Assessment town tax when full time

[Thomas_G]

So I have been arguing with the town of our business in CT about town assessment taxes. We have been operating our photography business there for a few years and all of a sudden we receive an assessment letter this year requesting that we list all assets purchased over the last 5 years. Obviously the town needs funds, ha. But my issue is that we have not resided there in a while and have absolutely no business or personal assets there at all. I kept explaining this but she just kept asking "Well where do you put the assets when you return?" and I would respond that we don't return and she then just kept asking questions she didn't like the answers to and said something about leasing companies having to pay taxes. I ended the call not believing that her response held water.

Any insight into this that may help me out here?

Also any help or direction as to moving the address of the company to a tax friendly state would be of great help as well. Perhaps if someone has experience setting up a PO Box for the company address or something similar to that.

Thank so much.

[TBRich]

A lot of fulltimers have their "residency" address in Livingston, Texas through the Escapees. They have excellent mail forwarding, etc., and I am sure the reason they are located where they are is because of amicable tax lawss. (I think there's another similar service in South Dakota?) Perhaps a fulltimer can chime in and add more information.

Some towns try to assess a "user tax" to capture sales tax on items one purchases online for which they do not pay local sales tax. This line of thinking is becoming more common and more of an issue for business owners to deal with, though it seems highly unenforceable. I don't know for sure if this is what they are trying to do with you ... or if they simply want to assess a tax on business property.

[switz]

If one does not own real property (defined as land) in that state, does not have that state's drivers license, does not vote in that state, and no vehicles are registered in that state, he is not a bona fide citizen of that state for any reasons other than paying the sales taxes on food and gasoline as you drive through. I would say they are late to the lawn party.

You need to get an attorney not from that state but licensed to practice in that state to clarify your position. If your equipment was in your possession when you arrived, I would think they are not eligible to tax previously purchased property in a different state.

With the help of NSA, they could capture all of your records from the IRS to determine a tax liability on depreciating business property.

Grab the socks, your governments are here to help you....go broke.

[weirdstuff]

Do you have a business license in that town? If so, that's probably what is triggering the request.

Where we used to live, husband and I both owned businesses. I'd had my business for about 18 years there, and was never asked to file a form like this. My husband had his business for there for about 12 years, and in his 3rd or 4th year in business, the city requested him to file a business asset form.

Once you file, and list the business assets, they tax you on that amount.

If you never return to that town, then tell them you shut down your business, and will not be renewing your license. That should be the end of it....you hope..

[weirdstuff]

Originally Posted by switz

If your equipment was in your possession when you arrived, I would think they are not eligible to tax previously purchased property in a different state.

IF this is a business asset tax like the one where I used to live, it wouldn't matter where the assets were purchased. It's truly insane and angering. I never could understand how the city could tax you on stuff like this. Pissed me off every year husband would get his business asset tax bill.

[Protagonist]

Originally Posted by Thomas_G

Any insight into this that may help me out here?

Also any help or direction as to moving the address of the company to a tax friendly state would be of great help as well. Perhaps if someone has experience setting up a PO Box for the company address or something similar to that.

Thank so much.

Back when I was still considering a live-aboard boat for retirement, before I wised up and bought an Airstream, I researched this issue rather extensively. I am far less likely to full-time in my dinky Airstream Interstate after I retire than I would have been on a boat, but at least my research won't be wasted effort after all, if I can help folks like you.

Every person in the United States is required by law to have a "domicile." A domicile is a fixed abode (which can include a piece of real estate that you use to park your RV, but can't include chattel property like an RV). A post office box is not a domicile because no one can live at a post office box!

Your domicile determines several things:
1 - The address on your driver's license, vehicle registration, and passport.
2 - The state in which you pay taxes. One reason why organizations such as Escapees are based on no-tax states like Texas.
3 - Where you have to serve on jury duty when summoned. A domicile address clear across the country from where you normally travel means that going "back home" to serve on a jury could get expensive in a hurry. "I'm out of town" might work once or twice as an excuse to avoid jury duty, but sooner or later they'll declare you in contempt of court and issue a warrant for your arrest if you continually fail to show.
4 - The amount you pay for insurance (insurance is regulated by individual states, and rates vary by locality based on actuarial tables, so don't just choose your domicile state carefully, but choose your domicile city, town, rural route, etc. carefully as well).
5 - Voter registration, including which elections you can vote in as well as where you can vote. You may not care who's the mayor is if you're never home, but you will definitely care who you get to elect for Congress!
6 - The inheritance laws that govern the distribution of assets when you die; some laws supersede your last will and testament. In some states, some relatives legally must receive an inheritance even if you want to disinherit them, for example.
7 - Related to inheritance laws, your domicile state also determines which laws cover the distribution of assets in a divorce, as well as requirements for child support and alimony.

