Legal offices and financial counselors have been saying it for years: try to be consistent in demonstrating your state of legal residence. And there are always some military service members and family members who insist that it doesn’t matter, that no one has ever challenged them, and that the legal and financial folks are just being alarmist.
While it’s true that relatively few military folks have their state of legal residence challenged, it does happen. (Heck, we got a tax bill for 2010 from Maryland last year. Go figure.) And when it does happen, it’s hard to defend yourself against that challenge if you have a driver’s license in one state, your cars are registered in another state, and you’re voting in a third state, none of which are the place where you’re living. In particular, I remember a service member who was stationed in Virginia but was claiming to be a resident of Texas. Virginia came knocking, asking for state taxes. The service member had, over the years, gotten a Virginia driver’s license, registered to vote in Virginia, and he owned a house in Virginia. Ultimately, the service member was unable to prove that he had maintained any ties to Texas, and he was liable for many years of past Virginia state taxes.
The Veterans Benefits and Transition Act of 2018, which permits military spouses to “use” their active duty husband or wife’s state of legal residence for purposes of taxes and voting, is likely to make those challenges more frequent. Now, I don’t have proof of that, but it is the opinion of a lot of smart folks within the military legal and tax community. As states continue to lose more and more revenue from military families, and with the advent of data sharing that makes it easier to see where any individual is voting, registering their cars, and maintaining their driver’s licenses, I believe that we will see more challenges of folks who are claiming legal residence in a state without backing that claim up with concrete actions.
It’s my recommendation (you know, as a non-lawyer and non-tax professional) that you remain pro-active about maintaining everything possible in your state of legal residence. This includes declaring that state in your will, renewing your driver’s licenses there (assuming you aren’t stationed in a state that requires you to change), maintaining vehicle registrations, registering to vote (and actually voting), and any other things that come your way. It’s often a little bit more work, and sometimes it is a little more expensive, but that’s a small price to pay for being able to defend the state you’re claiming as home.
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