# How to avoid state taxes legally? **URL:** \ **Category:** Factual Questions\ **Created:** [March 11, 2002, 7:48pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661 "2002-03-11T19:48:35Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![zedan](https://avatars.discourse-cdn.com/v4/letter/z/a88e4f/32.png) [@zedan](https://boards.straightdope.com/u/zedan)\ **Post date:** [March 11, 2002, 7:48pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/1 "2002-03-11T19:48:35Z")
Is it possible to claim residency in a state like Alaska or Texas (where there is no state income tax) in a legal way even if you technically live in another state with high taxes? What are the requirements for claiming residency and are there any loopholes to exploit? ---
**Author:** ![Dilbert](https://avatars.discourse-cdn.com/v4/letter/d/58f4c7/32.png) [@Dilbert](https://boards.straightdope.com/u/Dilbert)\ **Post date:** [March 11, 2002, 8:21pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/2 "2002-03-11T20:21:23Z")
I seriously doubt it is possible to legally do this. Even it it was, it would probably be so difficult after a year you’d decide it wasn’t worth your time. ---
**Author:** ![maralinn](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@maralinn](https://boards.straightdope.com/u/maralinn)\ **Post date:** [March 11, 2002, 8:25pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/3 "2002-03-11T20:25:29Z")
Google is your friend! [http://touchngo.com/lglcntr/akstats/AAC/Title15/Chapter023/Section143.htm](http://touchngo.com/lglcntr/akstats/AAC/Title15/Chapter023/Section143.htm) 15 AAC 23.143. Establishing and Maintaining Alaska Residency (a) An individual’s intent to establish residency, remain indefinitely in Alaska, or to return to Alaska and remain indefinitely is demonstrated through the establishment and maintenance of customary ties indicative of Alaska residency and the absence of those ties elsewhere. Acts that are required by law or contract or are routinely performed by temporary residents of Alaska are not by themselves evidence of residency. In evaluating whether an individual claiming Alaska residency has demonstrated an intent to remain indefinitely in Alaska, the department will consider whether or not an individual has: ``` (1) taken steps to establish Alaska residency and sever a previous state residency; (2) ties to another state which indicate continued residency in the other state; and (3) taken other action during or subsequent to the qualifying year that is inconsistent with an intent to remain in Alaska indefinitely. ``` (b) An individual may not become a resident while absent from Alaska. © Physical presence in Alaska is not, by itself, sufficient to establish residency. Before January 1 of the qualifying year, an individual must have taken at least one step beyond physical presence in Alaska to establish residency. The department will not consider external indicators, including those listed in 15 AAC 23.173(g) , established less than six months before December 31 of the qualifying year as evidence of the establishment of Alaska residency in time to qualify for the current year dividend. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [March 11, 2002, 8:28pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/4 "2002-03-11T20:28:20Z")
And in Missouri (probably some other states as well) you’re responsible for paying the state income tax in the state where you earned your money, and then deducting it on your return in the state where you reside. ---
**Author:** ![maralinn](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@maralinn](https://boards.straightdope.com/u/maralinn)\ **Post date:** [March 11, 2002, 8:29pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/5 "2002-03-11T20:29:23Z")
And in case you still don’t know how to search, [http://www.utexas.edu/student/giac/residency.html#Anchor-49575](http://www.utexas.edu/student/giac/residency.html#Anchor-49575) Q. How do I establish residency? A. One must be an independent (not claimed as a dependent for income tax purposes), US citizen or permanent resident, (have a green card, also known as card I551 or the evidence of I551 stamp in the passport) or international student who is eligible to establish a domicile in Texas and live in the state of Texas for 12 consecutive months without attending an institution of higher education and be gainfully employed. ---
**Author:** ![Chef\_Troy](https://avatars.discourse-cdn.com/v4/letter/c/85f322/32.png) [@Chef\_Troy](https://boards.straightdope.com/u/Chef_Troy)\ **Post date:** [March 11, 2002, 8:44pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/6 "2002-03-11T20:44:15Z")
Seems to me your best bet is to leave whatever hellhole of a state is trying to stick it to you and actually MOVE to Texas. It worked great for me…😃 ---
**Author:** ![maralinn](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@maralinn](https://boards.straightdope.com/u/maralinn)\ **Post date:** [March 11, 2002, 8:53pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/7 "2002-03-11T20:53:36Z")
Ooops, I apologize for the Texas info – that one doesn’t have anything to do with residency as it applies to state income tax. Very sloppy searching on my part. ---
**Author:** ![Dignan](https://avatars.discourse-cdn.com/v4/letter/d/f07891/32.png) [@Dignan](https://boards.straightdope.com/u/Dignan)\ **Post date:** [March 11, 2002, 11:28pm UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/8 "2002-03-11T23:28:58Z")
I am not positive, but after Alex Rodriguez signed with the Texas Rangers, I think I remember hearing that his pay would be taxed for the team’s away games in states with income tax. Rodriguez’s salary for the Rangers’ 81 home games would not be taxed. So if you work outside of Texas, even if you’re a resident of The Lone Star State, you’ll probably have to pay income tax on the income you receive where ever you’re working. ---
**Author:** ![Tripler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripler/32/21807_2.png) [@Tripler](https://boards.straightdope.com/u/Tripler)\ **Post date:** [March 12, 2002, 4:55am UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/9 "2002-03-12T04:55:11Z")
Join the military! I did (not for tax reasons, tho), and claimed my home state of New Jersey on my finance forms. New Jersey doesn’t excise state income tax if you are active duty serving _outside_ of the state. My paychecks are larger because of it. 🆒 Tripler God bless America. 😃 ---
**Author:** ![blainer](https://avatars.discourse-cdn.com/v4/letter/b/a698b9/32.png) [@blainer](https://boards.straightdope.com/u/blainer)\ **Post date:** [March 12, 2002, 7:18am UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/10 "2002-03-12T07:18:33Z")
> [@](#): > > \*Originally posted by Dignan \* > \*\*I am not positive, but after Alex Rodriguez signed with the Texas Rangers, I think I remember hearing that his pay would be taxed for the team’s away games in states with income tax. Rodriguez’s salary for the Rangers’ 81 home games would not be taxed. > > So if you work outside of Texas, even if you’re a resident of The Lone Star State, you’ll probably have to pay income tax on the income you receive where ever you’re working. \*\* To continue the uncited info, I am pretty sure that many states with professional sports teams passed specific laws taxing out of state atheletes at a special rate. IIRC, one state began this practice and all the others followed suit when they realized it could be a decent money maker. ---
**Author:** ![Redhawke.the.bard](https://avatars.discourse-cdn.com/v4/letter/r/779978/32.png) [@Redhawke.the.bard](https://boards.straightdope.com/u/Redhawke.the.bard)\ **Post date:** [March 12, 2002, 8:25am UTC](https://boards.straightdope.com/t/how-to-avoid-state-taxes-legally/97661/11 "2002-03-12T08:25:45Z")
Sorry, **zedan** , but odds are, just changing residency won’t help. IAAL; this OPINION is not legal advice; this OPINION is not an offer or acceptance of legal representation; YMMV, don’t try this at home… For instance, in California, if you make any money in the state, you must file as a non-resident, but you still pay the tax. The only way to get around state taxes is to make all of you rmoney for the year in a state that has no income tax.