by Tom Andrews, CPA

Every US taxpayer is subject to the federal level of tax reporting there is also the matter of state income tax.  Currently there are nine states without an income tax including Florida, and this makes Florida a popular destination for people looking to minimize the total tax burden.  For many luxury yacht crew who spend very little time in their former state Florida makes perfect sense to establish residency.  The most common question I get regarding residency is “If I get a Florida drivers license does that make a me a Florida resident”?  While obtaining a driver’s license in Florida is a start it is not the determining factor of what will make you a resident.

Some of the steps that will help support your Florida residency include but are not limited to the following:

  1. You must have a domicile in Florida
  2. File the Florida Declaration of Domicile.
  3. Obtain a Florida driver’s license.
  4. Register to vote in Florida.
  5. Register your vehicle in Florida

Ultimately you want to prove you have a closer connection to Florida than any other state, some additional steps that can support this position include:

  1. Move bank accounts to Florida
  2. Have your primary care physician in Florida along with your health insurance.
  3. Keep a copy of a lease if you are renting an apartment.
  4. Establish social ties in Florida this may include becoming a member of a local Church or house of worship.

As a yacht crewmember it may seem counter intuitive to establish permanent ties in any particular place as many yachting professionals tend to not want to be tied down.  Keep in mind you want to check off as many of these boxes as you can.  I have found that state residency audits can be subjective, I have had clients satisfy an audit by providing a drivers license and that is it, I have also been involved with audits in which the auditor requires a proof of domicile or a letter from the yacht confirming the crewmember was never worked or lived in the former state that conducting the investigation.  If you are unsure as to your residency in Florida or any other state I would recommend you visit your states government website as most jurisdiction publish the criteria they use to determine residency.

 

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