State residency and tax issues: Here’s how long you can stay in a state before you have to pay state taxes

Dear RVtravel.com,
We’re considering spending a summer in an RV park in Minnesota, Wisconsin, or Michigan, and were wondering if there were any tax issues to consider. Do these states charge income tax on retirees who are just summer visitors? —Dave T. 

Dear Dave,
Thanks for your question. We are full-time RVers and spend summers in Minnesota and Wisconsin too. We were also concerned about state tax liability, particularly in Minnesota, which has strict residency and income tax laws.

*Please note that we are certainly not tax accountants. Always consult a tax professional for specific tax advice.

Domicile

Basically, the state that you have permanent residency in is your “domicile.” A domicile is your legal address and is located in the state you pay taxes. You can only have one domicile at a time, but can still be a statutory resident of another state for tax purposes.

183-day rule

In general, for most states, there is a 183-day rule. This means that whatever state you spend more than half a year in, or more than 183 days, you are generally considered a “statutory resident,” regardless of your permanent state of residency or domicile. As a statutory or dual resident, you may be required to pay state income tax.

Minnesota tax residency

A traveler may be considered a Minnesota resident for tax purposes under the 183-day rule, even if you have permanent residency in another state.

You are considered a Minnesota resident for tax purposes if both of the following apply:

• You spend at least 183 days in Minnesota during the year. Any part of a day counts as a full day.
• You or your spouse rent, own, maintain or occupy an abode. An abode is a residence in Minnesota suitable for year-round use and equipped with its own cooking and bathing facilities.

If you meet the first condition but the second condition applies for less than the full year, you are considered a part-year resident for the time the second condition applied.

I have literally counted the number of days we have been in Minnesota or Wisconsin, including days flying up to visit kids and grandkids. We never got close to 183 days, but we save all receipts or have credit card information for both the states we travel in and stay in longer term, just in case.

Minnesota has begun requiring campgrounds to record the license numbers of RVs and cars. That can determine time within the state for tax purposes. It is not uncommon for states to conduct residency audits. The onus is on the individual to prove residency.

Just visiting

Again, the 183-day rule usually applies, but it is best to double-check the rules in the state you are visiting. It is a good idea, particularly if staying in a state long-term or earning money in a state that is not your domicile, to keep all receipts and track your time spent in that state.

I use a credit card for all transactions and that gives us a record of when we entered and left a state in case of any dispute. We also keep an old-fashioned paper calendar with all the campgrounds and places we travel to for reference.

State domicile evidence

These are generally items that determine domicile:

• Record of time spent in state
• Drivers license
• Vehicle registration
• Voter registration
• Bank or brokerage accounts
• Home ownership or property lease
• Membership in social organizations
• Mailing address

Dual residency

When staying in a state long-term (more than 183 days per year) or earning money in a state, you might be considered to have dual residency. A nonresident can be required to pay taxes to a state, but only taxes on the income earned in that state. Consult your tax accountant if this applies to you.

Some of the things that indicate dual residency are:

• Homes in two states
• Living in one state and working in another
• Relocated to another state on a temporary basis

Flowchart to determine residency

Again, 183 days is a defining point. Missouri uses this flowchart to help determine resident/nonresident status.

Always consult a tax professional if there is any concern about nonresident or resident status and state income taxes. For the most part, maintain a domicile, travel the country, and don’t stay more than 183 days in a state that is not your domicile.

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