Snowbirds seek escape from more than Minnesota’s cold

Snowbirds time their migration south well before the north winds blow in winter conditions. And, while they may claim another state as their home many will spend no more than 180 days here so they won’t be subject to Minnesota income and estate taxes.

The House Taxes Committee heard several bills in the last week that would modify the residency definition. All were held over for possible inclusion in a committee omnibus bill.

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. Presence in the state for any part of a day constitutes one day.

Rep. Joe McDonald (R-Delano) sponsors HF1393, which would raise the limit to 200 days. “Our state laws chases people out of our state,” he told the committee Tuesday. The bill’s companion, SF1030, sponsored by Sen. Bruce Anderson (R-Buffalo), awaits action in the Senate Taxes Committee.

Rep. Ron Ehrardt (DFL-Edina) called the change insignificant. “Why don’t we just leave it alone? How far could you tweak this stuff? Everyone knows it. This is ridiculous.”

Rep. Ann Lenczewski (DFL-Bloomington) said bills like this are “helping people not be Minnesotans,” so they don’t have to pay Minnesota taxes.

LISTEN: Archived audio of Tuesday's House Taxes Committee hearing

The flurry of so-called domicile bills appear to emanate from marketing tactics used by Sun Belt states trying to lure snowbirds away from their Minnesota services such as a financial planner, accountant or lawyer. They say that use of these services could qualify them as Minnesota residents.

Nonpartisan House Research Analyst Joel Michael said there are 26 factors that can be used to determine a person’s permanent home. “None of this is definitive or conclusive. These factors have to be weighed generally.” The problem is other businesses in other states are trying to lure business away from Minnesota, he said.

Rep. Greg Davids (R-Preston) sponsors HF837, which would modify the domicile test so that the location of an individual’s attorney or other professional advisor, or their financial institution could not be considered as evidence of where a person calls their home. “These are folks who are not Minnesota residents anyway, but where they have built long-term relationships. They are getting the short shrift; let’s just put in law what it is. That they don’t have to give up their services.”

The bill’s companion, SF745, is sponsored by Sen. Ann Rest (DFL-New Hope). It has been held over in the Senate Taxes Committee.