciliaries unless they The entire federal adjusted gross Resident individuals -- Subject maintain no permanent place of abode in the state, maintain income of resident individuals, with to state income taxation on a permanent place of abode elsewhere and spend in the certain modifications not herein federal adjusted gross income aggregate not more than 30 days of the taxable year in the relevant. Conn. Gen. Stat. Ann. §§ 12- (above the exclusions under state and (2) non-domiciliaries who maintain a permanent 700 and 701(a)(19) & (20). §§ 911-912 of the IRC). place of abode in the state and are in the state for an aggregate of more than 183 days. Conn. Gen. Stat. Ann. § Since Connecticut computes its own Non-resident individuals -- 12-701(a)(1). taxable income from federal adjusted Subject to state income tax on gross income, the exclusions under §§ federal adjusted gross income "Non-resident" is defined as any individual who is not a 911-912 of the IRC for income from attributable to sources within resident. Conn. Gen. Stat. Ann. § 12-701(a)(2). sources without the United States and Connecticut. the exclusion under § 112 of the IRC See Soldiers' and Sailors' Civil Relief Act. for compensation received for active Military personnel -- Subject service as a member of the armed to tax on military pay with forces of the United States for any stated exclusions. month during which such member served in a combat zone are apparently adopted into the computation of Connecticut taxable income. Conn. Gen. Stat. Ann. § 12-700. The entire federal adjusted gross income of non-resident individuals derived from sources within Connecticut. Conn. Gen. Stat. Ann. § 12-700. CRS-25 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Delaware Resident individuals and non-resident individuals. A The entire taxable income of every Resident individuals -- "resident individual" is defined as one who is domiciled in resident individual defined as such Subject to state income the state for any part of the taxable year to the extent of the individual's federal adjusted gross taxation on federal adjusted period of such domicile; or maintains a place of abode in income with certain modifications not gross income (above the the state and spends more than 183 days of the taxable year herein relevant. Del. Code Ann. §§ exclusions under §§ 911-912 in the state. Del. Code Ann. § 30-1103. 30-1102 and 30-1105. of the IRC). A "non-resident individual" is defined as one who is not a Since Delaware computes its own Non-resident individuals -- resident individual of the state. Del. Code Ann. § 30-1104. taxable income from federal adjusted Subject to state income tax on gross income, the exclusions under §§ federal adjusted gross income The Delaware Superior Court has held that an individual 911-912 of the IRC for income from attributable to sources within who had moved to Washington, D.C. to take employment, sources without the United States and Delaware. but who continued to vote in Delaware had abandoned his the exclusion under § 112 of the IRC Delaware domicile. The court found that the voting, which for compensation received for active Military personnel -- Subject it termed "illegal," did not prove Delaware domicile. service as a member of the armed to tax on military Mitchell v. Delaware State Tax Commissioner, 42 A.2d 19 forces of the United States for any compensation with stated (Del. Supr. Ct. 1945). month during which such member exclusions. served in a combat zone are apparently See Soldiers' and Sailors' Civil Relief Act. adopted into the computation of Delaware taxable income. The taxable income of a non-resident individual defined as that part of his federal adjusted gross income derived from sources within the State. Del. Code Ann. § 30-1102(a). CRS-26 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Georgia Residents and taxable non-residents -- The term "resident" The taxable net income of all residents Residents -- Subject to tax on is defined to include "legal residents" of the state on defined as federal adjusted gross federal adjusted gross income December 31 of the taxable year in question, persons income less items not herein relevant. (above the exclusions under residing in the state on a "more or less regular basis" on Since Georgia computes its own §§ 911-912 of the IRC). December 31 of the taxable year under consideration, and taxable net income on the basis of persons residing in the state in the aggregate for 183 days or federal adjusted gross income, the Taxable non-residents -- part-days for the taxable year. Ga. Code § 48-7-1(10). exclusions under §§ 911-912 of the Subject to tax on net taxable IRC for income from sources without income derived from certain "Taxable non-residents" are defined to include the the United States are apparently specified activities within following: (1) every individual who is not otherwise a adopted into the computation of Georgia. resident of Georgia for income tax purposes and who Georgia taxable net income. Ga. Code regularly, and not casually or intermittently, engages within § 48-7-27. Military personnel -- Subject Georgia, himself or by means of employees, agents or to tax as residents on federal partners, in employment, trade, business, professional, or The federal exclusion under § 112 of adjusted gross income less other activity for financial gain or profit, including the the IRC for compensation received for specified items. rental of real or personal property located within Georgia or active service as a member of the for use within Georgia; and (2) every individual who is not