Some snowbirds seek escape from taxes, not just Minnesota cold

Some snowbirds time their migration south from Minnesota well before the north winds blow in winter conditions, but, while claiming another state as their home so as not to be subjected to Minnesota income and estate taxes, they spend more than the 183 allotted days here.

Over the years, the Legislature has developed criteria to help the courts determine someone’s state of residency for tax purposes.

Two bills before the House Taxes Committee Tuesday would modify the residency definition and clarify the criteria used to determine for tax purposes whether a person is truly domiciled in another state. Both bills were held over for possible omnibus bill inclusion.

Under current law, a person who maintains a home in Minnesota and spends more than half the tax year in the state is considered a Minnesota resident for income tax purposes. If there is a question about the location of a person’s primary residence, 26 factors could be called into consideration to determine the answer.

WATCH Full video of Tuesday's House Taxes Committee hearing 

Rep. Greg Davids (R-Preston), chair of the committee, sponsors HF182, which would remove business locations of a person’s lawyer, accountant or financial planner as a consideration of residency. Many people use services provided from other states and countries, he said, and the service providers’ locations are no longer a valid test of someone’s residency. He said this provision was included in last year’s vetoed tax bill. There is no Senate companion.

However, for Rep. Jerry Hertaus (R-Greenfield) the issue is a matter of trusting someone’s word.

He sponsors HF210 that would require an individual to file a binding and conclusive affidavit with the Department of Revenue stating they are domiciled in another state or country.

The bill’s companion, SF102, is sponsored by Sen. David Osmek (R-Mound). It has been referred to the Senate Taxes Committee.