State income tax & paid piloting

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Let'sgoflying!

Let'sgoflying!

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Dave Taylor
I presume you do not pay to just any state that you land in (or fly over).

Is state income tax determined by:

-the state where you reside?
-the state where your payments come from?
-the state of origin of most of your flights?
-some mysterious combination of these?
-or, does it depend on the state?
 
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If you live in NYS, it's determined by taking 8% of any transaction you make anywhere, then adding any additional fee, tax, or surcharge they can think of for any reason to anything. If you're not sure what to send in or pay, send in appreciably more.. that's the right amount.

Yeah, I just finished my NYS income tax.. and yeah, I'm bugged.
 
Let'sgoflying! said:
I presume you do not pay to just any state that you land in (or fly over).

Is state sales tax determined by:

-the state where you reside?
-the state where your payments come from?
-the state of origin of most of your flights?
-some mysterious combination of these?
-or, does it depend on the state?
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Which are you talking about, income tax (per title) or sales tax (per body of post)?
 
you pay state sales tax to any state that levies a sales tax on any purchase you make in that state that qualifies for that tax.
 
sorry - not sales tax, I run a business so sales tax is a natural part of my conversation. I mean income tax for pilots.
 
Income tax is SUPPOSED to follow where income is derived.

Hard to say for a professional pilot. Since they don't always live at their base.

Plenty of people here to opine.

I do know a lot of the rules around proper taxation of wages for "transitory" employees in consulting jobs. Also, I have anecdotal evidence of how states and cities tax professional athletes and performers.

I'm guessing if you're just passing through it's a nothing. If you're operating routinely from a place you're subject to some tax.
 
Taxes are punishment for not using your money in gov't approved ways... Remember that, there's always a way to prevent tax...
 
In some states, you work a day in that state, you pay the income tax on those earnings; Maryland does that, and not just to professional athletes; a good buddy was TDY to PAX river (civilian contractor) for a couple of weeks, and MD wanted their tribute. I believe other high tax/left wing states do the same.

I seem to recall there was some legal wrangling over the topic - getting "credit" from the home state for the days NOT worked, and the income taxed i the "visited" state - I want to say some semblance of equity prevailed, to prevent double taxation, or getting some measure of consideration.
 
All that matters is where you live. Could be based at ORD but live in Oklahoma. Pay Oklahoma state income tax, not Illinois.
 
I was screwed when I worked in the Gulf. I was told I would not have to pay Louisiana taxes as a Texas resident.

I was "exempt," they said. Wrong. It turns out my employer was exempt from withholding taxes, but I still had to pay...
 
Let'sgoflying! said:
I presume you do not pay to just any state that you land in (or fly over).

Is state income tax determined by:

-the state where you reside?
-the state where your payments come from?
-the state of origin of most of your flights?
-some mysterious combination of these?
-or, does it depend on the state?
Click to expand...

I dunno. But I would think if you earn money in a State they could tax it. Say you live in State A, then fly to State B and someone there pays you to fly them, then it is State B source income. You would not declare that to State A. Depending on how much business you did in State B you may not even be required to file, but you still would not declare that income in State A.
 
If you fly for an "air carrier", i.e. a 121 or 135 operator, you pay the income tax of the state you reside in. If you fly 91, you pay income tax of where your employer is based, but you are exempt of income tax when you are outside of that state flying for work. The reporting for the exemption for people operating under 91 can be tricky. I used to have the reference saved on my computer but I can't find it right now and I am a little busy.
 
If I was providing pilot services as an independent contractor and receiving a 1099 I would definitely pay income tax to the state from where the 1099 originated.
 
Sundancer said:
I seem to recall there was some legal wrangling over the topic - getting "credit" from the home state for the days NOT worked, and the income taxed i the "visited" state - I want to say some semblance of equity prevailed, to prevent double taxation, or getting some measure of consideration.
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When I have been an employee of large firms, we would report the location of work and the taxes would be taken accordingly. Then on the following check they would remit the difference between the tax taken and my home tax rate. I was in TX so I would get it all back on a 15 day lag. Then at the end of the year my salary was grossed up to make it tax neutral. They also paid for our tax preparation, since most of were filing in several states.
 
Groundpounder said:
If you fly for an "air carrier", i.e. a 121 or 135 operator, you pay the income tax of the state you reside in. If you fly 91, you pay income tax of where your employer is based, but you are exempt of income tax when you are outside of that state flying for work. The reporting for the exemption for people operating under 91 can be tricky. I used to have the reference saved on my computer but I can't find it right now and I am a little busy.
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I would think that "but you are exempt of income tax when you are outside of that state flying for work" should read "but you are exempt of income tax 'to that state' when you are outside of that state flying for work" The state you are in and earning money in is not going to exempt it.
 
Think what it must be like to professional athletes to pay their taxes. And there are all kinds of municipalities just waiting to stick it to them with their jock taxes on income earned when athletes playing on the road come to their cities. No wonder Marvin Harrison always said, "I get paid for practice. I play the games for free." Not sure that would work well as a defense, though.
 
