Maritime Tax Law - Crewmember

[Johnboise1]

I am in Idaho.

For almost 13 years I was a crewmember onboard a cruise ship. At one time Idaho was my residence but after I got divorced, I rented out my properties and went back to sea. My parents lived in Idaho but I had no intention of returning to Idaho.

The State of Idaho is coming after me for $20K in back taxes saying that although I was NOT a resident, I was still "domiciled" here and I owe the taxes.

I have a couple of questions.
1. How was I to know I had to change my "domicile"?

2. The State says I should have changed my domicile. In order to do so, I needed to buy property, get a library card or drivers lic. from another state. How was I suppposed to do that if I did not live in another state nor have any interest in doing so.

3. Has anyone heard of this kind of case. I basically was homeless (Although living on a cruise ship that travelled the world) for several years with no ties anywhere. I used my parents address as a mailing address. Had a bank account in Alaska, worked in International waters and was paid out of a company from Seattle. My money never entered this state. Not to mention, neither did I except for a visit from time to time.

4. I did have my drivers lic. here with my parents address. I do not think I should be paying $20K for a drivers Lic. How else was I supposed to drive?

If anyone can offer any help or suggestions, it would be greatly appreciated. I know taking on the State Govt. is most likely futile but I am hoping there is someone that deals in Maritme law that can give me some insight.

Thanks so much.

 

[HappyWanderer]

1. You didn't have to do anything. But, if you wanted to know your tax responsibilities, you should have spoken to a tax professional or study the law on the matter.

2. Domicile is a facts and circumstances test. Everyone must have one. You could have done some of those mentioned acts to show you intended on living somewhere else and not return to Idaho.

3. Yes. All the time. From what you've written, they're probably going to win. Your facts and circumstances seem to say you have government documents listing an Idaho address and you own property in the state. While neither would be conclusive, it does seem like you live there under the domicile rules. If you had done some acts in an attempt to establish your domicile in another state, like Nevada, it would have been a closer call.

4. Get a driver's license from the state of your domicile.

You have a problem unless you can come up with a good amount of evidence you did acts showing you were domiciled in another state. Voting registration, vehicle registration, where all your clothes and other possessions are stored are other facts or circumstances which might tend to show that. One example is former President Bush (the first one). He had a large mansion in Kennebunkport Maine (sp?). That's where he spent all his down time and was where he lived. However, he kept a hotel room in Texas and stayed registered to vote there and said he always had the intention to return. Do you know why?

Texas doesn't have an income tax.

 

[LdiJ]

1. You didn't have to do anything. But, if you wanted to know your tax responsibilities, you should have spoken to a tax professional or study the law on the matter.

2. Domicile is a facts and circumstances test. Everyone must have one. You could have done some of those mentioned acts to show you intended on living somewhere else and not return to Idaho.

3. Yes. All the time. From what you've written, they're probably going to win. Your facts and circumstances seem to say you have government documents listing an Idaho address and you own property in the state. While neither would be conclusive, it does seem like you live there under the domicile rules. If you had done some acts in an attempt to establish your domicile in another state, like Nevada, it would have been a closer call.

4. Get a driver's license from the state of your domicile.

You have a problem unless you can come up with a good amount of evidence you did acts showing you were domiciled in another state. Voting registration, vehicle registration, where all your clothes and other possessions are stored are other facts or circumstances which might tend to show that. One example is former President Bush (the first one). He had a large mansion in Kennebunkport Maine (sp?). That's where he spent all his down time and was where he lived. However, he kept a hotel room in Texas and stayed registered to vote there and said he always had the intention to return. Do you know why?

Texas doesn't have an income tax.

I am going to disagree with you slightly. Its possible for someone to NOT have any state of residence, and therefore not be obligated to file a tax return in any state. Expats are an example of that, and there are other instances as well although they are more obscure.

However, I suspect that the OP still has an Idaho driver's license, is registered to vote in Idaho, had an Idaho mailing address and possibly had Idaho withholding from his paycheck. Obviously the OP still has property in Idaho and he rented out that property, therefore he had Idaho income, and would have been obligated to at least file a non-resident Idaho return for that income.

Idaho cannot claim that he remained an Idaho resident just because he didn't set himself up in another state. However, Idaho CAN claim that he remained an Idaho resident if he had an Idaho driver's license and was registered to vote there, etc.

 

[HappyWanderer]

We don't disagree at all.

Domicile is a facts and circumstances test. Everyone must have one.

This is true. Even an expat has a domicile somewhere, even though it is not in a state. We are all domiciled somewhere. I can't get rid of my voter registration, property and whatnot and wander the land hiking like Forrest Gump and not be domiciled in a state. I could do the first three of course, it's the last which would be problematical.

 

[FlyingRon]

...and there's the issue of the income from the rental properties too.

 

[HappyWanderer]

I think we all agree the guy has some filing requirement. I bet we pretty much agree (but, maybe not completely) that, with the facts he mentioned, he'll be a resident.

From a decision of the Idaho state tax commission:

The issue presented in this case is where was the taxpayers’ domicile for the years in
question. It is a fundamental rule of law that all persons have domicile somewhere. Taylor v.
Milam, 89 F. Supp. 880, 881 (W.D. Ark. 1950); ex parte Phillips, 275 Ala. 80, 82, 152 So.2d
144, 146 (1963). Equally, no person has more than one domicile at a time. Smith v. Smith, 45
Cal.2d 235, 288 P.2d 497, 499 (1955).
Domicile forms the constitutional basis for the imposition of state income taxes on an
individual. New York, ex rel. Cohn v. Graves, 300 U.S. 308, 313 (1937); Lawrence v. State Tax
Commission of Mississippi, 286 U.S. 276, 279 (1932). Domicile is defined in IDAPA
35.01.01.030 Income Tax Administrative Rules, as the place where an individual has his true,
fixed, permanent home and principal establishment, and to which place he has the intention of
returning whenever he is absent. The term domicile denotes a place where an individual has the
intention to remain permanently or for an indefinite time.
Domicile, once established, persists until a new domicile is legally acquired. In re
Cooke’s Estate, 96 Idaho 48, 59, 524 P.2d 176,187 (1973). A concurrence of three factors must
occur to change an individual’s domicile. The factors are (1) the intent to abandon the present
domicile, (2) the intent to acquire a new domicile, and (3) physical presence in the new domicile.
IDAPA 35.01.01.030.02.a Income Tax Administrative Rules. Domicile is evidenced by a
taxpayer’s action and declarations.