armed forces of the United States for otherwise a resident of Georgia for income tax purposes and any month during which such member who sells, exchanges or otherwise disposes of tangible served in a combat zone or was property which at that time has a taxable situs within hospitalized as a result of an injury Georgia, or of intangible property which has acquired at the incurred in such service is specifically time a business or commercial situs within Georgia. adopted into the computation of "Taxable non-resident" as defined herein does not include Georgia taxable income. Ga. Code § a legal resident of another state whose only activity for 48-7-36. financial gain or profit in Georgia consists of performing services in Georgia for an employer where the remuneration for such services does not exceed five percent of the income received by such person for performing services in all places during any taxable year; Ga. Code § 48-7-1(11)(A) & (B). See Soldiers' and Sailors' Civil Relief Act. CRS-27 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Idaho Residents, and part-year resident. The term "resident" is Taxable income of residents defined as Residents -- Subject to tax on defined as any individual who during the taxable year has taxable income under § 63 of the IRC. federal taxable income (above been domiciled in Idaho or has maintained an abode in Since Idaho computes its taxable the exclusions under §§ 911- Idaho for the entire tax year and spent more than 270 days income from federal taxable income, 912 of the IRC). of that year in the state. An individual will not be §§ 911-912 of the IRC for income considered a resident if during a 15 month period he is from sources without the United States Non-residents and part-year absent from the state for at least 445 days, is not present in are apparently adopted into the residents -- Subject to tax on the state for more than 60 days, did not maintain an abode computation of Idaho taxable income. federal taxable income for his family in the state, was not absent to serve as an Ida. Code 63-3022. attributable to certain sources elected official, and did not claim Idaho as his tax home for within Idaho. federal income tax purposes. Ida. Code § 63-3013. The taxable income of non-residents and part-year residents to the extent it Military personnel -- Not The term "part-year resident" is defined as an individual is attributable to certain specified subject to tax on active duty who has changed his domicile either to or from Idaho and activities within Idaho. Ida. Code § compensation for services who has resided in Idaho for over a day. Ida. Code § 63- 63-3026A. performed outside of the state. 3013A . Not subject to tax on active duty The term "non-resident" is defined as any individual who is compensation for services performed not a resident or part-year resident. Ida. Code § 63-3014. outside of the state, Ida. Code § 63- 3022(h), or retirement benefits, Ida. See Soldiers' and Sailors' Civil Relief Act. Code § 63-3022A(4). CRS-28 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Illinois Residents, part-year residents -- The term "resident" is The entire federal adjusted gross Residents -- Subject to tax on defined as any individual who is in the state for other than income of residents, with certain federal adjusted gross income a temporary or transitory purpose during the taxable year or modifications not herein relevant. (above the exclusions under who is domiciled in the state, but is absent from the state for Since Illinois computes its own base §§ 911-912 of the IRC). a temporary or transitory purpose during the taxable year. income from federal adjusted gross 35 ILCS § 5/1501(20). income, the exclusions under §§ 911- Non-residents and part year 912 of the IRC for income from residents -- Subject to tax on The term "part-year resident" is defined as an individual sources without the United States are all income attributable to who became a resident during the taxable year or ceased to apparently adopted into the certain activities within be a resident during the taxable year. 35 ILCS § 5/1501 computation of Illinois base income. Illinois. (17). 35 ILCS § 5/203. Military personnel -- Illinois The term "non-resident" is defined as a person who is not All income of part-year residents and deducts from gross income a resident. 35 ILCS § 5/1501 (14). non-residents attributable to certain any compensation paid to a activities within Illinois. 35 ILCS §§ resident who is a member of See Soldiers' and Sailors' Civil Relief Act. 5/301, 304. the armed forces while on active duty. Illinois deducts from gross income any compensation paid to a resident who is Military retirees are not taxed a member of the armed forces of the on retirement or disability United States while on active duty. 35 income. ILCS § 5/203(a)(2)(E). Compensation received by any resident under any governmental retirement or disability plan is also deducted from gross income. 