At the Federal level, three organizations drive the need for a domicile.
1 - The IRS insists that you have a domicile; your address on your tax return cannot include a post office box unless the US Postal Service doesn't deliver mail to your domicile address— hardly ever the case anymore unless you live in a place with no roads. Failure to list your domicile address on your tax return is illegal, and you definitely do not want the IRS after you!
2 - The US Postal Service insists that you have a domicile. And they have the means to prove whether the address you list is real. In order to rent a USPS post office box or a private mailbox, you have to fill out an application form, on which you must list your domicile address. USPS can— anytime and as often as they want— send a registered letter to the listed domicile address, return receipt requested. That means that someone (not necessarily you personally) has to be able to sign for the registered letter. If the registered letter is returned as undeliverable, USPS can prosecute you for mail fraud. If they can find you, that is.
3 - The Census Bureau wants to know where you live, so they want your domicile address, too. Many Government agencies, from Congress on down, use census data to determine representation and the distribution of services.

For businesses, the business is treated as an individual for most of the cases above, including how the USPS determines if the company's address is legitimate (registered letter to the business's street address).

If you are self-employed, and conduct your business out of your full-time RV, then your company address can be your domicile, just as if you were self-employed working out of your stick-and-brick home.

I've never dealt with incorporation of a business, so I didn't really research this aspect in any detail. However, I did learn that the states that are most amenable to corporations for tax purposes are not necessarily the ones that are most amendable to private individuals for tax purposes. You might want to have your domicile in Texas or Florida, and incorporate your business in Delaware, for example. But exactly how you'd do that is beyond me, and in such a case you'd do well to consult an attorney who practices corporate law.

[Jim & Susan]

In version 2.0 (or was it 3.0?) of Jim's life, I was a Paralegal. So I'm required to say a couple things. Thing one is that I can't give legal advice 'cause I'm not an attorney. Thing two is that you should talk to an attorney.

Now, reality. I'd hire a tax attorney in the state in question to help you draw a road map outta this. It's probably not all that difficult. You're just not getting anywhere right now 'cause your're dealing with a city employee that checks boxes on a form and isn't authorized to actually make decisions. (in days gone by, that would have been a rant about mindlessness, but I finally grew up).

You may find that none of this applies to your situation for any number of reasons and the attorney can deal with it quickly. Get estimates of fees form the attorney up front. Get estimates of fees from the attorney front. And did I mention get estimates of fees from the attorney front.

We have a members here that are attorneys and may privately point you in a competent direction.

Good luck and let us know how it plays out.

Jim

[mapley3]

While Protagonist's info is extensive and generally helpful, I question the statement: "Every person in the United States is required by law to have a 'domicile'." Can you quote the "law" reference? We have been full-timers for six years and are legal residents of a PO Box in South Dakota. Our drivers license, vehicle tags, insurance, 2010 US Census, voter registration, IRS 1040 returns, and mail address are all a PMB #. Postal Mail Box. None of the State or Federal agencies have ever questioned our lack of a 'domicile'. Only our county sheriff uses an old law to deny a CCW to full-timers unless they stay in a local campground or motel for 30 days. That old law uses the same reasoning as was referred to as "Where do you return to when you come home?" "Home" is where we hook-up but, our "residence" is a private post office box. Hopefully, this one objection will change with a new elected sheriff.

As to the original issue, I don't think residency matters as to this asset tax. If they are doing business in a city, as they admit, the city can charge a "personal property tax" on the business assets. Either pay the tax or move the business beyond the city corporate border. When I got my first personal property tax bill, I just moved my business to the adjacent, business friendly, township. Good Luck.

