How do I "prove" I am not a Massachusetts resident for state tax purposes?

Question

I am in the process of moving out of Massachusetts. According to my reading of the Massachusetts's DOR's "guidance," I have to "prove" I am not domiciled in Massachusetts if I want to not be taxed by Massachusetts. The problem is that the rules for what constitutes a "resident" is ambiguous, and believe it or not, the law appears to have "examples" in it, as though a judge would just read these examples and then make more or less arbitrary decisions about whether a person is a resident or not. For example, I am moving to a house in a different state, but temporarily I will still own my current house in Massachusetts until I sell it, which might take up to a year to do. Will some judge say I owe Massachusetts taxes because of this? The law is ambiguous.

Obviously, this appears very un-legal to me, and I am wondering how to deal with it. I have three fundamental questions:

1. Is the burden of proof really on me? I thought the prosecution had the burden of proof.

2. Do I need to "claim" in written form that I am not resident any longer, or can I just leave and stop sending in tax forms.

3. Since the law is ambiguous, how can I possibly "prove" I am no longer a resident, or gain acknowledgement of that proof.

Note that I will have no Massachusetts sourced income or bank accounts in Massachusetts after I leave. I will just have my old house temporarily and some post office boxes.

Answer 1

§1(f) of Chapter 62 (income tax) defines "resident" or "inhabitant" for that chapter as

(1) any natural person domiciled in the commonwealth, or (2) any natural person who is not domiciled in the commonwealth but who maintains a permanent place of abode in the commonwealth and spends in the aggregate more than one hundred eighty-three days of the taxable year in the commonwealth, including days spent partially in and partially out of the commonwealth. For purposes of clause (1), the making of a financial contribution, gift, bequest, donation or any other financial instrument or pledge in any amount or the donation or loan of any object of any value, or any combination of the foregoing, qualifying for deduction as a charitable contribution under section 170 (a) of the Code to any corporation, foundation, organization or institution, which is exempt from taxation under section 501(c)(3) of the Code, shall not be used in any manner to determine domicile in the commonwealth or any other jurisdiction. For purposes of clause (2), a day spent in the commonwealth while on active duty in the armed forces of the United States shall not be counted as a day in the commonwealth.

Perhaps you are looking at this summary by the state which gives a list of "rules", which are not a strict interpretation of the statute. I would assume that at least some of those hurdles reflect case law, interpreted most generously in favor of the DOR.

Answer 2

It is a little unclear how this question will end up presenting itself, which would influence issues like burden of proof and the procedural process that applies.

For instance, it could come up in an audit of an income tax return or a notice requiring you to file an income tax return when you did not file one, in a car registration citation, or in some other context. The context would determine the burden of proof and the procedural issues.

Normally, you would prove that you are not a resident by proving that you live somewhere else.

Among the things that can prove residency somewhere else are:

1. Your sworn testimony, for example, in an affidavit or at a hearing (People often forget that their own sworn testimony is always a common and widely accepted form of proof.)
2. The sworn testimony of someone else, for example, in an affidavit or at a hearing.
3. Utility bills.
4. Tax returns filed in another state.
5. Written leases.
6. Credit card statements showing that you make your day to day purchases in another state.
7. Your children's school enrollments if you have school aged children, or your enrollment in an educational institution (or even just a recreational class) in the new residence.
8. Voter registration.
9. Car registration.
10. A state ID or driver's license from another state.
11. Bank account statements from a branch in a different state with your new address.
12. Wage stubs for another state.
13. Business licenses in another state.
14. Memberships in gyms, clubs, etc. in another state.
15. Periodical subscriptions deliverable to your address.
16. Mail received in another state.
17. Photographs of your residence showing that your stuff is there, or of you there.
18. Receipts showing payment of toll road charges on a regular basis in the new residence state.
19. A library card in your new residence.
20. A lease of your old residence real estate to someone else.

Mere ownership of real estate in a state does not make you a resident for tax purposes.

Answer 3

The burden is not on you to prove you are not a resident for tax purposes. If you have no nexus to MA, the burden is on whatever MA government agency wants your money to demand it. If they demand it and you fail to answer their demand then you will almost certainly end up in default. But you actually have a number of methods to answer their demand:

1. If the state presents no basis to claim jurisdiction, just disclaim residency. E.g., if MA says, "You paid us taxes in 2016, so we expect a tax filing for 2017 too," you can respond by saying, "I was not a resident of MA during any of 2017, and I earned no income subject to MA taxation during 2017."
2. If the state presents a basis for jurisdiction (e.g., you had property registered in the state during the tax year in question, or some other nexus to the state) then you have to respond with your own evidence that you (or the money in question) are not subject to MA taxation. Fortunately:
3. There is a safe harbor against demands for state income taxes: For every dollar of taxable income, you can only be taxed by one state. (This was affirmed by the Supreme Court in 2015 in Comptroller of the Treasury of Maryland v. Wynne.) Therefore, if you show that you paid taxes to another state on the income in question (e.g., by sending a copy of the tax return), that's legally the end of the matter.