35 ILCS § 5/203(a)(2)(F). CRS-29 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Kansas Resident individuals and non-residents -- A"resident (1) The taxable income of a resident Residents -- Subject to tax on individual" is defined as a natural person who is domiciled individual defined as such individual's federal adjusted gross income in the state. A natural person who spends in the aggregate federal adjusted gross income for the above the exclusions under §§ more than six months of the taxable year within the state is taxable year, with certain 911-912 of the IRC. presumed to be a resident. Kan. Stat. Ann. § 79-32, 109(b). modifications not herein relevant. Kan. Stat. Ann. § 79-32, 110. Non-residents -- Subject to tax The term "non-resident" is defined as an individual other on that portion of federal than a resident individual. Kan. Stat. Ann. § 79-32, 109(b). (2) The taxable income of non-resident adjusted gross income derived individuals defined as that portion of from sources within Kansas. The Kansas tax regulations state that voting is prima facie federal adjusted gross income derived evidence of domicile in Kansas. Kan. Tax Reg. 92-12-4. from sources within Kansas. Kan. Military personnel -- Subject Stat. Ann. § 79-32, 110. to tax on military See Soldiers' and Sailors' Civil Relief Act. compensation with stated Since Kansas computes its own taxable exclusions. income from federal adjusted gross income, the exclusions under §§ 911- 912 of the IRC for income from sources with the United States and the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service are apparently adopted into the computation of Kansas taxable income. CRS-30 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Kentucky Residents and non-residents -- The term "resident" is (1) The entire net income of every Residents -- Subject to tax on defined as an individual domiciled within the state or an resident individual defined as such federal adjusted gross income individual who is not domiciled in the state, but maintains individual's federal adjusted gross (above the exclusions under a place of abode in the state and spends in the aggregate income with certain modifications not §§ 911-912 of the IRC). more than 183 days of the taxable year within the state. Ky. herein relevant. Ky. Rev. Stat. § Rev. Stat.§ 141.010(17). 141.020(1). Non-residents -- Subject to tax on federal adjusted gross The term "non-resident" is defined as any individual who is (2) That portion of federal adjusted income derived from sources not a resident of the state. Ky. Rev. Stat. § 141.010(18). gross income of non-residents derived within Kentucky. The Kentucky tax regulations specify that an individual from sources within Kentucky. Ky. who is permitted to file a federal income tax return as a Rev. Stat. § 141.020(4). Military personnel -- Subject non-resident citizen, and who immediately prior to residing to tax on military in a foreign country was domiciled in Kentucky, is Since Kentucky computes its own compensation with stated considered a Kentucky resident and must file a resident taxable income from federal adjusted exclusions. individual income tax return. Ky. Tax Reg. 103 KAR gross income, the exclusions under §§ 17:010. See also, the following two opinions of the 911-912 of the IRC for income from Kentucky Attorney General relating to this subject: Op. sources without the United States and Atty. Gen. Ky. (July 12, 1939); Op. Atty. Gen. Ky. (May the exclusion under § 112 of the IRC 12, 1960). for compensation received for active service as a member of the armed See Soldiers' and Sailors' Civil Relief Act. forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service are apparently adopted into the computation of Kentucky taxable income. Ky. Rev. Stat. § 141.020. CRS-31 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Louisiana Residents and non-residents -- The term "resident" is The entire federal adjusted gross Residents -- Subject to tax on defined as every natural person domiciled in the state, and income of resident individuals, with federal adjusted gross income every other natural person who maintains a permanent place certain modifications not herein above the exclusions under §§ of abode within the state or who spends in the aggregate relevant. La. Rev. Stat.§ 47-293. 911-912 of the IRC. more than six months of the taxable year within the state. La. Rev. Stat. § 47-31. Since Louisiana computes its own Non-residents -- Subject to tax taxable income from federal adjusted on net income derived from The Louisiana Tax Regulations state that domicile is a gross income, the exclusions under §§ sources within Louisiana. factual determination of intent to remain in or return to 911-912 of the IRC for income from Louisiana. Examples in the Regulations indicate that an sources without the United States are Resident military personnel -- individual may spend large portions of his or her time apparently adopted into the Subject to tax on military outside of Louisiana without relinquishing domicile. La. computation of Louisiana taxable compensation except for Inc. Tax Regs. 31.2. income. La. Rev. Stat. § 47-293(6). pensions or annuities for personal injuries or sickness See Soldiers' and Sailors' Civil Relief Act. incurred in the armed forces. The net income of non-residents earned or derived from sources within Non-resident mi litary the state. La. Rev. Stat. §§ 47-241, personnel -- Subject to tax on and 47-293(7). non-military pay from sources within Louisiana. The gross income of military personnel does not include pensions or annuities for sickness incurred in the armed forces. La. Rev. Stat. § 47- 46(4). Military pay of non-resident servicemen stationed within Louisiana is not taxable by Louisiana. See Soldiers' and Sailors' Relief Act, supra. CRS-32 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Maryland Residents and non-residents -- The term "resident" is (1) The taxable net income of residents Residents -- Subject to tax on defined as any individual domiciled in the state on the last defined as federal adjusted gross federal adjusted gross income day of the taxable year, and every other individual who, for income with certain modifications not above the