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18 DEPARTMENT OF ADMINISTRATIVE
AND FINANCIAL SERVICES
125 BUREAU OF REVENUE SERVICES
INCOME/ESTATE TAX
DIVISION
SUMMARY: This rule addresses the determination and effect of an
individual’s residency status with respect to Maine individual income tax.
Outline of
Contents:
.01 Definitions
.02 General information
.03 Domicile status
.04 Factors used in determining an individual’s domicile
.05 Statutory residency
.06 Residency safe harbors
.07 Resident and nonresident aliens
.08 Military personnel
.09 Students
.10 Application date
.01 Definitions
A. Nonresident. “Nonresident” means, for individual income
tax purposes, a natural person who is not a Maine “resident individual” as that
term is defined by 36 M.R.S. § 5102(5).
B. Part-year resident. “Part-year
resident” means, for individual income tax purposes, a natural person who is
domiciled in
C. Permanent place of abode. “Permanent
place of abode” means a house, apartment, residential care facility, dwelling
place, or other residence that an individual maintains as a household, whether
or not that individual owns it. The term
does not include a seasonal camp or cottage that is used only for vacations or
a dormitory room used by a student during the school year. A place of abode is not considered
“permanent” if it is maintained only during a temporary stay in
D. Resident.
“Resident” means, for
individual income tax purposes, a natural person who is a Maine “resident
individual” as that term is defined by 36 M.R.S. § 5102(5).
E. Safe
harbor resident. “Safe harbor resident” means
a natural person who is domiciled in
F. Statutory
resident. “Statutory resident” means a natural person who spent more than 183 days in
.02 General information
A.
Maine resident. A Maine resident must pay Maine income tax on all taxable income
regardless of its source. If a Maine
resident is subject to income tax by another state or similar jurisdiction in
another country on the same income, the taxpayer may be allowed a credit
against Maine income tax for all or some of the tax paid to the other state or
jurisdiction.
B.
Nonresident or safe harbor resident. A nonresident or a “safe harbor” resident of
Maine must pay Maine income tax on all income from work performed in
Maine. The nonresident or “safe harbor” resident
must also pay Maine income tax on all other income
derived from Maine sources, including income derived from business activity in
Maine carried out by sole proprietorships, partnerships, and S
corporations; capital gains from real or tangible property sold in Maine;
and income from rental of Maine property.
A nonresident generally does not have to pay Maine tax on interest,
dividends, alimony, pensions, or other income from intangible sources,
except on certain sales of a partnership interest, unless such income is from
property employed in a business carried on in Maine.
C.
Part-year resident. A part-year resident of Maine must pay tax on all income for the part of the
year during which the individual was domiciled in Maine. A part-year resident must also pay tax on any
income derived from Maine sources during the entire year.
.03 Domicile status
The word
“domicile” is a common-law (i.e., judge-made law) term that the Maine courts,
not the Legislature or Maine Revenue Services, have defined. Under the Maine common law, “domicile” means
the place (A) where a person resides, and (B) where that person intends to
remain and, whenever absent, intends to return.
Thus, according to the Maine courts, domicile has two components: residence and the intent to remain or return,
if absent. Once an individual’s domicile is
established in Maine, it continues here until domicile is established
elsewhere. An individual alleging a change in
domicile has the burden to show that domicile was established in another state
or country. The intent to move in the
future is not sufficient to establish domicile.
Maine Revenue Services considers all of an individual’s relevant
facts and circumstances allowed by
.04 Factors used in determining an
individual’s domicile
All relevant
facts and circumstances allowed by
A.
Property
ownership and residence.
1. Location of the individual’s principal
residence under the Internal Revenue Code;
2. Location of the individual’s mailing address;
3. Where the individual spent the most amount of time;
and
4. Whether the individual applied for a residential
property tax exemption or related benefit in Maine or a comparable benefit in
another state.
B.
Family and
dependents.
1. Whether the
individual can be claimed as a dependent on another person’s federal income tax
return and where that other person is domiciled;
2. Where the individual’s spouse or dependents reside;
3. Where the individual’s
dependents attend elementary and secondary school; and
4. Where
the individual or the individual’s dependents qualify for in-state college
tuition.
C.
Licenses
and registrations.
1. Where the individual is registered to vote;
2. Which state issued the individual’s
driver’s license;
3. Where the individual’s vehicles are
registered;
4. Where the individual maintains
professional licenses; and
5. Where
the individual declares residency for hunting and fishing licenses.
D.
Financial
data.
1. Where the individual qualifies for
unemployment insurance;
2. Where the individual earns wages;
3. Where the individual filed previous years’
income tax returns;
4. The address recorded for the individual’s insurance policies,
deeds, mortgages, or other legal documents; and
5. Where the individual’s safety deposit boxes are
maintained.
E.
Affiliations.
1. Where the individual’s fraternal, social,
or athletic memberships are located;
2. Where the individual’s union memberships
are maintained; and
3. The location of a church or other house of worship of
which the individual is a member.
F.
Other factors.
