There’s typically some sort of income limit that would prevent people from being taxed for spending a week at a conference *. Additionally, some professions ( I think trucking company, railroad and airline employees) are exempt from being taxed by states they pass through ( or over). But athletes and performers pay taxes in every state they work in.
You are correct that the laws don’t necessarily apply so well to remote work - they were set up in the days when a NJ resident working in NY would have been actually commuting to NY to work. But the reality is that lots of laws result in remote work oddities. For example, if a NY employer allows an employee to work remotely from California that is going to have the same effects as setting up an office in California. The NY employer will have to learn and follow the California labor laws that will apply to that employee, and the California employee may establish a sales tax nexus for the company and could even make the company liable for California income taxes. This is why some companies require even 100% remote workers to live and work in only certain states ( typically where the company already has physical locations)
For example, a NY non-resident only pays taxes on NY source income over the amount of the NY standard deduction.
I know that in Montana, there’s a state law that a resident for any purpose is a resident for all purposes (the specific example cited is that if you’re eligible for a hunting or fishing license, then you have to pay state income tax). But it’s not consistently applied, because you can be paying state income tax as a resident for years, before you qualify for in-state tuition at the state universities.
A friend of many years used to live in Missouri. He retired and decided to be a full time RV traveler. He bought a small lot in South Dakota with no dwelling there upon.
His RV and truck are registered in SD and he has a SD drivers license. He also owns a home and lot in Arizona where he spends most of his time these days.
That sounded very strange to me - so I looked it up. And what
the law actually seems to say is that even if you don’t actually reside in Montana, you will be considered a resident for this purpose ( not all purposes) if you are required to and have paid Montana income taxes ( or if a number of other circumstances apply)
Not sure if it is mentioned downstream, but the RV rather implies that it is legally registered and insured somewhere so you have to have roots somewhere.
Now there are lawyers that will establish themselves as addresses of convenience - they for a fee will accept mail for you, and process paperwork - insurance, vehicle registrations, banking and legal affairs, but that can end up being pretty expensive.
pro athletes pay income taxes in every state where they play a game. I don’t know if it matters if they play or remain on the bench for the entire game. I guess there are CPAs who know how to handle all these state returns. Some states even have different tax rates based on the sport.
Of course there are also games played in Canada for the NHL, NBA and MLB. NFL plays games in London but not this season.
Getting a new driver’s license these days is insane. You have to prove both residency and identity through multiple means, such as utility bills in your name addressed to your physical address, social security number, passport, etc. And you generally need more than one item to prove your physical address. You do have a choice among various options - a receipt in your name for payment of property tax, a bank statement addressed to you at your physical address (not a PO Box) and/or a lease in your name will do, for example.
Anyway, the point is you can’t just waltz in to some random state DMV and get a new driver’s license. It’s a huge PITA (I understand that the reason is federal regulations instituted after 9/11, but I was living abroad from 1993 to 2018 so I missed the transition. All I know is, it sure ain’t how it used to be.)
Yeah, that reminds me. SD exploits some kind of loop hole in the law and as a result lots of people who don’t really live in SD register their cars and get their licenses there. I know this because my parents lived in Mexico for about 15 years. They and all their expat American friends had SD car registrations and SD driver’s licenses. SD got the various administrative fees, which I suspect is a real contributor to state revenue, and all the expats got a fairly hassle-free means to keep an American DL and auto registration.
No idea how South Dakota manages to circumvent all the regulations, but I applaud their ingenuity.
I doubt that South Dakota is circumventing any regulations - there aren’t any Federal laws regarding who a state can give a license to or allow to register a vehicle. The regulations are usually on the other end - it’s great that South Dakota will allow me to register a car entirely by mail,as a non-resident, without having to provide proof of insurance and without having any emissions or safety inspections * but many states require new residents to switch licenses and registrations within period of time after moving. Apparently in some parts of Mexico you can drive indefinitely with a US license and plates which is why this works.
These appear to be the reasons SD is so popular with Mexican ex-pats - and my guess is that South Dakota might be the only state that has all of them
You may well be correct; I’m not an expert on these matters. But certainly Hawai’i presents all the requirements as something they are forced to do by the Feds. Are they lying? Possibly.