exclusions under §§ more than six months of the taxable year, maintains a place herein relevant. Since Maryland 911-912 of the IRC. of abode within the state, whether domiciled in the state or defines its taxable net income in terms not. Md. Tax & Rev. Code Ann. § 10-101(h). of federal adjusted gross income, the Non-residents -- Subject to tax exclusions under §§ 911-912 of the on the portion of federal The term "non-resident" means an individual who is not a IRC for income from sources without adjusted gross income derived resident. Md. Tax & Rev. Code Ann. § 10-101(g). the United States are apparently from sources within adopted into Maryland taxable income. Maryland. Evidence that a person has registered to vote in Maryland is Md. Tax & Rev. Code Ann. §§ 10-206, ordinarily persuasive evidence that such person is domiciled 10-401. Military personnel -- Subject in Maryland. Comptroller of the Treasury v. Lenderking, to tax on military 268 Md. 613, 303 A.2d 402 (1973); Roberts v. Lakin, 340 (2) The portion of a non-resident's compensation with stated Md. 147, 665 A.2d 1024 (1995). federal adjusted gross income derived exclusions. from sources within and without the See Soldiers' and Sailors' Civil Relief Act. state. Md. Tax & Rev. Code Ann. § 10-401. Since Maryland computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of Maryland taxable income. Md. Tax & Rev. Code Ann.§ 10-401 CRS-33 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Maryland Military residents may deduct the first (Continued) $15,000 of military pay attributable to military service outside the United States. This deduction is reduced dollar-for-dollar for each dollar earned over $15,000. Md. Tax & Rev. Code Ann.§ 10-207(p). Military retirees with federal adjusted gross income under $22,500 may deduct $2,500 from taxable income subject to certain conditions. Md. Tax & Rev. Code Ann. 10-207(q). CRS-34 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Michigan Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined as an individual domiciled in the state. "Domicile" defined as taxable income for federal federal adjusted gross income is defined as the place where a person has his true, fixed, income tax purposes. However, allocable to sources within and permanent home and principal establishment to which, Michigan generally taxes only income Michigan above the whenever absent therefrom, he intends to return, and allocable to certain activities and exclusions of §§ 911-912 of domicile continues until another permanent establishment sources within Michigan. Also, since the IRC. is established. If an individual lives in the state for at least Michigan defines its taxable income 183 days during the taxable year or more than ½ the days for federal income tax purposes, the Non-residents -- Subject to tax during the taxable year of less than 12 months, he is deemed exclusions for income earned without on taxable income allocable to a resident individual domiciled in the state. Mich. Comp. the United States under §§ 911-912 of sources within Michigan. L. Ann. § 206.18. the IRC would apply. Mich. Comp. L. Ann. §§ 206.30, 206.110. M i l i t a r y p e r s onnel -- Non-resident -- The term "non-resident" is defined as any Michigan does not tax military individual who is not a resident. Mich. Comp. L. Ann. § (2) The taxable income of non- compensation or retirement 206.14. residents to the extent allocable to income from service in the sources within Michigan. Mich. armed forces. See Soldiers' and Sailors' Civil Relief Act. Comp. L. Ann.§§ 206.51, 206.110. Michigan allows the deduction, to the extent included in federal adjusted gross income, of compensation, including retirement benefits, received for services in the armed forces of the United States. Mich. Comp. L. Ann.§ 206.30(e). CRS-35 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Minnesota Residents and non-residents -- The term "resident" is The gross income of residents defined Residents -- Subject to tax on defined as an individual domiciled in the state or any as federal adjusted gross income with federal adjusted gross income individual maintaining a place of abode within the state and certain modifications not herein above the exclusion under §§ who spends over half of the tax year in Minnesota. An relevant. Since Minnesota defines its 911-912 of the IRC. individual is not a resident for the period of time that the gross income in terms of federal individual is qualified under § 911(d)(1) of the IRC. Minn. adjusted gross income, the exclusions Non-residents -- Subject to tax Stat. § 290.01(7). under §§ 911-912 of the IRC for on federal adjusted gross income from sources without the income allocable to sources The Minnesota Tax Regulations state that voting in United States are apparently adopted within Minnesota. Minnesota is presumptive evidence of residence, but may into the computation of Minnesota be overcome by facts contrary to the presumption of gross income. Minn. Stat. §§ Military personnel -- Subject residence. Minn. Tax. Reg. 1.6001; 290.01(19) et seq. to tax on military compensation with stated See Soldiers' and Sailors' Civil Relief Act. The net income of non-residents exclusions. allocable to sources within Minnesota. Min. Stat. §§ 290.01(22)(2); 290.06(2c)(e). Since Minnesota computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into computation of Minnesota taxable income. Minn. Stat. § 290.01 CRS-36 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Missouri Residents and non-residents -- The term "resident" is The Missouri taxable income of Residents -- Subject to tax on defined as an individual who is domiciled in this state, residents calculated on the basis of Missouri taxable income, unless he (1) maintains no permanent place of abode in this federal adjusted gross income with which excludes income from state, (2) does maintain a permanent place of abode modifications. Since Missouri sources without the United elsewhere, and (3) spends in the aggregate not more than computes its taxable income from States in the same manner as thirty days of the taxable year in this state, or who is not federal adjusted gross income, the §§ 911-912 of the IRC. domiciled in this state, but maintains a permanent place of exclusions under §§ 911-912 of the abode in this state and spends the in the aggregate more IRC for income from sources without Non-residents -- Subject to tax than 183 days of the taxable year in this state. Mo. Stat. § the United States are apparently on income derived from 143.101. adopted into the computation of sources within Missouri. Missouri taxable income. Mo. Stat. § The term "non-resident" is defined as an individual who is 143.121. Military personnel -- Subject not a resident of this state. Mo. Stat. §. 143.101. to tax on payments for service The income of non-residents derived in the armed services with See Soldiers' and Sailors' Civil Relief Act. from sources within Missouri. Mo. stated exclusions. Stat. § 143.181(1). Since Missouri computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into computation of Missouri taxable income. Mo. Stat. § 143.121 CRS-37 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Nebraska Residents and non-residents -- The term "resident" is (1) The entire taxable income of Residents -- Subject to tax on defined as an individual who is domiciled in the state or residents defined as federal taxable federal adjusted gross income who maintains a permanent place of abode within the state income with certain modifications not above the exclusions under §§ and spends in the aggregate more than six months of the herein relevant. Neb. Rev. Stat. § 77- 911-912 of the IRC. taxable year within the state. Neb. Rev. Stat. § 77- 2716. Since Nebraska computes its tax 2714.01(7). base in terms of federal adjusted gross Non-residents -- Subject to tax income, the exclusions under §§ 911- on federal adjusted gross The term "non-resident" is defined as an individual who is 912 of the IRC are apparently adopted. income derived from sources not a resident of this state. Neb. Rev. Stat.§ 77-2714.01(4). within Nebraska. (2) The federal adjusted gross income See Soldiers' and Sailors' Civil Relief Act. of non-residents derived from sources Military personnel -- Subject within Nebraska. Neb. Rev. Stat. § 77- to tax on military 2733. compensation with stated exclusions. The federal exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is adopted specifically into the computation of Nebraska taxable income. Neb. Rev. Stat. § 77-27,123. CRS-38 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION New York Residents and non-residents -- The term "resident" is (1) The adjusted gross income of Residents -- Subject to tax on defined as: (1) an individual who is domiciled in the state residents is defined as federal adjusted federal adjusted gross income unless he maintains no permanent place of abode in the gr o s s i n c o me w i t h c e r t a i n above the exclusion under §§ state and spends not over 30 days of the taxable year within modifications not herein relevant. 911-912 of the IRC. the state, or he is present in a foreign country for at least Since New York defines its own 450 days of a 548 day period, and during such 548 day adjusted gross income in terms of Non-residents -- Subject to tax period he is not in the state for more than 90 days and does federal adjusted gross income, the on federal adjusted gross not maintain a permanent place of abode in the state where exclusions for income earned from income derived from sources his spouse or minor children are present for 90 days or sources without the United States are within New York. more, and other conditions, or (2) an individual who is not apparently adopted into the domiciled in the state, but maintains a permanent place of computation of New York adjusted Military personnel -- Subject abode within the state and spends in the aggregate more gross income. N.Y. Tax Law. § 612. to tax on military than 183 days of the taxable year within the state, unless compensation with stated such individual is in active service in the armed forces of (2) The federal adjusted gross income exclusions. the United States. N.Y. Tax Law § 605(b)(1). of non-residents derived from sources within New York. N.Y. Tax Law § The term "non-resident" is defined as an individual who is 631. not a resident. N.Y. Tax Law § 605(b)(2). Military compensation of one not See Soldiers' and Sailors' Civil Relief Act. domiciled in New York is not to be considered income derived from New York sources. N.Y. Tax Law § 631(e). Since New York computes its own taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of New York taxable CRS-39 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION North Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined as any natural person domiciled in the state and any defined in terms of federal taxable federal taxable income above Dakota other natural person who maintains a permanent place of income with certain modifications not the exclusions under §§ 911- abode within the State and spends in the aggregate more herein relevant. Since North Dakota 912 of the IRC. than seven