State income tax while living overseas

[Nowisee]

I'm retired and do not hold any possessions in the US and I do not live in the US.

My drivers license is from one state and I am using Washington state as my "mailing" address.

Washington state just happens to not have state income tax.

I want to use Arizona as my "home" "mailing" address.

Am I burdened with paying Arizona state income tax simply for using it as my mailing address?

[beachproperty]

If you are not a "resident" of any State AND hold no property there (ie no income generated within the state) then NO state taxes are due. "Residency" is determined by "living" there. A mailing address is not enough to establish residency of ANY state. BUT if you have Social Security or Dividend income you are still liable to pay Federal Tax and you must file each year a FBAR form stating monies held overseas

A useful site is

http://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/

[Nowisee]

Yep, I pay federal taxes.

Ok, that answers my question.

No income generated.

I believe when filing taxes you put the amount of time you actually spent in the state. I can deal with that as it's only going to be a short period of time. Even then they may determine that it doesn't constitute paying taxes.

OK, thank you very much.

[CaptHaddock]

The response below is a "common sense" answer that is drastically wrong. Each state has its own tax domicile rules which you must know if you are to avoid a tax domicile audit from a state that you have "left." The worst state, VA, takes the position that, having lived in VA, you continue to be a VA resident and liable for state income tax until such time as you establish residence in another state. CA is also very aggressive and, like some other states, looks at evidence of an "intent to return" which can establish tax domicile. Some factors that CA considers are the usual ones, such as, owning property, having a driver's license, registering to vote, but they go so far as to include using professional services in the state and, even, having friends there! Having a mailing address alone in a state with an income tax is certainly enough to trigger a tax domicile audit, which is a headache even if you can avoid liability for taxes in the end.

My advice to the OP is to surrender his driving license (getting a receipt for it), get a mailing address in a state without an income tax, and read up on the tax domicile regulations in AZ and WA and make sure that he avoids qualifying in any way.

If you are not a "resident" of any State AND hold no property there (ie no income generated within the state) then NO state taxes are due. "Residency" is determined by "living" there. A mailing address is not enough to establish residency of ANY state. BUT if you have Social Security or Dividend income you are still liable to pay Federal Tax and you must file each year a FBAR form stating monies held overseas

A useful site is

http://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/

[beachproperty]

The response below is a "common sense" answer that is drastically wrong. Each state has its own tax domicile rules which you must know if you are to avoid a tax domicile audit from a state that you have "left." The worst state, VA, takes the position that, having lived in VA, you continue to be a VA resident and liable for state income tax until such time as you establish residence in another state. CA is also very aggressive and, like some other states, looks at evidence of an "intent to return" which can establish tax domicile. Some factors that CA considers are the usual ones, such as, owning property, having a driver's license, registering to vote, but they go so far as to include using professional services in the state and, even, having friends there! Having a mailing address alone in a state with an income tax is certainly enough to trigger a tax domicile audit, which is a headache even if you can avoid liability for taxes in the end.

My advice to the OP is to surrender his driving license (getting a receipt for it), get a mailing address in a state without an income tax, and read up on the tax domicile regulations in AZ and WA and make sure that he avoids qualifying in any way.

If you are not a "resident" of any State AND hold no property there (ie no income generated within the state) then NO state taxes are due. "Residency" is determined by "living" there. A mailing address is not enough to establish residency of ANY state. BUT if you have Social Security or Dividend income you are still liable to pay Federal Tax and you must file each year a FBAR form stating monies held overseas

A useful site is

http://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/

"Drasticly wrong" is a somewhat severe if not paranoid observation on your part

The pertinent part of the OP is whether he is responsible for taxes in a particular state....AND if he makes no income there ....NO.

as for a "tax domicile audit" ...see below.

States do not typically track in detail the activities of each taxpayer. If a taxpayer leaves a state, has no further income sourced in that state, and ceases to file tax returns in that state, then the tax authorities of that state do not typically inquire where the taxpayer moved to or whether they changed their domicile. The domicile/residency issue usually arises in two different circumstances. In the first circumstance, the taxpayer continues to have income sourced from that state, but the taxpayer begins filing as a nonresident.

The second circumstance is when a person, who has been filing as a resident of the state, ceases all filings in that state, and then at some point in the future again files as a resident of the state. This second circumstance often applies to individuals that move overseas for a period of time and then return to the same state. When the state tax authorities receive a tax return, they check to see if that individual filed a tax return in prior years. If prior year resident tax returns have been filed, but there is a gap in filings (of perhaps several years), the state tax authorities begin to wonder why no tax returns were filed during the intervening years.

If the state tax authorities identify a person with a gap in tax filings, and they believe that that person retained their domicile in that state, then they will require the filing of state income tax returns for the intervening years. Statutes of limitations for tax returns generally begin to run on the date a tax return is filed. If no tax returns have been filed for the intervening years, then the statute of limitations for those years remains open indefinitely.

If you wish to read more.....

http://intltax.typepad.com/intltax_blog/2008/06/us-state-tax-residency-domicile.html

[CharlieH]

Moving to other forum.

MOVED

[TerryLH]

When I moved here Ca sent me a letter. They noted that I was getting a local government pension, but hadn't filed state taxes. I wrote them that I no longer lived there, so didn't need to file.

The following year, the same letter. After saying I didn't live there, so didn't have to file, I asked that they make anote on my file, and said i would let them know if I ever returned.

Haven't heard a word in 17+ years.

Even if you have income from pensions, you don't have to file in the state it originates from if you don't live there.

[Nowisee]

All good reading and information.

Thank you

[Nowisee]

Not sure if this link is good:

http://www.azdor.gov/LinkClick.aspx?fileticket=lS4Ub6pXhRU%3D

 

My interpretation is that you must live there.  And to me, if I live there longer than 3 months, I will include it in my tax return just to be safe.

 

I think holding an Arizona drivers license is not enough to establish anything.  

 

I have no idea how to stay in contact (using mail) with the IRS or Arizona tax authorities.