PPC1052 said:
Think what it must be like to professional athletes to pay their taxes. And there are all kinds of municipalities just waiting to stick it to them with their jock taxes on income earned when athletes playing on the road come to their cities. No wonder Marvin Harrison always said, "I get paid for practice. I play the games for free." Not sure that would work well as a defense, though.
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I know CA is one of the states that likes to hit up visiting athletes big time.
 
I remember when I worked for Bell & Howell and visited the Cherry Hill, NJ office for training. We had to keep a log of where we were all day, every day. New Jersey was not a problem, but since the NJ office serviced Philadelphia, the records had to be maintained to prove we were not in Philadelphia while working - for even a day.
 
I saw that to @SCCutler

When I went to Philly for work they always scheduled the meetings in Bucks County so everyone else could save a week of the city wage tax.

At first I just thought it was shorter commute for them. For most it wasn't.
 
Here's another one on the "it's where you actually are, not where the home office is thang." A few years ago a temporary Control Tower was put in at KVUO for about a year or so. It was staffed by Controllers from KPDX and KHIO, both in Oregon, VUO is in Washington. Washington does not have Income Tax. More than a few of PDX's and HIO's Controllers live in Washington. While they have to pay Oregon source income tax normally, on the days they went to VUO to work, they didn't. If Washington did have Income tax, the Oregon residents would have had to pay Washington source income tax for the days they drove across the river to work VUO
 
I always thought the tax was for the state in which you reside... hence a lot of New Yorkers taking residence in Florida, and Californians taking residence in Washington or other non income tax states but still living in NY and CA

I believe in California they have been trying to change the law to minimize the residency, that is, if you're at your "vacation home" in California for more that three months of the year you're paying California state income tax...
 
Ravioli said:
I saw that to @SCCutler

When I went to Philly for work they always scheduled the meetings in Bucks County so everyone else could save a week of the city wage tax.

At first I just thought it was shorter commute for them. For most it wasn't.
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My brother move his office out of Center City Philly to the burbs.... the city taxes were killing him.
 
Groundpounder said:
If you fly for an "air carrier", i.e. a 121 or 135 operator, you pay the income tax of the state you reside in. If you fly 91, you pay income tax of where your employer is based, but you are exempt of income tax when you are outside of that state flying for work. The reporting for the exemption for people operating under 91 can be tricky. I used to have the reference saved on my computer but I can't find it right now and I am a little busy.
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This is the most accurate post in this entire thread. Air carriers, interstate over the road truck drivers, etc have a special provision that applies to them. I used to have the court case available all the time, but haven't had any clients that it pertained to for a number of years, so I would have to dig up the citation in order to provide it. The general rule does not apply to these individuals. They are taxed by their resident state only.

General rule for everyone else, you are taxed by the state where the compensation was earned. Most non-resident state tax returns are like this. There are many resident state tax returns that tax only the income earned in the state, but there are many resident state tax returns that tax all the income and provide a credit for taxes paid to another state.
 
Ventucky Red said:
I always thought the tax was for the state in which you reside... hence a lot of New Yorkers taking residence in Florida, and Californians taking residence in Washington or other non income tax states but still living in NY and CA

I believe in California they have been trying to change the law to minimize the residency, that is, if you're at your "vacation home" in California for more that three months of the year you're paying California state income tax...
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Aghhh. 3 months!!!? Do you have any links to this?
 
Have all of your customers pay into your account in your home state. Use paypal or or other web based payments. Then your income is in your home state. That works right up until a customer claims a payment to you as a deduction in their state.
 
JD318 said:
This is the most accurate post in this entire thread. Air carriers, interstate over the road truck drivers, etc have a special provision that applies to them. I used to have the court case available all the time, but haven't had any clients that it pertained to for a number of years, so I would have to dig up the citation in order to provide it. The general rule does not apply to these individuals. They are taxed by their resident state only.

General rule for everyone else, you are taxed by the state where the compensation was earned. Most non-resident state tax returns are like this. There are many resident state tax returns that tax only the income earned in the state, but there are many resident state tax returns that tax all the income and provide a credit for taxes paid to another state.
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Yeah, Different states 'administer' it differently, but the bottom line is you can't be taxed by different States for the same piece of money. United States Supreme Court got that solved in a case of Someone vs ....drumroll.........California. California is a particularly greedy State
 
My day job employer reminds us that currently they must report to NY if we work the equivalent of two weeks per year in NY. It is on my list of places to most strongly avoid business trips to there. Just slightly behind Saudi Arabia based on experiences of coworkers over a decade ago.
 
Ventucky Red said:
Here is some information on the current law... I'll try to find the article about this when I get home..

https://www.ftb.ca.gov/individuals/fileRtn/Nonresidents-Part-Year-Residents.shtml#residency_status

https://www.sangerlaw.com/Articles/THE-PART-TIME-RESIDENT-TAX-TRAP.shtml
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Thanks. I've already read both of those and others. I've been a snowbirder for about 10 years and am on top of all that. But if you find something about changing the ad hoc 6 month test to a 3 month one I'd sure like to see it.
 
