Does Buying a House Change Your State Residency?

[pogo]

Hi All,
First time poster, long time lurker. I haven't been able to find a suitable answer online anywhere (including searching this forum) and I was hoping someone who's been in the same position could help me out.

I am currently stationed in Florida but will be PCSing to San Diego for my first fleet squadron tour. I am a Washington State resident. I wish to maintain my WA residency- however, I also wish to buy a house in San Diego. Does buying a house in California force me to become a California resident (and thus pay CA state taxes)? I would still have a WA driver's license, voters registration, vehicle titles and the intent to return to WA upon retirement.

Any help and/or advice would be appreciated. Thanks.

Pogo

 

[Brett327]

Hi All,
First time poster, long time lurker. I haven't been able to find a suitable answer online anywhere (including searching this forum) and I was hoping someone who's been in the same position could help me out.

I am currently stationed in Florida but will be PCSing to San Diego for my first fleet squadron tour. I am a Washington State resident. I wish to maintain my WA residency- however, I also wish to buy a house in San Diego. Does buying a house in California force me to become a California resident (and thus pay CA state taxes)? I would still have a WA driver's license, voters registration, vehicle titles and the intent to return to WA upon retirement.

Any help and/or advice would be appreciated. Thanks.

Pogo

Went through a surprisingly similar scenario myself. According to federal and CA state law, moving to or buying property in CA while you are on military orders is not sufficient for you to become a resident of CA for tax purposes. They will probably send you a nasty-gram (as they did me) saying that you need to pay your state taxes, but there's a box to check on the form that says "military non-resident" or words to that effect and you fill out the state (WA) of your legal, permanent residence. As far as CA is concerned (again, federal law), unless you plan on making CA your state of permanent residence after your military service, then you won't be considered a CA resident and won't have to pay taxes.

Brett

Edit: This should tell you everything you need to know

 

[helolumpy]

The three requirements for residency have always been:
Owning property
Register car
Register to vote.

You'll have to pay your property tax to CA, but that's it.
Under the soldiers and sailors relief act you can not be forced to pay income tax in the state you are stationed unless you become a resident of that state. (Also under the act is the rule that a state can not force a military member on active duty from becoming a resident of the state they are stationed in)

I would recommend keeping your car registered in a state other than CA, and make sure you are registered to vote in somewhere other than CA.

 

[Brett327]

The three requirements for residency have always been:
Owning property
Register car
Register to vote.

You'll have to pay your property tax to CA, but that's it.
Under the soldiers and sailors relief act you can not be forced to pay income tax in the state you are stationed unless you become a resident of that state. (Also under the act is the rule that a state can not force a military member on active duty from becoming a resident of the state they are stationed in)

I would recommend keeping your car registered in a state other than CA, and make sure you are registered to vote in somewhere other than CA.

Not necessary. I registered a vehicle and voted in CA. Neither of these things makes you a resident for tax purposes. It's all about where you're "domeciled." Read the linked document if you're interested in the legal minutiae.

Brett

 

[HAL Pilot]

CA has historically tried to tax any and everyone. They used to send notices to retired military who had ever been in the state saying they owed taxes.

For example, my Dad did 5 of 30 years at CA Army bases. When he retired, they claimed that owed taxes on 16.5% of his retired pay since that portion of his service was in CA. When he replied that he had been a Florida resident during his entire military career, CA claimed that was why he wasn't taxed during his service but since he was retired, those laws were no longer applicable. Start paying or be arrested for tax evasion. My Dad said here's my address in NV. If NV will agree to my extridition - come get me. Otherwise go away. That was the last he ever heard of it.

CA lost a bunch of lawsuits in federal court over these types of tax issues and knew their claims were unenforcable and illegal. Their thought was "we'll try". If the sucker pays - great. If he doesn't - we're out the price of a stamp. They did this for years banking on the uniformed just blindly paying before the feds finally made them to quit.

 

[HAL Pilot]

Not necessary. I registered a vehicle and voted in CA. Neither of these things makes you a resident for tax purposes. It's all about where you're "domeciled." Read the linked document if you're interested in the legal minutiae.

Brett

Concur. The only requirement is that you "plan" on returning to your claimed state of residency when you get out of the military. You can "plan" on anything - plans change.

 

[Jim123]

At least the City of Virginia Beach is halfway nice about it and makes it easy to claim your exemption.

1- active duty military/non VA resident stationed in VA registers a car in VA
2- City of VB culls the VA DMV database for VB addresses... dum dee dum dee dum... ah-HA!
3- City of VB sends tax notice to said vehicle owner, but in the fine print there are instructions for active duty military members to claim their exemption (basically provide a copy of your LES)


Yes, Virginia Beach taxes people for owning a car... silly me thought that was the State's, er, "Commonwealth's" place.

 

[ChunksJR]

Yes, Virginia Beach taxes people for owning a car... silly me thought that was the State's, er, "Commonwealth's" place.

Norfolk does as well.

Important note for all those with MITs (manatees in training/spouses)...IF you buy a car in VA AND don't register it SOLELY in your name, you CANNOT take the military car tax exemptions of "the 7 cities."

 

[Spekkio]

CA has historically tried to tax any and everyone. They used to send notices to retired military who had ever been in the state saying they owed taxes.

For example, my Dad did 5 of 30 years at CA Army bases. When he retired, they claimed that owed taxes on 16.5% of his retired pay since that portion of his service was in CA. When he replied that he had been a Florida resident during his entire military career, CA claimed that was why he wasn't taxed during his service but since he was retired, those laws were no longer applicable. Start paying or be arrested for tax evasion. My Dad said here's my address in NV. If NV will agree to my extridition - come get me. Otherwise go away. That was the last he ever heard of it.

CA lost a bunch of lawsuits in federal court over these types of tax issues and knew their claims were unenforcable and illegal. Their thought was "we'll try". If the sucker pays - great. If he doesn't - we're out the price of a stamp. They did this for years banking on the uniformed just blindly paying before the feds finally made them to quit.

You would think that they wouldn't want to mess with retired guys who would generally have plenty of time on their hands to pursue a federal lawsuit.

 

[Uncle Fester]

I owned a house in Norfolk, had a VA driver's license and registered my cars in VA, but have always been a FL resident.

 

[pogo]

Thanks

All,
Thanks for the help- Brett especially. Your link was very helpful and should be a good reference for others in the same situation.

Pogo

 

[OldNavy]

I owned a house in Norfolk, had a VA driver's license and registered my cars in VA, but have always been a FL resident.

Same here. 15 years at NOB. The day I retired I split for Florida