The Fed part is about the standards that will allow the ID to be used for Federal purposes such as boarding a plane - states are still free to issue non-compliant documents but are not required to.
As to remote work and state taxes, I haven’t read anything specific about it, but let me tell you, there was a lot of guidance introduced the last 6 months. Just about every other daily accounting update I got said something about there being new guidance for state taxes with respect to remote workers. We don’t deal with anyone that would be affected so I haven’t had to learn anything about it, but I suspect a large part of the reason the updates were coming so often is that different states decided on things at different times, and perhaps even in different ways. The Federal government has very little ability (if any) to control how states tax income, and it’s generally not very uniform. It’s already true for businesses that you can pay state income tax on more than 100% of your income because different states have different rules for determining how much income of a business is allocable to their state.
If US rules are anything like Canada - you have X days (60?) to acquire a DL in your new province of residence, register your vehicles, etc. People with a permanent residence in one place can live elsewhere and not re-register provided they have ties back to their home province; i.e. students in university. We had a contract worker who go in an accident with another employee, still had his old out-of-province plates on his car after 3 years. When someone asked him, he said “If you’d give me a permanent job instead of one six month term after another, I might bloody move here legally.” Insurance was a lot cheaper where he came from for an old junker.
(Fun story I heard… way back when, one province instituted government auto insurance. One f the big businesses there objected, on principle. So they transferred their fleet of company cars - which went all over - to the neighbouring province, only to find that as recently acquired brand new vehicles, they were liable for sales tax on the vehicles all over again. You pay sales tax when you register a vehicle. After a short while, they realized this wasn’t working, the cars spent most time in the first province. They transferred them back again, and found that despite having paid sales tax on the vehicles already in the first province, they were liable for the tax all over again. Apparently, if you register a vehicle less than 6 months old, you must pay sales tax - to avoid everyone going to Alberta which has no tax, buy and register there, and then bring it home. Can’t re-register it tax-free like a normal move. No exception to -“But I already paid”.)
Just a quibble - the only other (third world) country that charges income taxes on citizens who no longer live in the country is Eritrea. Unlike the USA, which threaten only the taxpayer, they also threaten any relatives still in the country, to ensure they get paid.
AFAIK there’s a multi-state (and province) agreement or treaty or something that allows personal vehicles from one jurisdiction to travel within all other jurisdictions. Sets minimum insurance, recognizes drivers licenses, etc.
What if all your assets were overseas though? You’re domiciled in the UK, but you’ve had substantial earnings in, say, Canada, and your banking and investments are all situated there.
Canada might not be the best example since it’s a Commonwealth country and there might be some special rules; let’s say we’re talking about Mexico, or Japan, or Brazil or some such.
The UK doesn’t really have jurisdiction in any of those countries. I suppose the UK authorities could attempt to freeze any assets you did have there.
I’ve heard that people in the US will often have just a PO box as their legal address, in whatever state they are “domiciled” in, just to prove some presence. If there’s a UK equivalent, the authorities in England might seize all your junk mail
Working for a company which does consulting all over the country (well, the world, but I’ve only travelled in the US): this is true for us as well. Not so much if I go somewhere for a short business trip, but when I’ve been stationed somewhere longer-term I’ll have to pay taxes to the state of residence for that time. Makes April 15th extra-special fun - as I claim all the income earned in the other state on an out-of-state return, then I have to claim it in my home state as well (but I get a credit for the tax paid to the other state). If the other state’s rate is much higher, like when I worked in Manhattan for a bit, I can only claim credit for the amount I’d have paid my home state for that same income - e.g. if I pay 1,000 to New York, and my home state’s taxes for the same income would be 300, I only get to claim a credit for the 300.
I used to work for one of the “Big 8” (now Big 4, I think) accounting firms, and my husband works for another of them. The partners in the firm have to basically file tax returns for every state the company does business in, regardless of whether they personally conducted any business. They have a whole department which does all the partners’ returns.
‘Where’ is not so easy to define anymore. In this day and age for many jobs where you sit physically has little to do with where or how you are earning your income. It’s something you could do from anywhere, or even while moving hundreds of miles an hour in the air rapidly crossing borders.
