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February 2, 2009

Congressional Research Service

Report 95-895

State Income Taxation of Military Personnel and United

States Citizens Residing Outside of the United StatesKerstin Roper and John R. Luckey, American Law Division

Updated July 24, 2003

Abstract. This report examines and summarizes the laws of the fifty states and the District of Columbiarespecting the taxation of income of United States citizens domiciled within the state but residing abroad.

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Congressional Research Service ˜ The Library of Congress

CRS Report for CongressReceived through the CRS Web

Order Code 95-895 A

State Income Taxation of Military Personneland United States Citizens

Residing Outside of the United States

Updated July 24, 2003

Kerstin RoperLaw Clerk

John LuckeyLegislative Attorney

American Law Division

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State Income Taxation of Military Personnel and UnitedStates Citizens Residing Outside of the United States

Summary

This report examines and summarizes the laws of the fifty states and the Districtof Columbia respecting taxation of income of citizens domiciled within the state butresiding abroad. It has been prepared biennially for many years.

This report is divided into an introduction and four sections. The introductionincludes a brief summary of pertinent provisions of Federal law, including 1) theSoldiers' and Sailors' Civil Relief Act (containing special provisions governing thetreatment of members of the military for domicile and state income tax purposes) and2) Internal Revenue Code provisions governing exclusion of income earned inforeign countries, which may have an impact upon state treatment of the income ofdomiciliaries residing abroad.

Section I discusses the six states (and the District of Columbia) which have nospecial credit for foreign taxes paid or some exemption for income earned abroad.The definitions of domicile and residency, the tax base and the probable income taxobligation of domiciliaries abroad are addressed. Two of these states do not taxearned income (Tennessee and New Hampshire). Tennessee taxes only income fromstocks and bonds, and New Hampshire taxes dividends and interest andunincorporated businesses.

Section II focuses on those eleven states which provide a state income tax creditfor foreign income tax paid. Statutory language is summarized for each of thesestates. In a number of cases the statutes provide for a credit for taxes outside the state( to other states and to foreign countries).

Section III summarizes the provisions of law in those twenty-six states thatexclude some foreign source earned income from state taxation, following federallaw on the subject.

Section IV lists the seven states which have no income tax.

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Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. States with No Foreign Tax Credit or Exemption Provision . . . . . . . . . . . . . . . 3Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4District of Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5New Hampshire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

II. States Granting an Income Tax Credit for Foreign Income Tax Paid . . . . . . . . 8Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Massachusetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Montana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17North Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

III. States Exempting Income Earned Abroad to the Same Extent as Federal Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Connecticut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Kentucky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Maryland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Nebraska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38NorthDakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

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95Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Vermont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47West Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

IV. States Having No Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50South Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

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State Income Taxation of Military Personneland United States Citizens Residing Outside

of the United States

Introduction

This report examines and summarizes the laws of the fifty states and the Districtof Columbia respecting the taxation of income of United States citizens domiciledwithin the state but residing abroad. The report is divided into four substantivesections. Section I discusses the law of states with no foreign tax credit or exemptionprovision. Section II analyzes the laws of states which grant an income tax credit forforeign income tax paid to a foreign country. In many cases, these states merelypermit credit of any taxes paid outside of the state, whether to other states or toforeign governments. Section III describes the laws of the states which exemptincome earned abroad to the same extent as such income is exempted by federal law.Section IV lists the seven states which have no income tax. Since no income tax isimposed, there can really be no substantive discussion of the treatment of UnitedStates citizens domiciled in the state but residing abroad. States which tax onlycertain types of income, such as dividends and interest (see discussions of NewHampshire and Tennessee), are discussed under the general tax provisions in SectionI.

The first three sections are divided into a discussion of the definitions ofdomicile and residency for state income tax purposes, the tax base used by the state,and the probable income tax obligation in each of these states for domiciliariesresiding abroad. In addition, special note is made where state domicile or residencyis determined in whole or in part by voting within the state and where special rulesapply to military personnel.

In regard to the special rules applicable to military personnel, a number of statesmerely refer to the tax provisions of the Soldiers' and Sailors' Civil Relief Act of1940, presently found at 50 U.S.C. App. 574. Generally, this section provides thatfor state income tax purposes, an individual does not lose domicile in a specific statesolely "by reason of being absent therefrom in compliance with military or navalorders . . . . " The same law also provides that, for state income tax purposes, anindividual does not acquire residence or domicile solely because of location undermilitary orders. The Act further states that, where an individual is not deemed toreside or be domiciled in a state, military income will be treated by that state as non-resident income not earned within the state.

Section 911 of the Internal Revenue Code (IRC) permits United States citizenswho reside abroad to exclude from their gross income up to $80,000 of foreignearned income in tax year 2003 and a certain recognized amount for housing. This

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exclusion applies to taxpayers living abroad who were present in a foreign countryor countries for 330 days out of any 12 consecutive months. The housing cost amountis the excess of the taxpayer's expenses over a base housing amount. The basehousing amount is equal to 16 percent of the salary of a GS-14 governmentemployee. As of January 1, 2003, this salary is $72,381 so that the current basehousing amount would be $11,580.96. Housing costs provided by an employer mayalso be excluded from the gross income of the employee. In line with this, IRC § 119provides that lodging furnished in an overseas camp may be excluded from theemployee's income. It should be noted that neither exclusion is applicable to wagespaid by the United States government even if the Federal employee is residingabroad.

Most states, and the District of Columbia, have signed agreements with theTreasury Department which provide for the withholding of state income taxes fromthe pay of service members. The text of the standard agreement may be found at 31CFR § 215.6 - 13 (2001). The following states do not have standard agreements withthe Treasury Department to withhold state income taxes from the pay of members ofthe armed services: Alaska, Florida, Nevada, South Dakota, Texas, Washington, andWyoming.

The information contained in this report is accurate through the end of the 2002legislative session of each state.

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I. States with No Foreign Tax Credit or Exemption Provision

STATE INCOME TAX COVERAGE TAX BASEPROBABLE TAX

OBLIGATION

Alabama Domicile, maintaining a permanent place of abode withinthe State, or spending in the aggregate more than sevenmonths of the year within the State. Ala. Code tit. 40, § 18-2(7).

Voting in Alabama is a factor considered by the courts indetermining whether an individual is domiciled in Alabamafor tax purposes. State ex rel. Rabren v. Baxter, 46 Ala.App. 134, 239 So. 2d 206 (1970).

The Alabama Tax Regulations state that military personneldomiciled in Alabama continue to be domiciliariesirrespective of their period of absence or actual place ofresidence until proof of change of domicile or residence hasbeen made. If domicile has changed, the burden of proof ison the taxpayer though he owns no property, earns noincome, and has no place of abode in Alabama. Ala. Tax.Regs.,§ 810-3-2-.01.

The entire net income of domiciliariesand residents as defined by the statute.Ala. Code tit. 40, § 18-2.

Non-residents taxable on income fromproperty owned or business transactedin Alabama. Ala. Code tit. 40, § 18-2(6).

Resident military personnel taxable onentire net income except incomereceived for active combat duty. Ala.Code tit. 40, § 18-3.

Non-resident military personnel arenot taxed on military pay receivedwhile stationed in Alabama.

Wives of military personnel taxable onincome earned within the State.Military personnel taxable on non-military income earned within theState.

All military retirement payments areexempt from state income taxation.Ala. Code tit. 40, § 18-20

Residents -- Subject to Stateincome tax on all income.

Non-residents -- Taxable onincome from property ownedor business transacted inAlabama.

Resident military personnel --Subject to State income tax onall income except incomereceived for active combatduty.

N o n -r e s id e n t mi l i t a r ypersonnel -- Subject to Stateincome tax on non-militaryincome earned within theState.

Wives of military personnel --Taxable on income earnedwithin the State.

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OBLIGATION

California Residents -- The term “resident” for income tax purposesincludes: (a) every individual who is in the state for otherthan a temporary or transitory purpose, and (b) everyindividual domiciled in the state who is outside the state fora temporary or transitory purpose. If such person is absentfor at least 18 months under an employment dated contractthey are not considered to be outside the state for atemporary or transitory purposes (This exception does notapply to those who receive over $200,000 in unearnedincome in a tax year). Any individual who is a resident ofthe state continues to be a resident even though temporarilyabsent from the state. An individual domiciled in Californiais absent from the state for a temporary purpose if suchabsence is by reason of (1) holding an elected or appointedoffice in the Federal Government or (2) working on the staffof an elected officer of the legislative branch of the U.S.Government. Cal. Rev. & Tax Code § 17014.

