After working hard for several decades, long-time Minnesotans might decide to split their time in a warmer state during the winter months. As people begin to spend more of their time in another state and acquire property, it makes logical sense that they would consider switching residency. In trying to switch residency, people might also find a more hospitable tax climate.

For those who are considering switching residency from Minnesota to another state, it may be important to know that tax officials are turning up the heat on audits. According to some local observers, people have to be meticulous about proving they are actually residents of a new state.

If Minnesota officials believe that individuals are trying to skirt the law by inappropriately filing taxes in a different state, legal action may be taken with the intention of getting individuals to pay a larger tax bill. When determining state residency, tax officials may take a look at the following factors:

  • Property ownership
  • Time spent in each state
  • Mailing addresses
  • Voter registration
  • Driver’s license registration
  • Organizational membership
  • Location of doctor visits

Although these are just a few of the criteria used to determine residency, it’s clear that tax officials may go to great lengths simply to assert that a person lives in Minnesota. A report from the Star Tribune indicates that the recent tax increase for high-income earners has likely increased the kind of scrutiny applied to residency records in order for the state government to collect more money.

Given how difficult it is to prove that a person has switched residency from Minnesota to a new state with a different tax climate, it’s easy to see how he or she could make an honest mistake in this regard. Even though people might legitimately see themselves as a resident of a different state, Minnesota officials might have a different idea. Unfortunately, tax collectors may be less forgiving than Minnesota’s winters.

Source: Star Tribune, “Minnesota’s wealthy caught in a tight tax net over residency,” Adam Belz, April 16, 2014