A driver’s license and voter registration is a couple of the basics in a state residence case. In a recent decision in the Court of Appeals of Iowa , James Schmitz is one who neglected these basics and is paying a high price of $290,000 in taxes, penalties, and interest. Iowa has a personal income tax rate of 8.98%, and South Dakota has no income tax.
James was offered the position of vice president in charge of pork operations with IBP in February 2000. His wife, Vickie, and their children stayed in Cedar Falls. He moved to an apartment in Dakota Dunes in August of 2000 to hold the position and traveled to Cedar Falls on weekends and some holidays each year.
James continued to be registered to vote in Iowa and requested an absentee ballot in Iowa in 2004. He had anIowadiver’s license which he renewed in the state in 2004. Four or five vehicles were owned by the family and were all registered in Iowa. James, himself, had personalized Iowa license plates on his vehicle.
As co-owners, James and Vickie built a new home on Stratford Court in Cedar Falls in 2005. A 1989 homestead tax credit application was signed by James and his wife in June 2006. Along with a signature, the application included the statement, “I declare residency in Iowa for purposes of income taxation and no other application for homestead credit has been filed on other property.” This means that the homestead tax credit on their other home should be discontinued.
Residence questionnaires from the Iowa Department of Revenue were sent to James and Vickie. Based on their answers on the questionnaires, the Department later sent them a statement showing they owed over $290,000 in taxes, penalties, and interest for the years 2001 through 2005. The statement was due to James’ failure to pay Iowa income taxes.
Every person has one and only one domicile. Once an individual is domicile in a state, that status remains until the individual takes action to become domicile in another state or country.
This caseshows neglecting the basics such as a voter’s registration, driver’s license and car registration will cause you to loose a domicile case.
If you receive a questionnaire from a state revenue department it is important that you consult with a state and local tax expert. This will ensure that you filled out the information correctly.
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