Every individual who spends in the aggregate more thannine months of the taxable year within the state is presumedto be a resident. Cal. Rev. & Tax Code § 17016

The entire taxable income of a residentof the state. Cal. Rev. & Tax Code §17041(a). The entire taxable incomeof a non-resident of the state which isderived from sources within the state.Cal. Rev. & Tax Code § 17041(b).

Non-resident military personnel arenot taxed on military income receivedwhile stationed in California. Spousesof military personnel taxable onincome derived from sources withinthe state.

Gross income shall not includecompensation for military serviceperformed by a non-resident andattributable to a resident spouse solelyby application of any communityproperty law or rule. Cal. Rev. & TaxCode § 17140.5.

Military hazardous duty pay which isexempt under IRC § 112 is specificallyexempt from the state income tax.Cal. Rev. & Tax Code § 17142.5

Residents -- Subject to stateincome tax on all taxableincome. Non-residents --Subject to state income tax onall taxable income derivedfrom sources within the state.

Resident military personnel --Subject to state income tax onall taxable income.

No n -r e s i d e n t mi l i t a r ypersonnel -- Subject to statetax on non-military taxableincome derived from sourceswithin the state.

Wives of military personnel --Subject to state income tax onall taxable income derivedfrom sources within the state.

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OBLIGATION

District ofColumbia

Residents -- The term “resident” is defined as everyindividual domiciled within the District on the last day ofthe taxable year, and every other individual who maintainsa place of abode within the District for more than 183 daysof the taxable year, whether domiciled in the District or not.D.C. Code tit. 47, § 1801.4. Under an earlier District ofColumbia tax law, the Supreme Court held that whether ornot a person votes where he claims domicile is highlyrelevant, but by no means controlling on the questionwhether he is domiciled in the District of Columbia, nor isfailure to vote elsewhere conclusive that domicile is in theDistrict. District of Columbia v. Murphy, 314 U.S. 441(1941); see also District of Columbia v. Woods, 465 A.2d385 (1983).

See Soldiers' and Sailors' Civil Relief Act.

The entire net income of residents.D.C. Code § 47-1806.1.

The District of Columbia is precludedfrom levying a non-resident incometax by Public Law 93-198, 602(a), 87Stat. 813; D.C. Code § 1-233(a)(5); §47-1801.4.

See IRC § 104(a)(4).

Residents -- Subject to D.C.income tax on net income.

Non-residents -- Not subjectto the income tax.

Military personnel -- Notsubject to income tax onpensions or annuities up to$3000. D.C. Code § 47-1803.2

Mississippi Residents and non-residents -- The term “resident” isdefined as any person domiciled in the state and any otherperson who maintains a legal or actual residence within thestate. Miss. Code § 27-7-3(e).

The term “non-resident” is defined as any natural personwhose domicile and place of abode is without the state.Miss Code § 27-7-3(f). The Mississippi Tax Regulationsdefine “legal resident” as one who maintains a place ofabode in Mississippi or who exercises legal rights such asvoting. One can be a legal resident though domiciledelsewhere. Miss. Tax Reg. 1.27-7-3(5)(c); State TaxCommission of the State of Mississippi v. Earnest, 627So.2d 313 (1993).

The entire net income of residents.Miss. Code § 27-7-5. The entire netincome of non-residents from sourceswithin Mississippi. Miss. Code § 27-7-15(3).

Mississippi excludes from grossincome: (1) the first $500 per monthreceived as compensation for activeservice in a combat zone or duringhospitalization as a result of suchservice and; (2) hazardous duty combatpay to members of the armed forces.Miss. Code § 27-7-15(4)(j), (n).

Residents -- Subject to tax ontheir entire net income.

Non-residents -- Subject to taxon their entire net incomef r o m s o u r c e s w i t h i nMississippi.

Military personnel -- Notsubject to income tax on: (1)the first $500 per monthcompensation for activeservice in a combat zone orduring hospitalization as aresult of such service and (2)hazardous duty combat pay.

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OBLIGATION

Mississippi(Continued)

The Mississippi Tax Regulations state that members of thearmed forces who claim Mississippi as their state of legalresidence/domicile are liable for Mississippi income tax ontheir income. Non-resident members of the armed forcesstationed in Mississippi who realize income from non-military sources within the state must file a non-residentIndividual Income Tax Return. Miss. Tax Regs. § 1.27-7-15(34).

The entire income of spouses ofmilitary personnel of non-military payfrom sources within Mississippi istaxable. Miss. Tax Regs. § 1.27-7-15(34).

Spouses of military personnel-- Subject to tax on non-military pay from sourceswithin Mississippi.

NewHampshire

Taxes inhabitants or residents on interest and dividendincome. N.H. Rev. Stat. Ann. § 77:3.

Interest and dividend income over$2,400 per year. N.H. Rev. Stat. Ann.§ 77:5.

No mention is made of militarypersonnel.

Inhabitants or residents --Subject to tax on interest anddividends over $2,400.

New Jersey Residents -- “Residents” means (1) domiciliaries unlessthey maintain no permanent place of abode in the state,maintain a permanent place of abode elsewhere, and spendan aggregate of not more than 30 days in the state or (2)persons not domiciled in New Jersey who maintain apermanent place of abode in the state and spend anaggregate of more than 183 days in the state, unless suchindividual is in the armed forces of the United States. N.J.Stat. Ann.§ 54A:1-2(m).

Residents -- New Jersey gross incomeas defined by statute. N.J. Stat. Ann. §54A:5-1.

Non-residents -- Specified categoriesof New Jersey gross income to theextent they are earned, received oracquired from New Jersey sources.N.J. Stat. Ann. § 54A:5-8.

Resident -- Subject to tax ontheir entire New Jersey grossincome.

Non-residents -- Subject to taxon the specified categories ofNew Jersey gross incomefrom New Jersey sources.

Military personnel -- Resident- subject to tax on entireincome.

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OBLIGATION

New Jersey(Continued)

Non-residents -- “Non-resident” means a taxpayer who isnot a resident. N.J. Stat. Ann.§ 54A:1-2(n).

New Jersey excludes from grossincome: (1) pensions and annuities forpersonal injuries or sickness resultingfrom active service in the armed forcesof the United States; (2) compensationfor service in the armed forces of theUnited States to an individual notdomiciled in New Jersey; (3)mustering-out payments to members ofthe armed forces of the United States;and military pensions and survivorbenefit payments. N.J. Stat. Ann. §§54A:6-6, 6-7, and 6-26.

Non-resident -- not subject totax on military income.Subject to tax on specifiedNew Jersey gross incomefrom New Jersey sources.

Tennessee Persons in the state -- The term “person” is defined as everynatural person, inhabitant, resident (any person who has alegal domicile in Tennessee), and every person whomaintains a place of residence for more than six months inthe tax year (regardless of what place such person mayclaim as legal domicile). Tenn. Code § 67-2-101(5).

(1) The income of persons in the Statefrom dividends on stock and intereston bonds. Tenn. Code Ann. § 67-2-102.

No interest or penalties may beassessed against service memberserving in combat zone or hospitalizedas result of injury in a combat zone.Tenn. Code § 67-2-114(a).

Persons in the state -- Subjectto tax on dividends from stockand interest on bonds.

Resident military -- Subject totax on dividends from stockand interest on bonds.

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II. States Granting an Income Tax Credit for Foreign Income Tax Paid


OBLIGATION

Arizona Residents and certain non-residents --The term“resident”includes: (1) every individual who is in the state for otherthan a temporary or transitory purpose, and (2) everyindividual domiciled in the state who is outside the statefor a temporary or transitory purpose. Every individualwho spends in the aggregate more than nine months of thetaxable year within the state is presumed to be a resident.Ariz. Rev. Stat. Ann. §§ 43-104(14), 43-104(19).