[Protagonist]

Originally Posted by mapley3

Can you quote the "law" reference? We have been full-timers for six years and are legal residents of a PO Box in South Dakota. Our drivers license, vehicle tags, insurance, 2010 US Census, voter registration, IRS 1040 returns, and mail address are all a PMB #. Postal Mail Box.

The Postal Mail Box is at a street address, though, isn't it? As in: PMB#, Street Address, City, State, Zip. If so, then you have a street address, the physical address where the mailbox is located. That street address— not the postal mailbox itself— is effectively your domicile. That is exactly the loophole that full-timers can exploit to establish a domicile without owning or renting real estate.

However, in order to even get the Postal Mail Box in the first place, you had to list a domicile address on the PS Form 1583 "Application for Delivery of Mail through Agent" (Box 7a, Applicant Home Address). Getting the mailbox did not make it your domicile. Unless you filed a new application, as far as the Post Office is concerned, the address in Box 7a is still your domicile.

You will not find one all-encompassing law that says you must maintain a physial address as a domicile, but there are several laws related to domiciles. Each state has its own residency requirements, and its own laws as to exactly what constitutes domicile and residency. At last count, 28 states had their own specific legal definition of a domicile; others have specific definitions of residency instead. Each Federal agency that deals with issues of domiciles and residency will have its own regulations as well. You're welcome to Google your state's requirements, but I doubt you'll find a nice, neat table that lists domicile requirements for all 50 states and the District of Columbia. When I considered full-timing on a boat, I concentrated on Texas and Florida, two no-tax states with marinas that I could use to establish residency, and they were quite similar.

[A W Warn]

FL indirectly taxes trailers by selling an annual license plate at an inflate price. It is less costly for me to title my trailer in NC, purchase the annual license, and pay the city/county property tax than it is to purchase the license in FL. Though, this would not be the case with a newer trailer. YMMV

[Condoluminum]

You may also wish to explore Montana as a potential "domicile".. When I worked for a Credit Union, we learned that RV Dealers in Legislature had passed some very accommodating laws enabling cheap Corporation setups, and several firms around Billings that use street address/Suite # for mail drops, as part of corporation servicing.. Low license fees, low maintenance costs, and full service for mail and responses..

Came to discover significant percentage of Ferrari's and Lamborghini's in Calif had Montana plates, as did more than 40 yachts longer than 50'... Notice the Montana plates next time you visit a snowbird RV park.. Also a number of expensive airplanes registered there... In western US, Montana has superseded Oregon as venue to minimize sales and asset taxes...

[Thomas_G]

Thank you all so much for you input! I have been offline for a few so just saw all these responses today. I talked to a friend who is a real estate attorney and she consulted a few of her attorney friends and guess what....We have to pay. Unreal. Sucking it up and paying this year then moving the business to a tax friendly state for 2014. We plan on settling down in TX or CA next year. Does anyone happen to know if TX or CA does any of this assessment taxes?

[weirdstuff]

Might be different in different cities, but the city in california where I used to live had this business personal tax assessment (see my post up above).

[overlander63]

California is not a very business friendly state.

[Wazbro]

I saw an add last week about New York state having "zones" that had 10 years tax free for businesses that moved there.

[switz]

As they say, "It's all about the money!"

[brain]

Dallas Texas has a Business Property Tax. We had to pay a tax based on the value of equipment we had in our studio.

[barts]

Originally Posted by overlander63

California is not a very business friendly state.

Well, since California's economy is the 12th largest in the world, whatever is going on seems to be working.

- Bart

[norsea]

Originally Posted by barts

Well, since California's economy is the 12th largest in the world, whatever is going on seems to be working.

- Bart

Right you are Bart. Everyone gets upset, but like it or not, as California goes, so goes the nation. Just look at the emmision controls on your car; "Meets California Emmission Requirements". Much better than having things running amok like the photo's we see these days of cities in China.

And, yes, we owned a business in California and I don't recall any issues/problems that were any different than that which is faced in any other state. But, having said that, we were not operating a paint booth or any such type of thing that would tend to be monitored closely. But hey, even with that, what is wrong with "doing the right thing" so that your neighbors do not suffer from that which you do? If it takes a state/federal law to protect me from idiots who think pouring gasoline into city storm drains is OK, so be it.

Jim

[overlander63]

I am not going to start slinging mud. Maybe some people need to again lose the attitude and answer the OP's question without trying their best to start yet another forum war.