Easiest no-tax state

[DD214_DOC]

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Which of the no-income tax states is the least bothersome to obtain legal residence in? I presume I have to be physically present in some capacity for any of them to at least obtain a driver's license. I was considering Texas since I wouldn't mind settling down there at some point anyway.

I assume I am required to have actually established residency in a state prior to changing it with HRD?

 

[colbgw02]

Which of the no-income tax states is the least bothersome to obtain legal residence in? I presume I have to be physically present in some capacity for any of them to at least obtain a driver's license. I was considering Texas since I wouldn't mind settling down there at some point anyway.

I assume I am required to have actually established residency in a state prior to changing it with HRD?

A driver's license does not state residency make. It's part of the equation, but that alone won't save you if a state's department of revenue comes after you.

Regarding the personnel office, they shouldn't be in the business of requiring proof from you for your state of residency. For active duty military, state of residency is tantamount to a declaration of intent, to wit, that you intend to return to that state upon completion of your time in uniform. If they do give you a hard time, just go to JAG and have them draft a last will and testament to be executed in your chosen state.

In the meantime, you'll want to protect yourself by doing other things that demonstrate your intent. Getting a driver's license is a start, but other things include registering your vehicles, registering to vote (probably the single most important thing), drafting a will accordingly (as above), having an address and/or owning probably in the state, getting a state medical license, etc. The degree to which you'll be able to accomplish these things from out-of-state or without an in-state address will largely depend on the particular state.

 

[drcarter77]

So to go along with this, I'm currently a resident of DC for medical school since you are required to change legal residence and get their license regardless of intent to move or whatever. My family lives in Pennsylvania, which is where I will like return, and where I at least originally had the Navy recognize as my home of record.

I'm starting residency at Walter reed , in Bethesda , MD, in June and am trying to figure out what I need to do to legally be in Pennsylvania and not be paying the rediculous Maryland state income taxes.

 

[denali]

So to go along with this, I'm currently a resident of DC for medical school since you are required to change legal residence and get their license regardless of intent to move or whatever. My family lives in Pennsylvania, which is where I will like return, and where I at least originally had the Navy recognize as my home of record.

I'm starting residency at Walter reed , in Bethesda , MD, in June and am trying to figure out what I need to do to legally be in Pennsylvania and not be paying the rediculous Maryland state income taxes.

If the Navy recognizes your HOR as Pennsylvania, they will not withhold MD state income taxes from your pay, and you can verify that on your LES.

IMHO, the most important thing is verifying that the Navy is clear from the get-go what your HOR is, and correcting it if necessary. Get this settled when you inprocess at Bethesda in June.Then just do the things mentioned above to present a consistent picture with documentation to support your claim to your HOR. If asked to show proof, I can show my high school diploma, driver's license, voter registration card, and my will. I haven't lived in my HOR state in over 13 years & I've never had any problems.

The state of your medical license isn't as important because of MHS requirements and varying state license requirements (e.g. I'm not licensed in my HOR state because it requires 2 PGY years and the Army insisted I get my license earlier and I don't feel the need to have multiple licenses right now). But, if you do get licensed in Pennsylvania, it's yet another piece of supporting evidence.

 

[colbgw02]

Terminology check:

Home of record: a military term that indicates nothing more than the state from which you entered active duty. For officers, it is essentially impossible to have this changed. It is important largely because it serves as the cost baseline that the military will use to decide how far to move you when retiring/ETSing without incurring out-of-pocket expense.

Residency (AKA domicile): a legal concept that establishes your principle home. For the military, as mentioned above, it represents a declaration of intent that you will return to that state after finishing your time in uniform. It can change as frequently as you want it to, providing that you can demonstrate your intent, usually by having one or more of the supporting documents listed above.

HOR and domicile are often the same, particularly early on, but they don't have to stay that way. Also, if they've been withholding taxes to PA, then they won't change that just because you've moved. If they're withholding taxes from Maryland, then it ought to be easy to have it changed once on active duty, keeping in mind that - with finance offices - easy is a relevant term.

 

[denali]

colbgw02, thanks for the clarification; it appears I used HOR too loosely.

FWIW, here's the official DoD form with a similar explanation.

DD Form 2058 pdf

 

[Cooperd0g]

Florida, Texas, and Nevada are all pretty easy. I have been a resident of FL in the past and am currently a resident of NV. I only switched to NV because I probably will end up back there.

For tax purposes you just tell the military, but for legit purposes you need to at least be physically in the state and register to vote, get a license, and register your vehicles. To do the last two you need an address of some kind.

 

[Mirror Form]

It seems to me that almost half of the military declares Texas as their domicile for tax purposes whether they've ever lived there or not. I've personally never heard of anyone having a state dept of revenue come after them. Has anybody actually heard of this happening? How would they even get the case started?

 

[Ziehl-Neelsen]

It seems to me that almost half of the military declares Texas as their domicile for tax purposes whether they've ever lived there or not. I've personally never heard of anyone having a state dept of revenue come after them. Has anybody actually heard of this happening? How would they even get the case started?

I know some who have switched their state of residency to Alaska after having been stationed there in order to partake of the APF dividend.

I had the Missouri Dept. of Revenue come after me regarding state taxes. Long story short: I went to medical school in Missouri and swiched my state of residence there to get away from California's state taxes. I paid my MO state taxes while I lived there and when I inprocessed at WRAMC I switched my state of residence to my new bride's state (Texas). A year ago MO came after me for 2007 MO state taxes. I had previously received a refund for MO state income tax because I made below the state income cutoff while a medical student. They detected a large spike in my 2007 annual income that coincided with starting residency and I had to furnish documents attesting to my switch in order to have the calim dismissed.

 

[Cooperd0g]

It seems to me that almost half of the military declares Texas as their domicile for tax purposes whether they've ever lived there or not. I've personally never heard of anyone having a state dept of revenue come after them. Has anybody actually heard of this happening? How would they even get the case started?

California will go after you. If you are married, and before the law changed allowing your spouse to remain a resident of another state, Cali would go after your income too. If you registered a vehicle there or bought a home, they would try to go after your income.

 

[MTGas2B]

Washington. No income tax. All mail in voting. Easy out of state DMV, use tax exemption on purchased vehicle registration if you're stationed out of state. Free renewals for medical licenses (unrestricted, meaning you can moonlight with it I WA and it can be your only license), note two years GME required, and you have to pay for the initial issue. You can get stationed here and once your spouse obtains residency keep it with the 2008 service members relief act.

 

[jabreal00]

I am from Maryland. I did my residency in San Antonio. I set up my home of record for Texas when I inprocessed. I registered my car in Texas. My car insurance was Texas. However, I kept my Maryland driver's license. My LES and W2 reflects that I am a Texas resident. I have not had any problems in the 8 years I've been in the military. This includes three PCS moves. I am currently in the South East with my Md driver's license and my Tx car registration.

So basically the most important thing is to set up your home of record on in-processing with finance. The perks of being active duty is that you don't have to bother re-registering your car or changing your driver's license with every PCS move.