See Soldiers' and Sailors' Civil Relief Act. 50 U.S.C.App. § 574.

The entire taxable income of everyresident and the entire taxable incomeof every non-resident which is derivedfrom sources within the state. Ariz.Rev. Stat. Ann. § 43-1011. SinceArizona computes its own taxableincome from federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC for income fromsources without the United States areapparently adopted by into thecomputation of Arizona taxableincome. Any combat pay not alreadyexcluded by § 112 of the IRC isspecifically excluded . Ariz. Rev. Stat.Ann. § 43-1022(19).

Residents are allowed a credit only fortaxes paid to the other state or countryon income derived from sources withinthat state or country which is taxableunder the foreign laws without regardto the residence or domicile of therecipient. No credit is allowed if theother state or country allows residentsof Arizona a credit against taxesimposed by that state or country fortaxes paid to Arizona. Ariz. Rev. Stat.Ann. § 43-1071.

Residents -- Subject to tax onentire net income with §§ 911-912 and § 112 exclusions andthe possibility of receiving acredit for foreign taxes paid.

Non-residents -- Subject to taxon net income derived fromsources within Arizona withthe possibility of receiving acredit for foreign taxes paid onsuch income.

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OBLIGATION

Arizona(Continued)

Non-residents are allowed a creditagainst Arizona taxes on incomederived from sources within Arizonaonly if (1) the foreign country does nottax income of residents of Arizonaderived from sources within thatcountry or (2) allows residents ofArizona credit against taxes imposedby that country on such income fortaxes paid to Arizona. Ariz. Rev. Stat.Ann. § 43-1096.

Hawaii Residents and certain non-residents -- A “resident” isdefined as every individual who resides in the state forother than a temporary or transitory purpose. Everyindividual who is in the state more than 200 days of thetaxable year in the aggregate is presumed to be a resident.This presumption may be overcome by evidencesatisfactory to the Department of Taxation that theindividual maintains a permanent place of abode outsideof the state and is in the state for a temporary or transitorypurpose. No person shall be deemed to have gained orlost a residence simply because of his presence or absencein compliance with military or naval orders. Haw. Rev.Stat. § 235-1.

The entire income of all residents. Theincome received or derived fromproperty owned, personal servicesperformed, trade or business carriedon, and any and every other source inthe state by a non-resident. Haw. Rev.Stat. § 235-4(a), (b). Because Hawaiicomputes its own taxable income fromfederal adjusted gross income, theexclusions under § 911 of the IRC forincome from sources without theUnited States are apparently adoptedinto the computation of Hawaii taxableincome. Section 912 exclusions arespecifically added back into Hawaiiadjusted gross income. Haw. Rev. Stat.§ 235-7(b).

Residents -- Subject to tax onall income with § 911 and §112 exclusions, and with thepossibility of a credit forforeign taxes paid.

Non-residents -- Subject to taxon income derived fromsources within Hawaii, withthe possibility of a credit forforeign taxes paid.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation with theexclusion of combat pay.

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OBLIGATION

Hawaii(Continued)

Residents are allowed a credit for taxespaid to an other state or country, whichare paid on income derived fromsources outside the state. The credit isnot allowed for taxes paid on incomeexcluded under § 911. Haw. Rev.Stat. § 235-55(a).

Because Hawaii computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently incorporated intothe computation of Hawaii taxableincome.

The first $1,750 of income to membersof the armed forces reserves is alsoexcluded from gross income. Haw.Rev. Stat. § 235-7(a)(7)

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OBLIGATION

Indiana Residents and non-residents -- The term “resident” isdefined as any individual who was domiciled in the stateduring the taxable year, or any individual who maintainsa permanent place of residence in the state and spendsmore than 183 days of the taxable year within the state.Ind. Stat. § 6-3-1-12.

The term “non-resident” is defined as any person who isnot a resident of Indiana. Ind. Stat. § 6-3-1-13.


The entire federal adjusted income ofresidents, with adjustments not hereinrelevant. Ind. Stat. § 6-2.1-2-2.

Since Indiana computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States areapparently adopted into thecomputation of Indiana taxableincome. Ind. Stat.§ 6-2.1-2-2. Thefederal adjusted gross income of non-residents derived from sources withinIndiana. Ind. Stat. § 6-2.1-2-2.

Indiana also gives its residents andnon-residents a credit against Indianaincome tax for taxes paid to anotherstate or foreign country on incomesubject to tax in Indiana. Ind. Stat. §§6-3-3-3, 6-3-1-25.

Indiana allows a deduction of $2,000per year from adjusted gross incomefor individuals who are members ofthe United States armed forces.Military retirees over 60 years of agemay deduct $2,000 in retirement orsurvivors' benefits. Ind. Stat. § 6-3-2-4.

Residents -- Subject to tax onfederal adjusted gross income(above the exclusions under§§ 911-912 of the IRC) withthe possibility of a credit forforeign taxes paid.

Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin Indiana, with thepossibility of a credit forforeign taxes paid.

Military personnel andmerchant marine -- Subject totax on military compensationwith stated exclusions.

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OBLIGATION

Iowa Residents and non-residents -- The term “resident” isdefined as any individual domiciled in the state, and anyother individual who maintains a permanent place ofabode with the state. Iowa Code § 422.4(15). The term“non-resident” includes all individuals who are notresidents. Iowa Code § 422.4(10).

The Iowa tax regulations state that unless there isevidence to the contrary, one will be presumed to bedomiciled in the state if he or she exercises the right tovote, uses homestead credit or military exemption, orotherwise exercises his or her rights to suffrage. IowaTax Regs. subrule 38.1(9); In the Matter of Fox, 1996Iowa Tax LEXIS 1996.


The entire income of the residentsdefined as federal adjusted grossincome, with certain adjustments notherein relevant. Iowa Code § 422.7.Since Iowa computes its own netincome from federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC for income fromsources without the United States areapparently adopted into thecomputation of Iowa net income.

The net income of non-residentsderived from sources within Iowa.Iowa Code §§ 422.5(j); 422.8(2).

Iowa also provides a credit againstIowa tax for taxes paid to another stateor foreign country on income subjectto tax in Iowa. Iowa Code § 422.8(1).

Since Iowa computes its own taxableincome from federal adjusted grossincome, the exclusion under § 112 ofthe IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is apparentlyadopted into computation of Iowataxable income. Iowa Code § 422.7

Residents -- Subject to tax onfederal adjusted gross income(above the exclusions under§§ 911-912 of the IRC) withthe possibility of a credit forforeign taxes paid.

Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin Iowa, with thepossibility of a credit forforeign taxes paid.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation with statedexclusions.

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OBLIGATION

Maine Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in Maine; orwho is not domiciled in Maine, but maintains a permanentplace of abode in Maine and spends in the aggregate morethan 183 days of the taxable year in this state, unless he isin the armed forces of the United States. Me. Rev. Stat.tit. 36 § 5102.

The term “non-resident” is defined as an individual whois not a resident. Me. Rev. Stat. tit. 36 § 5102.


The taxable income of residents isdefined as federal adjusted grossincome allocated to state sources withcertain modifications not hereinrelevant. Since Maine computes itsown taxable income from federaladjusted gross income, the exclusionsunder §§ 911-912 of the IRC forincome from sources without theUnited States are apparently adoptedinto the computation of Maine taxableincome. Me. Rev. Stat. tit. 36 § 5121.

The portion of federal adjusted grossincome of non-residents derived fromsources within the state. Me. Rev.Stat. tit. 36 § 5142.

A resident is allowed a tax credit fortaxes paid to another state or foreigncountry. Me. Rev. Stat. tit. 36 §5217A.

If a taxpayer is regarded as a residentof Maine and another jurisdiction forthe purpose of personal incometaxation, the tax assessor shall reducethe tax on that portion of the taxpayer'sincome which is subjected to tax inboth jurisdictions, provided that theother taxing jurisdiction allows asimilar reduction. Me. Rev. Stat. tit.36 § 5128.

Since Maine computes its own taxableincome from federal adjusted gross

Residents -- Subject to tax ontaxable income in excess ofthe exclusions under §§ 911-912 of the IRC with thepossibility of a reduction oftaxes for taxes paid to anotherjurisdiction.

