You are moving to another state, but will keep some Minnesota ties (e.g., maintain a house or cabin in Minnesota, spend summers in Minnesota, remain employed by a Minnesota company). Will the Minnesota Department of Revenue agree that you actually moved?
Most people know about the Department's administrative rule listing the things they should do when changing their residency. For example:
- Change driver’s license - Check!
- Register to vote - Check!
- Purchase home in new state - Check!
- Spend over half the year outside of Minnesota - Check!
The list goes on. The Department’s rule lists 26 factors. Some of the factors are no longer considered. And many additional factors that are considered are not on the list. But if you do the “important” things on the list, does that mean you have safely left Minnesota? Not necessarily.
Contrary to common belief, there is no “checklist” for changing your residency. Nor are the factors merely tallied to determine your residency. Rather, whether you establish a domicile in a new state is determined by looking at your “subjective” intent. The Department’s list of factors is meant to help determine which state you intend to be your home.
You should certainly attempt to satisfy as many of the factors currently considered by the Department as possible to have the best opportunity of convincing the Department that your ties to your new state are stronger than your ties to Minnesota. But convincing the Department (or the Minnesota Tax Court, if it comes to that) that you truly moved really comes down to your story.
Why did you move? Did you want to be closer to family? Did you retire and fulfill your lifelong dream of living on a golf course or the ocean? Do the facts of your case support your narrative?
There have been instances when many of the factors have weighed in favor of a taxpayer remaining a Minnesota resident, yet the taxpayer was still able to convince the Department that he or she moved because the taxpayer had a compelling narrative. Conversely, there have also been instances when many factors have weighed in favor of a taxpayer establishing a domicile in a new state, but his or her “story” doesn’t add up and the Department is not convinced he or she moved.
So, if you are thinking of moving from Minnesota, it is important to answer this question: What’s your story?
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