months of the income year within the state. A defines its own taxable income in full-time active duty member of the armed forces assigned terms of federal taxable income, the Non-resident -- Subject to tax to a military installation in this state, or the spouse of such exclusions under §§ 911-912 of the on net income from sources a person, is not a resident simply by reason of voting in an IRC for income from sources without within North Dakota. election in the state. N.D. Code § 57-38-01(6). the United States are apparently adopted into the computation of North Military personnel -- Taxable See Soldiers' and Sailors' Civil Relief Act. Dakota taxable income. N.D. Code § income is reduced by: (a) any 57-38-01.2. amount up to $1,000, received by any person as payment for Taxable income is reduced by: (a) an services performed while on amount up to $1,000, received as active duty in the armed forces payment for services performed while of the United States, or as on active duty in the armed forces of payment for attending military the United States, as payment for meetings as a member of the attending military meetings as a National Guard, or of a member of the National Guard, or of a reserve unit; and (b) any reserve unit; and (b) any amount up to amount up to $5,000 received $5,000 received by any person fifty by any person fifty years or years or older as retired military pay older as retired military pay for service in the United States armed for service in the United States forces or reserve components thereof, armed forces or reserve reduced by any amount received components thereof, reduced pursuant to the Federal Social Security by any amount received Act. N.D. Code § 57-38-01.2(l). pursuant to the Federal Social Security Act. The net income of non-residents derived from sources within North Dakota. N.D. Code § 57-38-03. CRS-40 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION North Dakota Also, persons serving in the armed Also, persons serving in the (Continued) forces, except field grade and general armed forces, except field officers who are stationed outside of grade and general officers, any state or the District of Columbia who are stationed outside of for not less than thirty days during the any state or the District of tax year, shall be allowed an additional Columbia for not less than reduction of up to $300 per month for thirty days during the taxable services performed while on active year, shall be allowed an duty at such location. N.D. Code § 57- additional reduction of up to 38-01.2(1)(k);. $300 per month for services performed while on active duty at each location. Ohio Residents and non-residents -- The term "resident" is The adjusted gross income of residents Residents -- Subject to tax on defined as an individual who is domiciled in this state. defined as federal adjusted gross federal adjusted gross income Ohio Code tit. 57 § 5747.01(I). One is presumed domiciled income with certain modifications not above the exclusions under §§ in the state if one spent over 183 nights in the state during herein relevant. Since Ohio defines its 911-912 of the IRC. 12 consecutive months. One is presumed not domiciled if own adjusted gross income in terms of one spent less than 120 nights in the state during 12 federal adjusted gross income, the Non-residents -- Subject to tax consecutive months.. Ohio Code tit. 57 § 5747.24. exclusions under §§ 911-912 of the on adjusted gross income IRC for income from sources without derived from sources within The term "non-resident" is defined as an individual who is the United States are apparently Ohio. not a resident. Ohio Code tit. 57 § 5747.01(J). adopted into the computation of Ohio adjusted gross income. Ohio Code tit. Military personnel -- Subject See Soldiers' and Sailors' Civil Relief Act. 57 § 5747.01(A). to tax on military compensation with stated exclusions. CRS-41 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Ohio The adjusted gross income on non- (Continued) residents derived from sources within Ohio. Ohio Code tit. 57 § 5747.01. The federal exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is adopted specifically into the computation of Ohio taxable income. Ohio Code tit. 57 § 5747.02.4. Oklahoma Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined as any individual who is domiciled in the state. defined on the basis of federal adjusted taxable income above the Any individual who spends in the aggregate more than gr o s s i n c o me w i t h c e r t a i n exclusions under §§ 911-912 seven months of the taxable year within the state shall be modifications not herein relevant. of the IRC. presumed a resident. Okla. Stat. tit. 68 § 2353(4). Since Oklahoma bases its taxable income on federal adjusted gross Non-residents -- Subject to tax income, the exclusions under §§ 911- on taxable income derived 912 of the IRC for income from from sources within sources without the United States are Oklahoma. apparently adopted into the computation of Oklahoma taxable Military personnel -- Subject income. Okla. Stat. tit. 68 §§ 2353(3), to tax on military 2355. compensation above the first $1,500. CRS-42 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Oklahoma The term "non-resident individual" is defined as an (2) The federal adjusted gross income (Continued) individual, other than a resident individual with special of non-residents derived from sources provisions for foreign earned income. Okla. Stat. tit. 68 § within Oklahoma. Okla. Stat. tit. 68 § 2353(4). 