Non-residents -- Subject to taxon the portion of federaladjusted gross income derivedfrom sources within Mainewith the possibility of areduction in taxes for taxespaid to another jurisdiction.


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OBLIGATION

Maine(Continued)

the IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is apparentlyadopted into the computation ofMaine taxable income. Me. Rev. Stat.tit. 36 § 5121.

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OBLIGATION

Massa-chusetts

Residents and certain non-residents --The term“resident”or inhabitant is defined as (1) any natural persondomiciled in the Commonwealth or (2) a non-domicilednatural person who has a permanent place of abode andspends over one hundred and eighty three days in theCommonwealth. The term “non-resident” is defined asany natural person whose domicile is outside theCommonwealth. Mass. Gen. L. Ann. ch. 62, § 1(f).

The Massachusetts Board of Tax Appeals has ruled thatchange of domicile from the Commonwealth to a foreigncountry requires greater proof of intent to abandondomicile than a change of domicile between states of theUnited States. Farr v. Commissioner, 1 Mass. B.T.A. 467(1932).


The taxable income of residentsdefined as federal adjusted grossincome. However, Massachusetts doesnot allow the exclusion of incomefrom sources without the United Statesin the computation of Massachusettstaxable income. Mass. Gen. L. Ann.ch. 62 § 2(a)(1)(C). Massachusettsallows a credit for taxes paid to otherstates or the Dominion of Canada orany of its provinces, with certainlimitations. Mass. Gen. L. Ann. ch. 62§ 6(a).

The portion of federal adjusted grossincome of non-residents derived fromsources within Massachusetts. Mass.Gen. L. Ann. ch. 62 § 5A(a).

The compensation paid to militarypersonnel for active duty shall bedeemed to be from sources other thansources within the Commonwealth.Mass. Gen. L. Ann. ch. 62 § 5A(c).

Residents -- Subject to tax onfederal adjusted gross incomewithout the exclusion under §911 of the IRC for incomederived from sources withoutthe United States. A credit fortaxes paid to other states orCanada or its provinces isallowed.

Non-residents -- Subject to taxon the portion of federaladjusted gross income derivedf r o m s o u r c e s w i t h i nMassachusetts.

M i l i t a r y p e r s o n n e l - -Compensation paid to militarypersonnel for active duty shallbe deemed to be from sourcesother than sources within theCommonwealth.

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OBLIGATION

Montana Residents and non-residents -- The term “resident” isdefined as any natural person domiciled in the state orwho maintains a permanent place of abode within thestate even though temporarily absent from the state andwho has not established a residence elsewhere. Mont.Code tit. 15 § 30-101(16).


(1) The entire adjusted gross income ofresidents defined as federal adjustedgros s income wi th cer ta inmodifications not herein relevant.Since Montana defines its adjustedgross income in terms of federaladjusted gross income, the exclusionsunder §§ 911-912 of the IRC forincome from sources without theUnited States are apparently adoptedinto the computation of Montanaadjusted gross income. Mont. Code tit.15 § 30-111.

(2) The entire earned income of non-residents derived from sources withinMontana. Mont. Code tit. 15 § 30-131.

(3) Montana excludes remunerationpaid for active service as a member ofthe armed forces of the United Statesfrom the definition of taxable wagesfor residents. Mont. Code tit. 15 § 30-116(2).

Residents are allowed a credit for taxespaid to other states or foreigncountries. Mont. Code tit. 15 § 30-124.

Residents -- Subject to tax onfederal adjusted gross incomeabove the exclusion of §§ 911-912 of the IRC. Foreign creditis allowed.

Non-residents -- Subject to taxon net income derived fromsources within Montana.

Military personnel -- Notsubject to tax on militarycompensation.

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OBLIGATION

New Mexico Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in the stateduring any part of the taxable year. Any person who, onor before the last day of the taxable year, changes hisplace of abode to a place without the state with the bonafide intention of continuing actually to abide permanentlywithout the state is not a resident. N. Mex. Stat.§ 7-2-2(S).

The term “non-resident” is defined as every individual nota resident of the state. N. Mex. Stat.§ 7-2-2(Q).


(1) The net income of every residentdefined in terms of federal taxableincome with certain modifications notherein relevant. Since New Mexicodefines its tax base in terms of federaltaxable income, the exclusions under§§ 911-912 of the IRC for incomederived from sources without theUnited States are apparently adopted.N. Mex. Stat. § 7-2-3.

(2) The net income of every non-resident derived from sources withinNew Mexico. N. Mex. Stat. § 7-2-3.New Mexico defines “state” to includeforeign country. N. Mex. Stat. § 7-2-2(U).

(3) New Mexico also allows residentsa credit for taxes paid to another state.N. Mex. Stat. § 7-2-13.

Since New Mexico computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted into thecomputation of New Mexico taxableincome. N. Mex. Stat. § 7-2-2.

Residents -- Subject to tax onnet income above theexclusions under §§ 911-912of the IRC with the possibilityof a credit for taxes paid toanother state.

Non-residents -- Subject to taxon net income derived fromsources within New Mexico.


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OBLIGATION

NorthCarolina

Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in the state forother than a temporary or transitory purpose. Absentother evidence, residence in the state for over 183 days ofthe taxable year raises the presumption that the individualis a resident. N.C. Gen. Stat. § 105-134.1(12).

The term “non-resident” is defined as any individual whois not a resident. N.C. Gen. Stat. § 105-134.1(9).


(1) The net income of residents asdefined under N.C. Gen. Stat. § 105-134.5(a). Because North Carolinadefines its adjusted gross income interms of federal adjusted gross income,the exclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation of NorthCarolina adjusted gross income

(2) The net income of non-residentsfor income derived from sourceswithin North Carolina. N.C. Gen. Stat.§ 105-134.5(b).

North Carolina allows its residents acredit against taxes paid to anotherstate or foreign a country in certaininstances. N.C. Gen. Stat. § 105-151.

Residents -- Subject to tax onnet income with the possibilityof a tax credit for taxes paid toanother state or foreigncountry.

Non-residents -- Subject to taxon net income derived fromsources within North Carolina.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation.

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OBLIGATION

Oregon Residents and non-residents -- The term “resident” isdefined as: (1) an individual who is domiciled in this stateunless he (A) maintains no permanent place of abode inthis state, (B) does maintain a permanent place of abodeelsewhere, and (C) spends in the aggregate not more than30 days in the taxable year in this state; or (2) anindividual who is not domiciled in this state, butmaintains a permanent place of abode in this state andspends in the aggregate more than 200 days of the taxableyear in this state, unless he proves that he is in the stateonly for a temporary or transitory purpose. Ore. Rev.Stat. § 316.027(1)(a), (b).

A non-resident is an individual who is not a resident. Ore.Rev. Stat. § 316.022(4).

(1) The entire taxable income ofresidents defined as federal taxableincome with certain modifications notherein relevant. Since Oregon definesits own taxable income in terms offederal taxable income, the exclusionsunder §§ 911-912 of the IRC forincome from sources without theUnited States are apparentlyincorporated into the computation ofOregon taxable income. Ore. Rev.Stat. §§ 316.007, 316.037.

(2) The taxable income of non-residents derived from sources withinOregon. Ore. Rev. Stat. §§ 316.117,316.127.

Oregon also gives to residents a creditagainst Oregon income taxes for taxesimposed on the taxpayer by anotherstate. Ore. Rev. Stat. § 316.082.

A modified foreign tax credit isallowed. Ore. Rev. Stat. § 316.690.

(3) Oregon subtracts from federaltaxable income the first $3,000 ofincome compensation (other thanpension or retirement pay) for activeservice in the Armed Forces of theUnited States. All compensation forthe initial and concluding years ofactive service in the Armed Forces ofthe United States is deducted fromadjusted gross income. Ore. Rev.

Residents -- Subject to tax onfederal taxable income abovethe exclusions under § 911-912 of the IRC and with thepossibility of a credit forforeign taxes paid.

Non-residents -- Subject to taxon federal taxable incomederived from sources withinOregon.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation above the first$3,000.

