SD Resident Buying Property in Arkansas

[AdvSeekers]

We're South Dakota residents via an Americas Mailbox PMB. Recently, we've decided to get a house in Arkansas to spend a good part of the year at, rather than true RV full-timing like we had been. So, I suppose we will soon be in the part-timers category. We are now under contract on a home in Arkansas. My question, we want to remain SD residents due to the tax advantages, and having mail forwarded when on the road. Does anyone know if this is possible?

[bigdogger]

When a taxing authority goes after someone for not filing and paying the proper taxes, the number one source for the information that started that investigation is friends and acquiantances of the person being investigated. My guess is that if the OP made a large income from their business and the only property they own is in Arkansas, the Arkansas taxing authorities could make a pretty good case that the OP's business was based in Arkansas, the OP lived in Arkansas and hence owes state income tax to Arkansas. Since they own property there, the state would have an asset to attach a lien against. Then it would be the OP fighting the state which would be a fight where the odds would greatly favor the state since they have much deeper pockets to fund the fight. If the OP makes a small amount of money, no big deal. If you are talking big bucks, there will be people who will take an interest and it will be the person you least expect who will turn you in. Nobody likes paying taxes and it will rub even your best friend the wrong way if they pay and you cheat and don't.

[kakampers]

AdvSeekers wrote:

kakampers wrote:
To be legal just be sure to not stay any longer in Arkansas then their residency requirement allows....you can own property anywhere. We own in Texas, but make sure we don't stay longer than their six month requirement...we have stayed SD "residents" all along...

How do you prove how long you are in Texas? We plan to come and go in the camper whenever we see fit - no set time frames.

It doesn't become an issue unless someone, usually a neighbor or law enforcement questions it. If you would need to show proof, campground receipts from out of state will usually supply the necessary timeline proof...

[AdvSeekers]

Thanks for the advice and brainstorming everyone! I have contacted the necessary tax professionals for advice and we are going to proceed based on that.

[lbrjet]

Your tie to AR is performing work there. Doesn't matter if your client is on the moon. Will you get away with it? Most certainly if you quit announcing your intentions on the internet or anywhere else.

[AdvSeekers]

My contract is out of the east coast (has been for years), and there are no other clients. So, no ties to AR. Bgum, you make good points, and some I hadn't thought of. Thank you. Everyone has been very helpful. Just a note: we have a PMB in SD and also a small rental residence there.

[CKNSLS]

NRALIFR wrote:

AdvSeekers wrote:
We're South Dakota residents via an Americas Mailbox PMB.

It's been my understanding that PMB's alone cannot be used to claim residency. Do you own a residence in SD?

You'll be paying property/personal property tax to Arkansas, so you'll be assessing with the county your house is in regardless of your SD residency. It's not like you'll be invisible to the state.

I hope you contact a competent tax/legal adviser on this, because your "self employed independent contractor" status is one that can put a lot of different twists on this. Who are you performing work for? Are any of your clients in the state of Arkansas? Even if you're a non-resident, if any of your income is from an Arkansas source, you're supposed to file an income tax return with the state.

Moving to Arkansas Guide

"Non-residents and part-year residents who have received income from any
Arkansas source must file an Arkansas income tax return regardless of their
individual income level. A non-resident is defined as someone who does not
maintain a home or other residence in Arkansas. A part-year resident is defined
as someone who has established a home or other dwelling place in Arkansas at
some time during the previous calendar year or as someone who moved out of
the state during the previous calendar year. A residence is defined as a lodging
place used as a permanent dwelling place or a dwelling place to return to at
some point during the calendar year."

:):)

Based on the above it certainly sounds like he won't be able to claim SD as a residence.

[NRALIFR]

AdvSeekers wrote:
We're South Dakota residents via an Americas Mailbox PMB.

It's been my understanding that PMB's alone cannot be used to claim residency. Do you own a residence in SD?

You'll be paying property/personal property tax to Arkansas, so you'll be assessing with the county your house is in regardless of your SD residency. It's not like you'll be invisible to the state.

