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Discussion/question about state income tax for out of state earnings Login/Join 
Smarter than the
average bear
posted
My basic understanding is that each state is allowed to levy income tax on money earned in that state, regardless of whether or not the person is a resident of that state. Pro athletes have to file income tax returns in all states in which they have played during the year, and have to figure out what part of their earnings is attributable to the games played in those states.

But this also applies to ordinary people who happen to work some in a state in which they don't reside. But, some states don't have a state income tax, such as Florida and Texas.

Here comes the part that I think is bullshit:

My state, Louisiana, has a state income tax. But if a Louisiana citizen works in Texas, for example, Louisiana says that since Texas doesn't have a state income tax, that citizen has to pay Louisiana state income tax on the money earned in Texas.

My youngest son graduated from LSU, moved to Texas and did an engineering co-op over the summer after graduation, then moved to California for grad school. After grad school, he got a job with AB/InBev and moved to Florida for a few months for training, then moved to Colorado. He never moved back to Louisiana.

Louisiana is trying to collect income tax on the money he earned over the summer in Texas, and the next year in Florida. I think it's pretty shitty, but he may be screwed because he never relinquished his Louisiana drivers license. Of course he claims he was no longer a resident of Louisiana when he worked in Texas and Florida. He did get a Colorado license when he moved there. He has thus far refused to pay what Louisiana wants, and somehow they haven't attached his Federal refund. I think he'll eventually lose this.

Question for CPAs or Tax Attorneys: I get that states have jurisdiction to collect income tax on money earned there; but what is the jurisdiction to collect taxes earned out of state? Do other states do this as well, or is Louisiana just being a dick?
 
Posts: 3036 | Location: Baton Rouge, Louisiana | Registered: June 20, 2006Reply With QuoteReport This Post
Spread the Disease
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I fucking hate taxes! My residence and LLC are based in NM, but when I teach classes in OK, I still have to pay NM gross receipts tax, which is around 8%.

Jerks.


________________________________________

-- Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past me I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain. --
 
Posts: 16385 | Location: New Mexico | Registered: October 14, 2005Reply With QuoteReport This Post
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Your not going to like the answer.

The battle is not worth the fight.
LA will just go to the US govt and put a lien on any future Fed refunds.

He did not change license or where he votes. Two of many the things state look at.

He also told the Texas company that he was a LA resident. Hence them being required to report to the stars

If he did not file any returns, he must. The state does not know you moved until you file a final return there. It could be for a part year.

States are way more aggressive than before. Everyone wants what they think is their money.
 
Posts: 159 | Location: The Lovely State of Illinois | Registered: November 24, 2008Reply With QuoteReport This Post
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^^^^^^^^^^^^^
This guy knows his stuff. I am sure he is correct.
 
Posts: 13443 | Location: Stuck at home | Registered: January 02, 2015Reply With QuoteReport This Post
The Unmanned Writer
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California, if you spend more than five days (i think that’s the number) earning and income here, you pay state taxes on those earnings. We have a sector in FL and the company has to keep track and then, deduct accordingly. The guys in FL absolutely HATE coming here for work with some only here for two, five-day trips per year.

Also, i recall hearing Jerry Coleman (now retired baseball announcer for the Padres and once Rookie of the Year for the Yankees) state they, along with the players, had to have accountants because they paid state taxes for each day they were in a given state and flying out of one state after a day game only to arrive before 6pm in another for a game the next day was a nightmare.

And as noted, if i spend a month in FL or TX for work, i get the CA shaft like your son. In fact, if CA taxes are higher, i pay the difference. If the other state is higher, i eat the difference, no compensation by CA.







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Posts: 13717 | Location: It was Lat: 33.xxxx Lon: 44.xxxx now it's CA :( | Registered: March 22, 2008Reply With QuoteReport This Post
Tinker Sailor Soldier Pie
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Yup. My company is based out of Florida, and I never work in Utah, but I pay Utah state income taxes every year.


~Alan

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Posts: 28308 | Location: Elv. 7,000 feet, Utah | Registered: October 29, 2012Reply With QuoteReport This Post
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