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OBLIGATION

Pennsylvania Residents and non-residents -- The term “resident” isdefined to include both (1) domiciliaries, unless thedomiciliary maintains no permanent place of abodewithin the Commonwealth, maintains a permanent placeof abode outside the Commonwealth and resides withinthe Commonwealth for less than thirty days of the taxableyear, and (2) non-domiciliaries maintaining a permanentplace of abode within the Commonwealth for more than183 days of the taxable year. Pa. Stat. tit. 72 § 7301(p).

“Non-resident” is defined as any individual who is not aresident. Pa. Stat. tit. 72 7301(m).


(1) The entire income of residentsdefined under Pa. Stat. tit. 72 § 7303.

(2) The income of non-residentsderived from sources withinPennsylvania. Pa. Stat. tit. 72 § 7303.

Pennsylvania allows residents a creditfor taxes paid to another state orforeign country on income also subjectto tax in Pennsylvania. Pa. Stat. tit. 72§§ 7301(t), 7314.

Military compensation for active dutyperformed outside of Pennsylvania isexempt from taxation. Pa. Stat. tit. 72§ 7303(a)(1).

Residents -- Subject to tax onincome with a credit for taxespaid to another state or foreigncountry on income alsosubject to tax in Pennsylvania.

Non-residents -- Subject to taxon income from sourceswithin Pennsylvania.

Military personnel -- Subjectto tax on military incomeexcept for compensation foractive duty performed outsideof Pennsylvania.

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III. States Exempting Income Earned Abroad to the Same Extent as Federal Law(Sections 911 - 912 of the IRC)


OBLIGATION

Arkansas Residents and non-residents -- The term “resident” isdefined to include any natural person domiciled in the stateand any natural person who maintains a permanent place ofabode in the state and spends in the aggregate more than sixmonths of the taxable year within the state. Ark. Code Ann.§ 26-51-102(9).

The Arkansas Tax Regulations state that a domicile doesnot end by physical absence alone and is presumed tocontinue until a new domicile is legally established. Theregulations contain a fact sheet listing the various factors tobe taken into consideration in determining whether a newdomicile has been established. The elements of a newdomicile on the fact sheet include: voter registration andexercise of suffrage during the last three elections, domicileof birth, physical presence, expressed intention, familyresidence, duty causing absence from Arkansas, statelicenses, location of substantial real and property holdings,community affiliations, business interests, bulk or necessarypurchases, utility or telephone deposits, and local taxes andlicenses. Ark. Tax. Reg., Art. 1.84-2002(10). TheArkansas Tax Regulations state that any resident member ofthe armed forces who at the time of the induction into suchservice was a resident of this state, continues to be aresident of this state, even though he or she has beeninducted into the armed service outside of the state and doesnot return to the state until after such service is ended. Amember of the armed service who at the time of inductionwas a resident in any state other than Arkansas is forincome tax purposes a non-resident even though he wasinducted into the service within Arkansas and he remains in

The entire income of every resident asdefined by the statute. Ark. Code Ann.§ 26-51-201(a).

The exclusion and allowance of IRC§§ 911 & 912 as they were in effect onJanuary 1, 1989 are specificallyadopted for purposes of computingArkansas income tax. Ark. Code Ann.§ 26-51-310.

The entire net income of non-residentsfrom all property owned, and fromevery business, trade or occupationcarried on in Arkansas. Ark. CodeAnn. § 26-51-202(a).

Resident military personnel taxable onall income except for the first $6,000of service pay. Ark. Code Ann. § 26-51-306(a)(1). Non-resident militarypersonnel taxable on net income fromnon-military sources earned within thestate. Ark. Code Ann. § 26-51-306(b).

IRC §§ 112 and 692, concerningtaxation of combat pay and pay ofmilitary personnel for the year they diein combat, are adopted and these typesof income are not included in the$6,000 exemption. Ark. Code Ann. §

Residents-- Subject to stateincome taxation on federaladjusted gross income (abovethe exclusions under §§ 911-912 of the IRC).

Non-residents -- Subject tostate income tax on all netincome from sources withinthe state as previously defined.

Resident military personnel --Subject to state income tax onentire income except for thefirst $6,000 of service pay.Combat pay is exempt and allincome in the year of death incombat is exempt.

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OBLIGATION

the service within Arkansas. Ark. Tax. Reg., Art. 1.84-2010.

26-51-306(a)(4).

Colorado Resident individuals and non-residents -- The term“resident” individual means a natural person who maintainsa permanent place of abode within the state and who spendsin the aggregate more than six months of the taxable yearwithin the state. A “non-resident” individual means anindividual other than a resident individual. Colo. Rev. Stat.§ 39-22-103(8).

The Colorado Tax Regulations state that domicile is afactual matter and that the individual's intent controls. TheRegulations also state that domicile, once established, is notlost until a new domicile is established. Colo. Rev. Stat. §39-22-103(8).


The entire federal adjusted grossincome of resident individuals, withcertain modifications not hereinrelevant. Colo. Rev. Stat. § 39-22-104.Since Colorado computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States andthe exclusion under § 112 of the IRCfor compensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone are apparentlyadopted into the computation ofColorado taxable income. Colo. Rev.Stat. § 39-22-104.

The entire federal adjusted grossincome of non-resident individualsderived from sources within Colorado.Colo. Rev. Stat. § 39-22-109.

For purposes of determining incometax liability, Colorado disregards thetime period during which an individualis a member of the armed forces of theUnited States:

Resident individuals --Subjectto state income taxation onfederal adjusted gross income(above the exclusions under§§ 911-912 of the IRC).

Non-resident individuals --Subject to state income tax onfederal adjusted gross incomeattributable to sources withinColorado.

Military personnel -- Subjectto tax on military pay withstated exclusions.

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OBLIGATION

Colorado(Continued)

(1) commencing with a declaration ofwar by Congress and ending twelvemonths after the termination of thewar; and (2) when an individual isserving in an area designated as acombat zone and a period of onehundred and eighty days after suchservice. Colo. Rev. Stat. § 39-22-610.Colorado subtracts retirement pay,pensions and annuities of members ofthe armed forces to the extent includedin federal adjusted gross income notto exceed $24,000 in any one taxableyear. Colo. Rev. Stat. § 39-22-104(f).

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OBLIGATION

Connecticut Residents -- “Resident” means (1) domiciliaries unless theymaintain no permanent place of abode in the state, maintaina permanent place of abode elsewhere and spend in theaggregate not more than 30 days of the taxable year in thestate and (2) non-domiciliaries who maintain a permanentplace of abode in the state and are in the state for anaggregate of more than 183 days. Conn. Gen. Stat. Ann. §12-701(a)(1).

“Non-resident” is defined as any individual who is not aresident. Conn. Gen. Stat. Ann. § 12-701(a)(2).


The entire federal adjusted grossincome of resident individuals, withcertain modifications not hereinrelevant. Conn. Gen. Stat. Ann. §§ 12-700 and 701(a)(19) & (20).

Since Connecticut computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States andthe exclusion under § 112 of the IRCfor compensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone are apparentlyadopted into the computation ofConnecticut taxable income. Conn.Gen. Stat. Ann. § 12-700.

The entire federal adjusted grossincome of non-resident individualsderived from sources withinConnecticut. Conn. Gen. Stat. Ann. §12-700.

Resident individuals --Subjectto state income taxation onfederal adjusted gross income(above the exclusions under§§ 911-912 of the IRC).

Non-resident individuals --Subject to state income tax onfederal adjusted gross incomeattributable to sources withinConnecticut.


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OBLIGATION

Delaware Resident individuals and non-resident individuals. A“resident individual” is defined as one who is domiciled inthe state for any part of the taxable year to the extent of theperiod of such domicile; or maintains a place of abode inthe state and spends more than 183 days of the taxable yearin the state. Del. Code Ann. § 30-1103.

A “non-resident individual” is defined as one who is not aresident individual of the state. Del. Code Ann. § 30-1104.

The Delaware Superior Court has held that an individualwho had moved to Washington, D.C. to take employment,but who continued to vote in Delaware had abandoned hisDelaware domicile. The court found that the voting, whichit termed "illegal," did not prove Delaware domicile.Mitchell v. Delaware State Tax Commissioner, 42 A.2d 19(Del. Supr. Ct. 1945).