I hope you contact a competent tax/legal adviser on this, because your "self employed independent contractor" status is one that can put a lot of different twists on this. Who are you performing work for? Are any of your clients in the state of Arkansas? Even if you're a non-resident, if any of your income is from an Arkansas source, you're supposed to file an income tax return with the state.

Moving to Arkansas Guide

"Non-residents and part-year residents who have received income from any
Arkansas source must file an Arkansas income tax return regardless of their
individual income level. A non-resident is defined as someone who does not
maintain a home or other residence in Arkansas. A part-year resident is defined
as someone who has established a home or other dwelling place in Arkansas at
some time during the previous calendar year or as someone who moved out of
the state during the previous calendar year. A residence is defined as a lodging
place used as a permanent dwelling place or a dwelling place to return to at
some point during the calendar year."

:):)

[CKNSLS]

First-I am not familiar with the tax laws. Just making a thought here-

You claim residence in one state but own no property there.

You are going to cease to be full time. Your RV is not your main domicile anymore.

But you do (will) own property in a state where you will be staying.

Where will your Doctors, Dentists, etc., be located?

Seems like to me there could be issues......

[lbrjet]

If you are performing work in Arkansas, regardless who it is for, then you owe Arkansas income tax. You should consult a tax advisor.

[bgum]

For those who say they own property in a different state and all is good, I say you haven't been thru an audit and a legal decision has not been rendered in your particular set of circumstances. Look at his first post. He stated he has only a box for mail. No mention of rental or ownership of property in SD. Property in a different state is only an indicator of residence. The fact that he "plans" to spend a considerable amount of his time there and is only a part timer is additional indicators. I stick to my orig. post.
I am sure these folks will go with you to the audit and explain to the officer how their residence is set up.

[AdvSeekers]

kakampers wrote:
To be legal just be sure to not stay any longer in Arkansas then their residency requirement allows....you can own property anywhere. We own in Texas, but make sure we don't stay longer than their six month requirement...we have stayed SD "residents" all along...

How do you prove how long you are in Texas? We plan to come and go in the camper whenever we see fit - no set time frames.

[WyoTraveler]

AdvSeekers wrote:

bgum wrote:
You will own property in Ark. and live in Ark. but claim residence in some other state. You will be filing false returns. Even if it is "possible" it is illegal.

By possible, I meant legal. I do not intend to do anything illegally. I merely want to know what others do when they have property in two different states. The SD property is just a rental - in addition to the PMB. The AR one will be a purchase, not a rental.

If I do keep the SD residency, yes, I will continue to have all mail go through to the SD address. I am a self employed independent contractor and my biz is also under the SD address. Therefore, all of my biz mail will continue to go to the PMB. Our cars are also tagged under SD.

I don't know if these explanations help with attempting to make my question make more sense. I do appreciate the assistance thus far. Trying to get a game plan going once we close in July.

I live in and a resident of Wyoming. I owned rental property in CA. That didn't make me a resident of CA. That doesn't mean you are illegal if you owned property in all 50 states. Also doesn't make you a legal resident in all 50 states. However, if you make an income, like I did in CA, I was obligated to file and pay CA income tax on the money I made from those properties. Many people in this country own real estate in many states. Some income and some not. States have rules that decides residency in that state. Owning property isn't one of them.

[kakampers]

AdvSeekers wrote:
Our realtor did indicate that Arkansas does have the Homestead Act where we get a $350 tax credit if we flash an AR drivers license to them at the courthouse with that address on it. We will of course forgo that, as $350 is not a large savings in comparison.

As for state income tax, I would assume since I will continue to work remotely and keep my biz registered with SD, I would avoid income tax.

That would be correct...

[kakampers]

To be legal just be sure to not stay any longer in Arkansas then their residency requirement allows....you can own property anywhere. We own in Texas, but make sure we don't stay longer than their six month requirement...we have stayed SD "residents" all along...