State Taxes Question

My experience has been that you are taxed in the state that you reside in. That’s the reason so many mariners live in places like New Hampshire, Florida, Tennessee, Texas, and Washington to name a few. I’d say you should be fine

State of Maine taxes New Hampshire residents who work at the Portsmouth Naval Shipyard (actually on the Kittery side of the river). Which is why New Hampshire periodically tries to get the state line to pass down the Back Channel instead of down the middle of the Piscataqua River.

2 Likes

Really? That’s cold blooded. Well belay my last

My son worked on the NCL cruise ship out of Hawaii a some years back. Since it never left Hawaiian waters the company took out state taxes in addition to federal taxes.

In your case, if the company takes out states taxes you don’t have much of a choice.

1 Like

I live in one of the non state income tax states that you mentioned. In the late 90’s early 2000s I worked for a company out of Louisiana. In 2009 I received a bill from a collection agency on the behalf of the state of Louisiana. I called Baton Rouge & told them I didn’t work in Louisiana but was international instead. My case worker told me I would have to prove it & my former employer wasn’t going to to provide me copies of log books that they no longer had. I called a tax attorney in Baton Rouge & he told me if I took it to court I would lose. He said out of stater deadbeats who don’t pay a state income tax to their own state always loses in court. The lawyers advice was to pay the taxes in full then ask for it to be refunded or take it to court & ask a judge to refund it to me. I started making payments to Louisiana & was half the way paying it off when a La IRS supervisor looked over my case & told me to stop paying. About 3 months later the state refunded the $4K that I already paid them.

So yes, some states do want out of state mariners to pay their state income taxes, especially if you’re not paying state income tax anywhere else.

1 Like

Perhaps review this discussion:

And more importantly take a look at 46 CFR 11108

If it’s one contract (and even perhaps if it’s not) I’d suspect you want zero witholding.

I would have asked to see the states tax payer advocate they can advise you on the best course of action. It’s a good first step for getting resolution and its free.

california is another one.

The Amtrak Law applies to mariners in state income tax matters. Had to send a copy of the law to one state in the past and actually had to get a US Attorney to explain the law to a state tax official in another case when they wouldn’t believe me. Once explained the respective states dropped the matter and the employers who were wrongly taking taxes out of the state I did not reside in immediately stopped that practice.

Here’s a blurb from a training class for payroll people.
Amtrak Reauthorization and Improvement Act of 1990 (Pub. L. 101-322). Railroad and motor carrier employees (i.e.,
operators of a commercial motor vehicle, like a tractor, trailer, or semitrailer) who work in
more than one state are subject only to the state and local income tax laws of their state
of residence, regardless of where they work.
Under Pub. L. 106-489, merchant mariners employed in interstate commerce are
subject to the state and local income taxes of their state of residence.

3 Likes

I believe there cases on what constitutes “interstate commerce” for purposes of taxation.

Courts have interpreted “interstate commerce” very broadly —to Things that have nothing to do with it —- in order to constitutionally apply federal regulations. Such as ‘wetlands” solely within a state that are theoretically capable of being dredged for “navigation.”

I seem to recall a case where the court said that a harbor tug was not an “instrumentality of interstate commerce.”

Expect to encounter very arrogant and ignorant state tax officials that simply want your money and don’t care about any federal exemptions that you are claiming. California is the absolute worst state, and the California Attorney General is the absolutely worst state official, when it comes to improper withholding and state tax liens. Don’t ask how I know this.

Most employers who wrongfully withhold state taxes will stop when you show them the federal law. Typically, the comptroller will research the issue and quickly come to the right decision. However, don’t be surprised if you discover years later that there is a state tax lien against you, and on your credit report, for the taxes that the employer did not withhold.

My Louisiana employer never withheld state taxes but I got a bill from the Louisiana state tax agency. The feds reported to the state of Louisiana that I was employed by a Louisiana company so they wanted their money. I told them I didn’t work in the state, that I worked in the middle of the Gulf of Mexico and they dropped the claim before I could have my company write me a letter to that effect.

Don’t try this in a state like CA you may be in for a rude surprise. You are transiting state waters and berthing in a state so the argument of working only in federal water isn’t going to fly

Louisiana seems like they got new software or a third party is doing the accounting I have gotten letters the last couple of years looking for money.

1 Like

I have only had to pay taxes to my home state, regardless of where I have worked out of, and that includes many west coast states including Hawaii. I have one permanent and several gig employers.

I worked a tug company in Maryland that withheld Maryland taxes, (I am not now, nor have I ever been, and nor will I ever BE a Maryland resident).

Come tax time, my state had a form for credit for income taxes paid or withheld to another state. It was a moderate PITA, but I figured that the two states’ Revenue mobs could break each other’s legs over the loot.

That’s probably the best solution for any “toll collectors” in some burgh you are only passing through.

It would be very, very helpful if shipping companies would withhold state income taxes. It’s not like it’s rocket science…just fire the entire payroll department and contract that stuff out.

Seaman Joe Blow withholds M-2 Federally and withholds M-2 to his home state of West Carolina…it’s all in the payroll program and done electronically.

Then we wouldn’t get gouged for not sending in enough quarterlies.
Or trying to explain to some state tax bureaucrat that we’re usually in the middle of the effin’ ocean and post offices are hard to come by.

I think you’re fine not paying. It is an interesting question; it would imply that for any given hitch any intrastate travel would mean you owe some state income tax, which clearly isn’t true. I would imagine as long as you made one interstate trip during the hitch you’re good. If the employer tried to deduct as Seadog suggested you would have a case at least. Aside from that Amtrak law someone mentioned, there was a law passed in 2004 clarifying our tax status, let me see if I can find it.

edit: found it, 46 USC 11108. Unfortunately it doesn’t clarify this issue except to say that state tax withholding must be voluntary, so Seadog’s advice is not operational.

The state of Maine will hunt you down if you live there even part year. I know people who they put in prison. By a house in N Conway, NH and you be at the beach in an hour and ski here all winter.

I know NY if you land on a plane at 2355 they consider that 1 day in the state.

I worked for a company out of New York for a few years & never paid the state of New York a penny.

For people living in non-state-income tax states like myself, perhaps it’s a good idea to put 3-5% of your income from each day while in state waters away in a separate investment account? If a state says that you owe them money then you have the funds earmarked, if not, you’ll have more money for retirement.

Also, I worked with a guy once who kept track of where he was each day for tax reasons. That’s probably not a bad idea either in case a state does want to hunt down mariners travelling through their waters. When the state of Louisiana went after me it was impossible for my ex-employer & myself to say what days I was in port or offshore because so much time had passed.

The primary factor is where you live. If the state you live in has an income tax, they want your money.

The next most important factor is where your employer processes it’s payroll. If your company processes its payroll in a state like California, you’ve got a big problem. California does not care about federal laws, they just want your money. If the employer processes its payroll in a state like Washington or Florida, you have no problem.

1 Like

That’s not very helpful for those of us that live in no tax states, like NH, DE, FL, TX, Wa, AK, etc.
For example, nothing in the holding of this case would prevent California from Taxing the wages of a seaman living in Washington.

Nor does this case discuss or apply the federal statutes applicable to seamen, or those engaged in interstate commerce.