The entire taxable income of everyresident individual defined as suchindividual's federal adjusted grossincome with certain modifications notherein relevant. Del. Code Ann. §§30-1102 and 30-1105.

Since Delaware computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States andthe exclusion under § 112 of the IRCfor compensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone are apparentlyadopted into the computation ofDelaware taxable income.

The taxable income of a non-residentindividual defined as that part of hisfederal adjusted gross income derivedfrom sources within the State. Del.Code Ann. § 30-1102(a).

Resident individuals --Subject to state incometaxation on federal adjustedgross income (above theexclusions under §§ 911-912of the IRC).

Non-resident individuals --Subject to state income tax onfederal adjusted gross incomeattributable to sources withinDelaware.


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OBLIGATION

Georgia Residents and taxable non-residents -- The term “resident”is defined to include "legal residents" of the state onDecember 31 of the taxable year in question, personsresiding in the state on a "more or less regular basis" onDecember 31 of the taxable year under consideration, andpersons residing in the state in the aggregate for 183 days orpart-days for the taxable year. Ga. Code § 48-7-1(10).

“Taxable non-residents” are defined to include thefollowing: (1) every individual who is not otherwise aresident of Georgia for income tax purposes and whoregularly, and not casually or intermittently, engages withinGeorgia, himself or by means of employees, agents orpartners, in employment, trade, business, professional, orother activity for financial gain or profit, including therental of real or personal property located within Georgia orfor use within Georgia; and (2) every individual who is nototherwise a resident of Georgia for income tax purposes andwho sells, exchanges or otherwise disposes of tangibleproperty which at that time has a taxable situs withinGeorgia, or of intangible property which has acquired at thetime a business or commercial situs within Georgia."Taxable non-resident" as defined herein does not includea legal resident of another state whose only activity forfinancial gain or profit in Georgia consists of performingservices in Georgia for an employer where the remunerationfor such services does not exceed five percent of the incomereceived by such person for performing services in allplaces during any taxable year; Ga. Code § 48-7-1(11)(A)& (B).


The taxable net income of all residentsdefined as federal adjusted grossincome less items not herein relevant.Since Georgia computes its owntaxable net income on the basis offederal adjusted gross income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation ofGeorgia taxable net income. Ga. Code§ 48-7-27.

The federal exclusion under § 112 ofthe IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is specificallyadopted into the computation ofGeorgia taxable income. Ga. Code §48-7-36.

Residents -- Subject to tax onfederal adjusted gross income(above the exclusions under§§ 911-912 of the IRC).

Taxable non-residents --Subject to tax on net taxableincome derived from certainspecified activities withinGeorgia.

Military personnel -- Subjectto tax as residents on federaladjusted gross income lessspecified items.

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OBLIGATION

Idaho Residents, and part-year resident. The term “resident” isdefined as any individual who during the taxable year hasbeen domiciled in Idaho or has maintained an abode inIdaho for the entire tax year and spent more than 270 daysof that year in the state. An individual will not beconsidered a resident if during a 15 month period he isabsent from the state for at least 445 days, is not present inthe state for more than 60 days, did not maintain an abodefor his family in the state, was not absent to serve as anelected official, and did not claim Idaho as his tax home forfederal income tax purposes. Ida. Code § 63-3013.

The term “part-year resident” is defined as an individualwho has changed his domicile either to or from Idaho andwho has resided in Idaho for over a day. Ida. Code § 63-3013A .

The term “non-resident” is defined as any individual who isnot a resident or part-year resident. Ida. Code § 63-3014.


Taxable income of residents defined astaxable income under § 63 of the IRC.Since Idaho computes its taxableincome from federal taxable income,§§ 911-912 of the IRC for incomefrom sources without the United Statesare apparently adopted into thecomputation of Idaho taxable income.Ida. Code 63-3022.

The taxable income of non-residentsand part-year residents to the extent itis attributable to certain specifiedactivities within Idaho. Ida. Code §63-3026A.

Not subject to tax on active dutycompensation for services performedoutside of the state, Ida. Code § 63-3022(h), or retirement benefits, Ida.Code § 63-3022A(4).

Residents -- Subject to tax onfederal taxable income (abovethe exclusions under §§ 911-912 of the IRC).

Non-residents and part-yearresidents -- Subject to tax onfederal taxable incomeattributable to certain sourceswithin Idaho.

Military personnel -- Notsubject to tax on active dutycompensation for servicesperformed outside of the state.

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CRS-28


OBLIGATION

Illinois Residents, part-year residents -- The term “resident” isdefined as any individual who is in the state for other thana temporary or transitory purpose during the taxable year orwho is domiciled in the state, but is absent from the state fora temporary or transitory purpose during the taxable year.35 ILCS § 5/1501(20).

The term “part-year resident” is defined as an individualwho became a resident during the taxable year or ceased tobe a resident during the taxable year. 35 ILCS § 5/1501(17).

The term “non-resident” is defined as a person who is nota resident. 35 ILCS § 5/1501 (14).


The entire federal adjusted grossincome of residents, with certainmodifications not herein relevant.Since Illinois computes its own baseincome from federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC for income fromsources without the United States areapparently adopted into thecomputation of Illinois base income.35 ILCS § 5/203.

All income of part-year residents andnon-residents attributable to certainactivities within Illinois. 35 ILCS §§5/301, 304.

Illinois deducts from gross income anycompensation paid to a resident who isa member of the armed forces of theUnited States while on active duty. 35ILCS § 5/203(a)(2)(E). Compensationreceived by any resident under anygovernmental retirement or disabilityplan is also deducted from grossincome. 35 ILCS § 5/203(a)(2)(F).


Non-residents and part yearresidents -- Subject to tax onall income attributable tocertain activities withinIllinois.

Military personnel -- Illinoisdeducts from gross incomeany compensation paid to aresident who is a member ofthe armed forces while onactive duty.

Military retirees are not taxedon retirement or disabilityincome.

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OBLIGATION

Kansas Resident individuals and non-residents -- A“residentindividual” is defined as a natural person who is domiciledin the state. A natural person who spends in the aggregatemore than six months of the taxable year within the state ispresumed to be a resident. Kan. Stat. Ann. § 79-32, 109(b).

The term “non-resident” is defined as an individual otherthan a resident individual. Kan. Stat. Ann. § 79-32, 109(b).

The Kansas tax regulations state that voting is prima facieevidence of domicile in Kansas. Kan. Tax Reg. 92-12-4.


(1) The taxable income of a residentindividual defined as such individual'sfederal adjusted gross income for thet axab l e year , wi th cer ta inmodifications not herein relevant.Kan. Stat. Ann. § 79-32, 110.

(2) The taxable income of non-residentindividuals defined as that portion offederal adjusted gross income derivedfrom sources within Kansas. Kan.Stat. Ann. § 79-32, 110.

Since Kansas computes its own taxableincome from federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC for income fromsources with the United States and theexclusion under § 112 of the IRC forcompensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service are apparentlyadopted into the computation ofKansas taxable income.

Residents -- Subject to tax onfederal adjusted gross incomeabove the exclusions under §§911-912 of the IRC.

Non-residents -- Subject to taxon that portion of federaladjusted gross income derivedfrom sources within Kansas.


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OBLIGATION

Kentucky Residents and non-residents -- The term “resident” isdefined as an individual domiciled within the state or anindividual who is not domiciled in the state, but maintainsa place of abode in the state and spends in the aggregatemore than 183 days of the taxable year within the state. Ky.Rev. Stat.§ 141.010(17).

The term “non-resident” is defined as any individual who isnot a resident of the state. Ky. Rev. Stat. § 141.010(18).The Kentucky tax regulations specify that an individualwho is permitted to file a federal income tax return as anon-resident citizen, and who immediately prior to residingin a foreign country was domiciled in Kentucky, isconsidered a Kentucky resident and must file a residentindividual income tax return. Ky. Tax Reg. 103 KAR17:010. See also, the following two opinions of theKentucky Attorney General relating to this subject: Op.Atty. Gen. Ky. (July 12, 1939); Op. Atty. Gen. Ky. (May12, 1960).


