204 Domicile

Domicile is the country, state, county, and city that a person treats as their permanent home, or lives in and has a substantial connection with. For many of us, we will move several times during our lifetime changing the state or city that we live.

However to do it correctly, you must change your address. Arkansas recently had a couple of cases before the Arkansas Finance and Administration where the question of domicile came up.

The question of domicile will often come up when a taxpayer moves from a state with an income tax to a state without an income tax. With the Arkansas cases, one taxpayer moved from Arkansas to Texas and the other taxpayer moved out of the state. In both cases, the taxpayers used an Arkansas address of a finance or their parents which trigger a notice from the State when the State of Arkansas matched Federal tax returns with an Arkansas to Arkansas tax returns filed by Arkansas taxpayers. In the case of both taxpayers, they did not file a state of Arkansas income tax return.

How is state domicile determined?

States use different tests to test for domicile. These are some of residency / domicile test?

1. What address is used on the Federal Tax Return?
2. What address is used on driver’s license?
3. Where is the taxpayer registered to vote?
4. What address is used on hunting/fishing/other state licenses?
5. Where is the taxpayer’s bank account?
6. What address used for county/city real tax, personal tax, and other assessment records?
7. Where is the immediate family/relatives living?
8. Where is the employer located?
9. Where is the taxpayer tax withholding being held?
10. Address for utility, telephone, and commercial documents
11. Address for vehicle and trailer registration?
12. Address on government documents
12. Location of taxpayer
13. Other records

So, how does a taxpayer keep from being assessed for domicile issues.

A. Change your address on state, documents, bank, utility, financial, and other accounts.
B. Get a new driver’s license.
C. Update your voting records.
D. Use your correct address on the Federal and State returns

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