States Crack Down on Top Earners Who Flee as Levies Rise: Taxes
By Margaret Collins - Mar 13, 2013
With professional golfers and hedge fund managers talking about moving to lower-tax enclaves, states are stepping up audits on top earners who flee.
Several states including California and Maryland raised taxes on high earners last year, and Congress boosted federal levies on them. Families who look to change their domicile to a state with no income taxes such as Florida or Nevada open themselves up to years of scrutiny and possible litigation as local governments search for revenue.
“I look at some of these domicile audits almost as an archeological dig and a full physical including MRIs and CAT scans,” said David Scott Sloan, a partner who advises high net worth families at Boston-based Holland & Knight LLP. “What we’re seeing at least in Massachusetts is the tax authorities are not going quietly into the night.”
States are using automated programs to track down residents who say they have moved and may be keeping two residences, and officials are seeking to tax earnings on stock awards beyond their borders. In Minnesota, Governor Mark Dayton proposed a so- called snowbird tax that would lower the number of days a person spends in the state before having to file a return.
MORE...
http://www.bloomberg.com/news/2013-03-13/states-crack-down-on-top-earners-who-flee-as-levies-rise-taxes.html