(1) The entire net income of everyresident individual defined as suchindividual's federal adjusted grossincome with certain modifications notherein relevant. Ky. Rev. Stat. §141.020(1).

(2) That portion of federal adjustedgross income of non-residents derivedfrom sources within Kentucky. Ky.Rev. Stat. § 141.020(4).

Since Kentucky computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States andthe exclusion under § 112 of the IRCfor compensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service are apparentlyadopted into the computation ofKentucky taxable income. Ky. Rev.Stat. § 141.020.


Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin Kentucky.


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OBLIGATION

Louisiana Residents and non-residents -- The term “resident” isdefined as every natural person domiciled in the state, andevery other natural person who maintains a permanent placeof abode within the state or who spends in the aggregatemore than six months of the taxable year within the state.La. Rev. Stat. § 47-31.

The Louisiana Tax Regulations state that domicile is afactual determination of intent to remain in or return toLouisiana. Examples in the Regulations indicate that anindividual may spend large portions of his or her timeoutside of Louisiana without relinquishing domicile. La.Inc. Tax Regs. 31.2.


The entire federal adjusted grossincome of resident individuals, withcertain modifications not hereinrelevant. La. Rev. Stat.§ 47-293.

Since Louisiana computes its owntaxable income from federal adjustedgross income, the exclusions under §§911-912 of the IRC for income fromsources without the United States areapparently adopted into thecomputation of Louisiana taxableincome. La. Rev. Stat. § 47-293(6).

The net income of non-residentsearned or derived from sources withinthe state. La. Rev. Stat. §§ 47-241,and 47-293(7).

The gross income of militarypersonnel does not include pensions orannuities for sickness incurred in thearmed forces. La. Rev. Stat. § 47-46(4).

Military pay of non-residentservicemen stationed within Louisianais not taxable by Louisiana. SeeSoldiers' and Sailors' Relief Act,supra.


Non-residents -- Subject to taxon net income derived fromsources within Louisiana.

Resident military personnel --Subject to tax on militarycompensation except forpensions or annuities forpersonal injuries or sicknessincurred in the armed forces.

N o n -r e s i d e n t mi l i t a r ypersonnel -- Subject to tax onnon-military pay from sourceswithin Louisiana.

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OBLIGATION

Maryland Residents and non-residents -- The term “resident” isdefined as any individual domiciled in the state on the lastday of the taxable year, and every other individual who, formore than six months of the taxable year, maintains a placeof abode within the state, whether domiciled in the state ornot. Md. Tax & Rev. Code Ann. § 10-101(h).

The term “non-resident” means an individual who is not aresident. Md. Tax & Rev. Code Ann. § 10-101(g).

Evidence that a person has registered to vote in Maryland isordinarily persuasive evidence that such person is domiciledin Maryland. Comptroller of the Treasury v. Lenderking,268 Md. 613, 303 A.2d 402 (1973); Roberts v. Lakin, 340Md. 147, 665 A.2d 1024 (1995).


(1) The taxable net income of residentsdefined as federal adjusted grossincome with certain modifications notherein relevant. Since Marylanddefines its taxable net income in termsof federal adjusted gross income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into Maryland taxable income.Md. Tax & Rev. Code Ann. §§ 10-206,10-401.

(2) The portion of a non-resident'sfederal adjusted gross income derivedfrom sources within and without thestate. Md. Tax & Rev. Code Ann. §10-401.

Since Maryland computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted into thecomputation of Maryland taxableincome. Md. Tax & Rev. Code Ann.§10-401


Non-residents -- Subject to taxon the portion of federaladjusted gross income derivedf r o m s o u r c e s w i t h i nMaryland.


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OBLIGATION

Maryland(Continued)

Military residents may deduct the first$15,000 of military pay attributable tomilitary service outside the UnitedStates. This deduction is reduceddollar-for-dollar for each dollar earnedover $15,000. Md. Tax & Rev. CodeAnn.§ 10-207(p).

Military retirees with federal adjustedgross income under $22,500 maydeduct $2,500 from taxable incomesubject to certain conditions. Md. Tax& Rev. Code Ann. 10-207(q).

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OBLIGATION

Michigan Residents and non-residents -- The term “resident” isdefined as an individual domiciled in the state. “Domicile”is defined as the place where a person has his true, fixed,and permanent home and principal establishment to which,whenever absent therefrom, he intends to return, anddomicile continues until another permanent establishmentis established. If an individual lives in the state for at least183 days during the taxable year or more than ½ the daysduring the taxable year of less than 12 months, he is deemeda resident individual domiciled in the state. Mich. Comp.L. Ann. § 206.18.

Non-resident -- The term “non-resident” is defined as anyindividual who is not a resident. Mich. Comp. L. Ann. §206.14.


(1) The taxable income of residentsdefined as taxable income for federalincome tax purposes. However,Michigan generally taxes only incomeallocable to certain activities andsources within Michigan. Also, sinceMichigan defines its taxable incomefor federal income tax purposes, theexclusions for income earned withoutthe United States under §§ 911-912 ofthe IRC would apply. Mich. Comp. L.Ann. §§ 206.30, 206.110.

(2) The taxable income of non-residents to the extent allocable tosources within Michigan. Mich.Comp. L. Ann.§§ 206.51, 206.110.

Michigan allows the deduction, to theextent included in federal adjustedgross income, of compensation,including retirement benefits, receivedfor services in the armed forces of theUnited States. Mich. Comp. L. Ann.§206.30(e).

Residents -- Subject to tax onfederal adjusted gross incomeallocable to sources withinM i c h i g a n a b o v e t h eexclusions of §§ 911-912 ofthe IRC.

Non-residents -- Subject to taxon taxable income allocable tosources within Michigan.

Mi l i t a ry personnel --Michigan does not tax militarycompensation or retirementincome from service in thearmed forces.

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CRS-35


OBLIGATION

Minnesota Residents and non-residents -- The term “resident” isdefined as an individual domiciled in the state or anyindividual maintaining a place of abode within the state andwho spends over half of the tax year in Minnesota. Anindividual is not a resident for the period of time that theindividual is qualified under § 911(d)(1) of the IRC. Minn.Stat. § 290.01(7).

The Minnesota Tax Regulations state that voting inMinnesota is presumptive evidence of residence, but maybe overcome by facts contrary to the presumption ofresidence. Minn. Tax. Reg. 1.6001;


The gross income of residents definedas federal adjusted gross income withcertain modifications not hereinrelevant. Since Minnesota defines itsgross income in terms of federaladjusted gross income, the exclusionsunder §§ 911-912 of the IRC forincome from sources without theUnited States are apparently adoptedinto the computation of Minnesotagross income. Minn. Stat. §§290.01(19) et seq.

The net income of non-residentsallocable to sources within Minnesota.Min. Stat. §§ 290.01(22)(2);290.06(2c)(e).

Since Minnesota computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted intocomputation of Minnesota taxableincome. Minn. Stat. § 290.01

Residents -- Subject to tax onfederal adjusted gross incomeabove the exclusion under §§911-912 of the IRC.

Non-residents -- Subject to taxon federal adjusted grossincome allocable to sourceswithin Minnesota.


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OBLIGATION

Missouri Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in this state,unless he (1) maintains no permanent place of abode in thisstate, (2) does maintain a permanent place of abodeelsewhere, and (3) spends in the aggregate not more thanthirty days of the taxable year in this state, or who is notdomiciled in this state, but maintains a permanent place ofabode in this state and spends the in the aggregate morethan 183 days of the taxable year in this state. Mo. Stat. §143.101.

The term “non-resident” is defined as an individual who isnot a resident of this state. Mo. Stat. §. 143.101.


The Missouri taxable income ofresidents calculated on the basis offederal adjusted gross income withmodifications. Since Missouricomputes its taxable income fromfederal adjusted gross income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation ofMissouri taxable income. Mo. Stat. §143.121.

The income of non-residents derivedfrom sources within Missouri. Mo.Stat. § 143.181(1).

Since Missouri computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted intocomputation of Missouri taxableincome. Mo. Stat. § 143.121

Residents -- Subject to tax onMissouri taxable income,which excludes income fromsources without the UnitedStates in the same manner as§§ 911-912 of the IRC.