1. Where the individual’s personal property
is located;
2. Where the individual conducts business;
3. The address listed for the individual in a
telephone directory; and
4. Where the individual’s pets are located.
G.
Exceptions. Maine Revenue
Services does not consider whether a donation was made to an organization
located in or outside of Maine when making domicile determinations. Also, the geographic location of an
individual’s professional advisors (such as doctors, lawyers, accountants,
financial advisors, and investment advisors) or the
geographic location of a financial institution with an active account or loan
of an individual is not considered. The geographic location of a political
organization or candidate that an individual supports financially is not
determinative of the individual’s domicile.
H.
Presumption. If an individual is married, both that
individual and the individual’s spouse
are presumed to have the same state of domicile, even though they may live
apart for a portion of the year. This
presumption can be overcome if the facts clearly show that the spouses are
domiciled in different states.
.05 Statutory residency
Even if an individual is domiciled in another state,
he or she may still be taxed as a
.06 Residency
safe harbors
A.
Generally. For tax years
beginning on or after January 1, 2007, Maine law provides that certain
individuals are not treated as resident individuals even though they are
domiciled in Maine. In order to qualify
for such a statutory “safe harbor,” the individual must fall under either the
General Safe Harbor or the Foreign Safe Harbor.
B.
General
safe harbor: An individual domiciled in Maine will be
treated as a nonresident if the individual:
1. Did not maintain a permanent place of
abode in Maine for the entire taxable year;
2. Maintained a permanent place of abode outside Maine for the entire taxable
year; and
3. Spent no more
than 30 days in the aggregate in Maine during the taxable year (any
portion of a day is counted as a full day).
C.
Foreign
safe harbor: An individual domiciled in Maine will be
treated as a nonresident if:
1. Within any period of 548 consecutive days
(the “548-day period”) beginning on or after January 1, 2007, the individual
was present in a foreign country (or countries) for at least 450 days;
2. During the 548-day period, the individual
is not present in Maine for more than 90 days and does not maintain a permanent
place of abode in Maine at which the individual’s spouse (unless the spouse is
legally separated) or minor children are present for more than 90 days; and
3. During the nonresident portion of the
taxable year with which or within which the 548-day period begins and during
the nonresident portion of the taxable year with which or within which the
548-day period ends, the individual is present in Maine for a number of days
that does not exceed an amount that bears the same ratio to 90 as the number of
days contained in the nonresident portion of the taxable year bears to 548.
.07 Resident
and nonresident aliens
Certain Maine-source income of a
nonresident alien, (i.e., an individual who is a not a citizen of the
.08 Military
personnel
A.
Servicemember. A military servicemember’s legal residence does not
change solely because of a change in duty assignment. The legal residence designated at the time of
entry into the service remains the same until the member establishes a new
legal residence. A completed DD Form 2058,
“State of Legal Residence Certificate,” is evidence of a change in domicile.
1. Nonresident
servicemember: The military income of a nonresident stationed
in Maine will not be taxed by Maine, nor will income from intangible sources,
such as interest and dividends. However,
additional wages earned performing services at a non-military job in Maine or
income from operating a business in Maine are all subject to Maine income tax.
2.
Resident servicemember: Subject to the
provisions of 36 M.R.S. § 5122(2)(LL), military
compensation earned by a Maine resident servicemember for service performed
outside Maine under written military orders will not be taxed by Maine for:
a. Active duty service in the
active components of the US Army, Navy, Air Force, Marines, or Coast Guard by a
servicemember whose permanent duty station during such service is located
outside Maine; and
b. Active duty service in the active
or reserve components of the US Army, Navy, Air Force, Marines, or Coast Guard
or in the Maine National Guard by a service member in support of a federal
operational mission or a declared state or federal disaster response when the
orders are either at federal direction or at the direction of the Maine
Governor. A “federal operational mission” is limited to activity in support of
overseas deployment and excludes standard duty activity, such as training and
administrative activities.
An individual domiciled in
B.
Spouse of a servicemember. For
tax years beginning on or after January 1, 2009, the spouse of a servicemember
does not lose or acquire residency or domicile for income tax purposes when the
spouse is in a state solely to be with the servicemember in compliance with the
servicemember’s orders. The nonresident
spouse of a nonresident servicemember will not be considered a Maine resident
individual if the spouse is in Maine solely to be with a servicemember who is
in Maine in compliance with that servicemember’s orders. Income earned from services performed in
Maine by a nonresident spouse of a servicemember is not Maine-source income
subject to Maine income tax if the spouse is a nonresident in Maine solely to
be with a servicemember who is in Maine in compliance with that servicemember’s
orders.
.09 Students
Students generally remain residents of the state in
which they were domiciled prior to attending college, even if they attend
college full-time in another state.
Thus, a
.10 Application date
This Rule applies to tax years beginning on or after
January 1, 2011.
STATUTORY
AUTHORITY: 36 M.R.S. §112
EFFECTIVE DATE:
December
5, 2010 – filing 2010-610
February
11, 2012 – filing 2012-17
AMENDED:
February 8, 2017 – filing 2017-010