The question often asked of me is “what do I need to do to change my residence from Utah but still keep my home there?” A number of Utah folks have been attracted to the mild winters of southern Nevada not to mention the lack of state income tax.  In this message today I will share with you the 3 crucial factors that must be addressed to successfully make the transition out of Utah residency and still keep your home there for seasonal use.

We often hear that all you need is an address out of state, change in driver’s license, and register to vote in the new residence.  These are all well and good in your progress to changing residency but will not satisfy the Utah State Tax Commission (USTC).  The State of Utah seems to have increased its effort to find and tax those who keep one foot in and one foot out of their state as a means of combating increasing costs of government.

Utah defines a resident as a person who is domiciled in Utah for any period of time during a taxable year only for the duration of that period. Utah considers you to be domiciled in their state if you have:

1. Dependent children in Utah public school K-12 or you or your spouse are enrolled as a resident student at a Utah state institution of higher education.
2. You claim a residential exemption for a primary residence.
3. Voted in Utah during the taxable year and you are not registered in any other state.

You can fall subject to the Utah domicile argument if you meet other criteria but the three factors listed above are the key focus of the USTC.

Item 1 is straight forward and if you have children attending public school in Utah expect to be treated as domiciled in the state and considered a resident for tax purposes.

Item 2 is unknown to many Utah taxpayers and you may not even realize you are receiving a property tax exemption for a home used as a primary residence in Utah.  Under UC Title 59-2, Property Tax Act a non-primary residence is taxed at the full rate without the benefit of the primary residence exemption.  Therefore it is crucial to you in order to change residency outside Utah that you go to your County office in Utah and file a written statement that your residence no longer qualifies for the primary residence exemption assuming you now only use it as a second residence for less than 183 days per year. Yes, your property tax will increase significantly and whether the State should be able to do that is a discussion for another day.

Item 3 is easy to follow if you immediately upon your establishment of the intent to move out of the State of Utah you change your driver’s license to the new State and register to vote at the same time.  These 3 provisions consider you and your spouse to both be domiciled in Utah if one of you fails the test unless you can prove under a preponderance of the evidence your claim is more convincing.

I would highly recommend that after you address items 1, 2 & 3 you also register automobiles in the new state, move auto insurance to the new address, move membership in your church, club or similar organization to your new residence, direct all mail to the new address, file your next tax return with the new out of Utah address, do not apply for a Utah resident fishing or hunting license after the move or any other document where you declare your residency to Utah.  These are all crucial and should not be a decision of which state has a lower cost but rather which state is your residence.

If you have questions as you plan your change in residency outside of Utah please call us immediately.