State income tax that is
A friend just reminded me about the lack of state income tax in Florida and that got me to thinking about the advantages of living and working in Florida for the winter and coming up north for the spring, summer, and fall.
Or maybe retire in Florida. If you are on Social Security be sure you can afford the move. But now hold your horses…it’s not that simple if you want to avoid paying a state income tax.
Oh and by the way Florida doesn’t have an estate tax as well but they do have a state sales tax so…
Some people say that they are residents of two states because they have homes in both states but that isn’t necessarily dual residency. The laws vary from state to state.
Apparently for some states you can be a legal permanent resident for only one state at a time. Of course you can only legally vote in federal elections in one state, etc.
New York has a law that says that even if you live in a hotel for a few weeks and work in the state you have to pay some state income taxes to New York. In Maine if you want a Maine drivers license you have to give up your out of state drivers license. All in all it is a very bad idea to have dual residency for some reasons. Inheritance and estate taxes could be assessed in two states that have have them although Florida has neither.
Too much foolishness. We need some standardized laws here. I think a national drivers license would help.
Home or domicile?
Your intention to live and consider your home a permanent residence establishes it as the domicile whereas a home can be anywhere that you live for months at a time but not your permanent place of residence. In legalese “Residence is a matter of intent.” So you have to prove your intent. You need to do it properly to get benefits of tax laws, voting, holding elected position, gaining educational benefits, etc.
Who would want to pay taxes in two states or in another state if they lived in a non state income state? In Florida you can establish a homestead and get a better tax advantage on that real estate tax.
How long to establish permanent residency
In Florida to register to vote, you only have to give a street address at the time of registration. That can happen as soon as you have an address there.
For a driver’s license, you must have resided in Florida for 30 days and provide proof of residency such as an envelope with your Florida address. You can get a “proof of domicile” form at the circuit court office in the county that you are now living in.
If you declare residency in Florida will have to show that your home is permanent. As such living in a motel with a daily rental isn’t much proof but owning a home or leasing for long periods such as a year at a time would be. Post office boxes are too small to live in but you can have one as long as you have an actual physical address. Register your car there.
Avoid paying taxes in the state you are leaving
You can change your will to reflect your residency in Florida.
Notify any businesses who pay you dividends and banks as well of your new address.
Notify the issuer of your passport that you have moved.
Have the PO forward your mail to the new address or local PO box. Technically changing your domicile to Florida, might not eliminate income taxes in your previous state.
New York is a pain in the butt. An example is that multiple states can attempt to tax you based on their idea of residence even if you consider Florida to be where your domicile is.
I figure that you have to cut all ties with the previous state in that case.
For myself, after careful consideration I would visit Florida during the winter but retain my health insurance and residence in Massachusetts because I have health issues and my health insurance in Massachusetts is much more affordable. I wouldn’t risk losing that deal.