2362. See Soldiers' and Sailors' Civil Relief Act. (3) In any taxable year the first $1,500 received by any person from the United States as salary or compensation in any form (other than a pension) as a member of any component of the armed forces of the United States shall be deducted from taxable income. Okla. Stat. tit. 68 § 2358(D)(5). CRS-43 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION R h o d e Residents and non-residents -- The term "resident" is (1) The Rhode Island income of Residents -- Subject to tax on defined to include both (1) domiciliaries, and (2) non- residents is defined as federal adjusted taxable income above the Island domiciliaries who maintain a permanent place of abode gr o s s i n c o me w i t h c e r t a i n exclusions under §§ 911-912 within the state and reside in the state for more than 183 modifications not herein relevant. of the IRC. days of the taxable year other than as a member of the Since Rhode Island defines its own armed forces of the United States. R.I. Gen. Laws § 44-30- taxable income in terms of federal Non-residents -- Subject to tax 5(a). adjusted gross income, the exclusions on taxable income derived under §§ 911-912 of the IRC are from sources within Rhode The term non-resident is defined as an individual who is apparently adopted into the Island. not a resident. R.I. Gen. Laws § 44-30-5(b). computation of Rhode Island taxable income. R.I. Gen. Laws § 44-30- Military personnel -- Subject See Soldiers' and Sailors' Civil Relief Act. 12(a). to tax on military compensation with stated (2) The taxable income on non- exclusions. residents derived from sources within Rhode Island. R.I. Gen. Laws § 44- 30-32(a). Since Rhode Island computes its own taxable income from federal adjusted gross income, the exclusions under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of Rhode Island taxable income. R.I. Gen. Laws § 44-30-12. CRS-44 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION South Resident and non-resident -- The term "resident" means Resident - the entire taxable income on Residents -- Subject to tax on any individual who is domiciled in the state. The term the basis of federal adjusted gross taxable income above the Carolina "non-resident" means an individual other than a resident or income with certain modifications, exclusion under § 911 of the part year resident. S.C. Code § 12-6-30(2). S.C. Code § 12-6-560. No exclusion IRC. under § 912 is allowed. S.C. Code § 12-6-1120(5). Non-resident - subject Non-residents -- Subject to tax to tax on property owned or business on taxable income derived carried on in South Carolina. S.C. from sources within South Code § 12-6-1720. Carolina. Retirees may deduct up to $3,000 of Military personnel -- Subject retirement income that is taxable by to tax on military South Carolina or irrevocably choose compensation with stated to defer annual retirement income exclusions. deduction until the year the taxpayer reaches sixty-five years of age. S.C. Code § 12-6-1170(1). Since South Carolina computes its own taxable income from federal adjusted gross income, the exclusions under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of South Carolina taxable income. S.C. Code § 12-6-560. CRS-45 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Utah Residents and non-residents -- The term "resident" is (1) The taxable income of residents is Residents -- Subject to tax on defined to include domiciliaries, and individuals not defined in terms of federal taxable taxable income above the domiciled in the state and residing within the state in the income with certain modifications not exclusions under §§ 911-912 aggregate for over 183 days of the taxable year. Utah Code herein relevant. Since Utah defines its of the IRC. § 59-10-103(j). own taxable income in terms of federal taxable income, the exclusions under Non-residents -- Subject to tax The term non-resident is defined as an individual who is §§ 911-912 of the IRC for income on taxable income derived not a resident of the state. Utah Code § 59-10-103(g). from sources without the United States from sources within Utah. are apparently adopted into Utah See Soldiers' and Sailors' Civil Relief Act. taxable income. Utah Code §§ 59-10- Military personnel -- Subject 104 & 112. to tax on military pay with stated exclusions. Since Utah computes its own taxable income from federal taxable income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into the computation of Utah taxable income. Utah Code §§ 59-10- 104 & 116. CRS-46 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Vermont Residents -- The term "resident" is defined to include both (1) The adjusted gross income of Residents -- Subject to tax on (1) domiciliaries, and (2) non-domiciliaries who maintain residents is defined as federal adjusted federal adjusted gross income a permanent place of abode within the state and reside gross income. Since Vermont defines above the exclusions under §§ within the state for more than 183 days of the taxable year. its adjusted gross income in terms of 911-912 of the IRC. Vt. Stat. tit. 32 § 5811(11)(A)(i), (ii). federal adjusted gross income, the exclusions under §§ 911-912 of the Non-residents -- Subject to tax Non-resident -- anyone not a resident. Vt. Stat. tit. 32 § IRC for income from sources without on federal adjusted gross 5811(9). the United States are apparently income derived from sources adopted into the computation of within Vermont. See Soldiers' and Sailors' Civil Relief Act. Vermont adjusted gross income. Vt. Stat. tit. 32, §§ 5811(1), 5822, 5823. Military personnel -- Not subject to tax on military pay for full-time active duty service performed outside of the state. (2) The adjusted gross income of non- residents derived from sources within Vermont. Vt. Stat. tit. 32, § 5823. (3) Adjusted gross income does not include military pay for full-time active duty with the armed services outside of the state. Vt. Stat. tit. 32 § 5823(a)(2). CRS-47 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Virginia Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined as an individual domiciled in the Commonwealth defined in terms of federal adjusted federal adjusted gross income and a person who maintains an abode in the state for more gr o s s i n c o me w i t h c e r t a i n above the exclusion under §§ than 183 days of the taxable year. Va. Code § 58.1-302. modifications not herein relevant. 