State Income tax


#1

Should I pay state income tax if I sail on vessel in international waters? I live in Ca., but I was never home most of the time, only if I am on leave. I heard of FOREIGN EARNED INCOME TAX EXCLUSION. I wonder if this is applicable. I have worked on MSC vessels deployed overseas since 2015, but state taxes were not deducted.


#2

What are you smoking? You work for the US government and live in the State with the highest income tax rate in the country. California hounded me to collect luxury tax for a boat I no longer owned for years after I moved to the East coast.


#3

If you live in a state, you are liable for state taxes. You have a residence where you are domiciled, whether you are there are not. It’s not based upon frequency in or out of the state for the tax year. It’s basically where you call home, what drivers license you have, and where you get your paycheck and W2s.


#4

How do you define that? Do you own property in Ca.? Signed onto a house/apt. lease? If so, then yeah you’re on the hook. This site shows who has to file a return:

https://www.ftb.ca.gov/individuals/fileRtn/index.shtml

This defines what is a California resident:

https://www.ftb.ca.gov/individuals/glossary.shtml#R

When you get your tax bill from California, ask yourself if it’s worth that much money to “live” in a place where you’re not actually present most of the time. If not, you should go to Nevada (or some other state with no state income tax), rent an apartment for the minimum length possible, get a license, register to vote, get utilities in your name,etc. so that you can establish, as California puts it:

“a present intention of making it your true, fixed, permanent home and principal establishment. It is the place where, whenever you are absent, you intend to return.”

and can then tell California to shove it. Then, when you’re on leave if you want to spend that time in Ca, use Air B&B.

That’s what I did…f*ck state taxes man, especially if you’re not in that state to use their services. ESPECIALLY in that state with what they’ll be using your tax money to fund.


#5

Yeah, I learned a long time ago that I can claim residency in Florida by buying property to put my camper on, adding a mail box, sewage, power pole, and cement slab. It was cheaper than renting space on the beach like I did for years in the summer. Even giving up my homestead exemption, the difference in state tax alone paid for the entire lot. Just make sure you use that address and get a driver’s license.


#7

Being on US flag vessels in international waters count as being in the US so even if you lived in Thailand you’d be in the hook for federal taxes. State taxes are your fault for having a driver’s license and residence in California.


#8

Being taxed in international waters is how it has been for a long time. While working off the coasts of Africa, Brazil or Mexico is considered safe if you qualify for the exemption, a transit from any of those places to another country would eat into your 30 days allowed in the US for the year. That is what my CPA told me when I was living & working foreign.