This is the first article in a series dedicated to the rules regarding who qualifies as a “resident” of the State of Minnesota for tax purposes. Status as a resident of Minnesota is important as all Minnesota residents are subject to Minnesota individual income tax, gift tax, estate tax, and sales and use tax. Non-residents are usually not subject to these taxes unless they purposely avail themselves of Minnesota taxes.
This article provides a brief overview of one definition of a Minnesota “resident,” the “domiciliary resident.” We will discuss other ways a person can qualify as a “resident” of Minnesota in future articles.
According to Minnesota Statutes Section 290.01, subdivision 7(a), a “resident” is any individual “domiciled” in Minnesota. This is otherwise known as the “domiciliary resident” definition. “Domicile” is “the bodily presence of an individual person in a place coupled with an intent to make such a place one’s home.” Minn. R. 8001.0300, subp. 2. “The domicile of any person is that place in which that person’s habitation is fixed, without any present intentions of removal therefrom, and to which, whenever absent, that person intends to return.” Id.
The Minnesota Department of Revenue (MDR) and the courts will examine all of the facts and circumstances to determine whether an individual is a “domiciliary resident.” They will also evaluate the person’s purpose and intent in changing his/her domicile. Mauer v. Comm’r of Revenue, 829 N.W. 2d 59, 67-68 (Minn. 2013). A person’s acts will have more weight than their words when determining whether the person was sincere in changing his/her domicile. Comm’r of Revenue v. Stamp, 296 N.W.2d 867, 869 (Minn. 1980).
Minnesota Rules 8001.0300, subpart 3 sets forth a list of twenty-six factors the MDR and the courts consider when evaluating whether an individual is a “domiciliary resident.” The twenty-six factor list is not exhaustive. The MDR and the courts will consider other relevant factors. No one factor determines whether a person is a “domiciliary resident” of Minnesota. Also, a person cannot count factors to determine whether they are a “domiciliary resident,” i.e. fourteen out of twenty-six factors favoring domicile in another state does not automatically mean the person is domiciled in another state. The MDR and the courts will evaluate the totality of the circumstances.
This article explains one way a person can be subject to Minnesota taxes. Please watch for future articles explaining other ways a person can be subject to Minnesota taxes.