911-912 of the IRC. Since Virginia defines its taxable Persons in the armed forces of the United States stationed income in terms of federal adjusted Non-residents -- Subject to tax on military or naval reservations within Virginia who are gross income, the exclusion under §§ on taxable income derived not domiciled in Virginia and who maintain no place of 911-912 of the IRC are apparently from sources within the state. abode in Virginia shall not be held liable to income taxation adopted into the computation of for compensation received from military or naval service. Virginia taxable income. The first Military personnel -- Subject Va. Code § 58.1-321(B). $15,000 of military pay is excluded to tax on military pay with from income, with a dollar for dollar stated exclusions. reduction in the exclusion for income over $15,000. Va. Code § 58-1-322. (2) The taxable income of non- residents derived from sources within the state. Va. Code § 58-1-325. The federal exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is specifically adopted into the computation of Virginia taxable income. Va. Code § 58-1-322. Virginia grants a tax credit for taxes paid to a foreign country on retirement income. Va. Code § 58-1-332.1. CRS-48 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION West Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined to include: (1) domiciliaries, unless they maintain defined in terms of federal adjusted taxable income above the Virginia no permanent place of abode within the state, maintain a gross income with modifications not exclusions under 911-912 of permanent place of abode outside the state, and spend not herein relevant. Since West Virginia the IRC. more than 30 days of the taxable year in the state, and (2) defines its own taxable income in non-domiciliaries who maintain a permanent place of abode terms of federal adjusted gross income, Non-residents -- Subject to tax within the state and reside within the state for more than the exclusions under §§ 911-912 of the on taxable income derived 183 days of the taxable year. W. Va. Code § 11-21-7(a). IRC for income from sources outside from sources within West the United States are apparently Virginia. "Non-resident" is defined to mean an individual who is not incorporated into the definition of a resident. W. Va. Code § 11-21-7(b). West Virginia taxable income. W. Va. Military personnel -- Subject Code §§ 11-21-11(a), 12. to tax on such compensation See Soldiers' and Sailors' Civil Relief Act. with stated exclusions. (2) The taxable income of non- residents derived from sources within West Virginia. W. Va. Code §§ 11-21- 30, 32. Since West Virginia computes its own taxable income from federal adjusted gross income, the exclusion under Section § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into computation of West Virginia taxable income. W. Va. Code § 11-21-11 CRS-49 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Wisconsin Residents and non-residents -- The term "resident" is (1) The taxable income of residents Residents -- Subject to tax on defined as a domiciliary. Wis. Stat. § 71.02(1). defined in terms of federal adjusted taxable income above the gr o s s i n c o me w i t h c e r t a i n exclusions under §§ 911-912 See Soldiers' and Sailors' Civil Relief Act. modifications not herein relevant. of the IRC. Since Wisconsin defines its own taxable income in terms of federal Non-residents -- Subject to tax adjusted gross income, the exclusions on taxable income derived under §§ 911-912 of the IRC for from sources within income from sources without the Wisconsin. United States are apparently adopted into the computation of Wisconsin Military personnel -- Subject taxable income. Wis. Stat. §§ to tax on military 71.01(13) & 71.05. compensation with stated exemption. (2) The taxable income of non- residents derived from sources within Wisconsin. Wis. Stat. §§ 71.01 & 71.02. Non-residents domiciled without Wisconsin who derive income from performing personal services within Wisconsin shall be excluded from having to pay Wisconsin tax to the extent that the home domicile taxes the income. Wis. Stat. § 71.05(2). CRS-50 PROBABLE TAX STATE INCOME TAX COVERAGE TAX BASE OBLIGATION Wisconsin Since Wisconsin computes its own (Continued) taxable income from federal adjusted gross income, the exclusion under § 112 of the IRC for compensation received for active service as a member of the armed forces of the United States for any month during which such member served in a combat zone or was hospitalized as a result of an injury incurred in such service is apparently adopted into computation of Wisconsin taxable income. Wis. Stat. § 71.05. IV. States Having No Income Tax STATES: Alaska Florida Nevada South Dakota Texas Washington Wyoming ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-95-895