I am told by a very reliable source that about the first thing a Jeopardy! contestant does on arriving at the Culver City, CA studio is fill out a California state revenue form. California income tax at ~7% is deducted from the contestant's winnings before they are paid. All regardless of the primary residence state of the contestant. Said reliable source was not amused.
 
Tax is generally paid where earned, not where you live. There are exceptions as noted above regarding pilots. My dad lived in Illinois and worked in Indiana. He paid Indiana income tax. But Illinois also passed a law that if you live in IL, you must remit to them anything not covered by another state’s lower rate. So indiana was 3ish percent and IL was 5%. He paid 3% to IN and 2% to IL.

I am a CPA but there are reasons I don’t do taxes. This thread highlights a big one.
 
Anyone want to turn to the discussion of Sales and Use Tax? You know, the (incorrect) idea that if you buy online you are not liable for the applicable use tax in your jurisdiction? I'm sure we all report those diligently, right?
 
Ravioli said:
Anyone want to turn to the discussion of Sales and Use Tax? You know, the (incorrect) idea that if you buy online you are not liable for the applicable use tax in your jurisdiction? I'm sure we all report those diligently, right?
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Does anyone pay Use Tax for personal things purchased online? I've never heard of anyone doing it, curious if anyone does...?

In business, we never paid Use Tax for things purchased online... Not because we were trying to skate around, or screw the system, but because we never thought about it. A Sales and Use Tax audit brought it to our attention. We don't buy things online to get out of paying Use Tax... We do it for ease and speed to get the item. It adds a whopping 30 seconds to the transaction, and the extra cost of Use Tax generally doesn't really matter.

Somehow, I can't see anyone going through the effort to contact the state to see how to take care of it, buying personal items...
 
Ravioli said:
Anyone want to turn to the discussion of Sales and Use Tax? You know, the (incorrect) idea that if you buy online you are not liable for the applicable use tax in your jurisdiction? I'm sure we all report those diligently, right?
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And how about that stuff ya buy at Garage sales and off Craigslist and etc
 
Groundpounder said:
If you fly for an "air carrier", i.e. a 121 or 135 operator, you pay the income tax of the state you reside in. If you fly 91, you pay income tax of where your employer is based, but you are exempt of income tax when you are outside of that state flying for work. The reporting for the exemption for people operating under 91 can be tricky. I used to have the reference saved on my computer but I can't find it right now and I am a little busy.
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Wrong answer. Just ask any 121 pilot based in the socialist state of California. You get some back but you still pay California even if you live elsewhere if 50 percent of your flying is in ca airspace.
 
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Ventucky Red said:
I always thought the tax was for the state in which you reside... hence a lot of New Yorkers taking residence in Florida, and Californians taking residence in Washington or other non income tax states but still living in NY and CA

I believe in California they have been trying to change the law to minimize the residency, that is, if you're at your "vacation home" in California for more that three months of the year you're paying California state income tax...
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If you have a home in another state and you want to Claim residency of the other state you better live in the other state for 180+ day of each year or komnifornia is going to stick it to you.
 
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luvflyin said:
Yeah, Different states 'administer' it differently, but the bottom line is you can't be taxed by different States for the same piece of money. United States Supreme Court got that solved in a case of Someone vs ....drumroll.........California. California is a particularly greedy State
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No kidding, they tried to tax me while I was stationed there. Said, "I paid taxes to my home state and was not a resident" They said, "Prove it." I said you're the one making the claim that I was, you prove it." They said, "you live at this address, now pay up." I said, "that is a military base address, despite being stationed there I retain my original state of residency. Thanks for proving that I wasn't a resident." Since they had calculated the amount I owed them, I assumed they had seen my W2 and already knew I had money deducted for my home of record income tax. They were just trying to shake me down, wonder how many other service members didn't know any better and paid.

luvflyin said:
And how about that stuff ya buy at Garage sales and off Craigslist and etc
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Yeah I believe that items should only be taxed once not every time the item exchanges hands. Taxing cars every year and every time you buy fuel is ridiculous. I had one state that tried to force me to buy tags for a track day car that was never driving on the street, they would drive around looking for cars in driveways without tags and then send a letter certified mail. Never mind the trailer and the tow vehicle both had tags. Also feel like racers should be able to purchase tax free fuel at the track similar to off road diesel for farming.
 
luvflyin said:
Aghhh. 3 months!!!? Do you have any links to this?
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It was on this website a while back... these guys monitor the tax and spend communist is Sacramento... you may want to sign up for their newsletter if you want to keep an eye on it..

https://www.hjta.org/


luvflyin said:
California is a particularly greedy State
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Greedy in not the word I would use... and I'll keep it polite for now..:mad:
 
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