Non-residents -- Subject to taxon income derived fromsources within Missouri.

Military personnel -- Subjectto tax on payments for servicein the armed services withstated exclusions.

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CRS-37


OBLIGATION

Nebraska Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in the state orwho maintains a permanent place of abode within the stateand spends in the aggregate more than six months of thetaxable year within the state. Neb. Rev. Stat. § 77-2714.01(7).

The term “non-resident” is defined as an individual who isnot a resident of this state. Neb. Rev. Stat.§ 77-2714.01(4).


(1) The entire taxable income ofresidents defined as federal taxableincome with certain modifications notherein relevant. Neb. Rev. Stat. § 77-2716. Since Nebraska computes its taxbase in terms of federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC are apparently adopted.

(2) The federal adjusted gross incomeof non-residents derived from sourceswithin Nebraska. Neb. Rev. Stat. § 77-2733.

The federal exclusion under § 112 ofthe IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is adoptedspecifically into the computation ofNebraska taxable income. Neb. Rev.Stat. § 77-27,123.


Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin Nebraska.


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CRS-38


OBLIGATION

New York Residents and non-residents -- The term “resident” isdefined as: (1) an individual who is domiciled in the stateunless he maintains no permanent place of abode in thestate and spends not over 30 days of the taxable year withinthe state, or he is present in a foreign country for at least450 days of a 548 day period, and during such 548 dayperiod he is not in the state for more than 90 days and doesnot maintain a permanent place of abode in the state wherehis spouse or minor children are present for 90 days ormore, and other conditions, or (2) an individual who is notdomiciled in the state, but maintains a permanent place ofabode within the state and spends in the aggregate morethan 183 days of the taxable year within the state, unlesssuch individual is in active service in the armed forces ofthe United States. N.Y. Tax Law § 605(b)(1).

The term “non-resident” is defined as an individual who isnot a resident. N.Y. Tax Law § 605(b)(2).


(1) The adjusted gross income ofresidents is defined as federal adjustedgros s income wi th cer ta inmodifications not herein relevant.Since New York defines its ownadjusted gross income in terms offederal adjusted gross income, theexclusions for income earned fromsources without the United States areapparently adopted into thecomputation of New York adjustedgross income. N.Y. Tax Law. § 612.

(2) The federal adjusted gross incomeof non-residents derived from sourceswithin New York. N.Y. Tax Law §631.

Military compensation of one notdomiciled in New York is not to beconsidered income derived from NewYork sources. N.Y. Tax Law §631(e).

Since New York computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted into thecomputation of New York taxable


Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin New York.


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CRS-39


OBLIGATION

NorthDakota

Residents and non-residents -- The term “resident” isdefined as any natural person domiciled in the state and anyother natural person who maintains a permanent place ofabode within the State and spends in the aggregate morethan seven months of the income year within the state. Afull-time active duty member of the armed forces assignedto a military installation in this state, or the spouse of sucha person, is not a resident simply by reason of voting in anelection in the state. N.D. Code § 57-38-01(6).


(1) The taxable income of residentsdefined in terms of federal taxableincome with certain modifications notherein relevant. Since North Dakotadefines its own taxable income interms of federal taxable income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation of NorthDakota taxable income. N.D. Code §57-38-01.2.

Taxable income is reduced by: (a) anamount up to $1,000, received aspayment for services performed whileon active duty in the armed forces ofthe United States, as payment forattending military meetings as amember of the National Guard, or of areserve unit; and (b) any amount up to$5,000 received by any person fiftyyears or older as retired military payfor service in the United States armedforces or reserve components thereof,reduced by any amount receivedpursuant to the Federal Social SecurityAct. N.D. Code § 57-38-01.2(l).

The net income of non-residentsderived from sources within NorthDakota. N.D. Code § 57-38-03.

Residents -- Subject to tax onfederal taxable income abovethe exclusions under §§ 911-912 of the IRC.

Non-resident -- Subject to taxon net income from sourceswithin North Dakota.

Military personnel -- Taxableincome is reduced by: (a) anyamount up to $1,000, receivedby any person as payment forservices performed while onactive duty in the armed forcesof the United States, or aspayment for attending militarymeetings as a member of theNational Guard, or of areserve unit; and (b) anyamount up to $5,000 receivedby any person fifty years orolder as retired military payfor service in the United Statesarmed forces or reservecomponents thereof, reducedby any amount receivedpursuant to the Federal SocialSecurity Act.

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OBLIGATION

North Dakota(Continued)

Also, persons serving in the armedforces, except field grade and generalofficers who are stationed outside ofany state or the District of Columbiafor not less than thirty days during thetax year, shall be allowed an additionalreduction of up to $300 per month forservices performed while on activeduty at such location. N.D. Code § 57-38-01.2(1)(k);.

Also, persons serving in thearmed forces, except fieldgrade and general officers,who are stationed outside ofany state or the District ofColumbia for not less thanthirty days during the taxableyear, shall be allowed anadditional reduction of up to$300 per month for servicesperformed while on activeduty at each location.

Ohio Residents and non-residents -- The term “resident” isdefined as an individual who is domiciled in this state.Ohio Code tit. 57 § 5747.01(I). One is presumed domiciledin the state if one spent over 183 nights in the state during12 consecutive months. One is presumed not domiciled ifone spent less than 120 nights in the state during 12consecutive months.. Ohio Code tit. 57 § 5747.24.

The term “non-resident” is defined as an individual who isnot a resident. Ohio Code tit. 57 § 5747.01(J).


The adjusted gross income of residentsdefined as federal adjusted grossincome with certain modifications notherein relevant. Since Ohio defines itsown adjusted gross income in terms offederal adjusted gross income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation of Ohioadjusted gross income. Ohio Code tit.57 § 5747.01(A).


Non-residents -- Subject to taxon adjusted gross incomederived from sources withinOhio.


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OBLIGATION

Ohio(Continued)

The adjusted gross income on non-residents derived from sources withinOhio. Ohio Code tit. 57 § 5747.01.

The federal exclusion under § 112 ofthe IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is adoptedspecifically into the computation ofOhio taxable income. Ohio Code tit.57 § 5747.02.4.

Oklahoma Residents and non-residents -- The term “resident” isdefined as any individual who is domiciled in the state.Any individual who spends in the aggregate more thanseven months of the taxable year within the state shall bepresumed a resident. Okla. Stat. tit. 68 § 2353(4).

(1) The taxable income of residentsdefined on the basis of federal adjustedgross income wi th cer ta inmodifications not herein relevant.Since Oklahoma bases its taxableincome on federal adjusted grossincome, the exclusions under §§ 911-912 of the IRC for income fromsources without the United States areapparently adopted into thecomputation of Oklahoma taxableincome. Okla. Stat. tit. 68 §§ 2353(3),2355.

Residents -- Subject to tax ontaxable income above theexclusions under §§ 911-912of the IRC.

Non-residents -- Subject to taxon taxable income derivedf r o m s o u r c e s w i t h i nOklahoma.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation above the first$1,500.

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OBLIGATION

Oklahoma(Continued)

The term “non-resident individual” is defined as anindividual, other than a resident individual with specialprovisions for foreign earned income. Okla. Stat. tit. 68 §2353(4).


(2) The federal adjusted gross incomeof non-residents derived from sourceswithin Oklahoma. Okla. Stat. tit. 68 §2362.

(3) In any taxable year the first $1,500received by any person from theUnited States as salary orcompensation in any form (other thana pension) as a member of anycomponent of the armed forces of theUnited States shall be deducted fromtaxable income. Okla. Stat. tit. 68 §2358(D)(5).

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CRS-43


OBLIGATION

R h o d eIsland

Residents and non-residents -- The term “resident” isdefined to include both (1) domiciliaries, and (2) non-domiciliaries who maintain a permanent place of abodewithin the state and reside in the state for more than 183days of the taxable year other than as a member of thearmed forces of the United States. R.I. Gen. Laws § 44-30-5(a).

The term non-resident is defined as an individual who isnot a resident. R.I. Gen. Laws § 44-30-5(b).


(1) The Rhode Island income ofresidents is defined as federal adjustedgros s income wi th cer ta inmodifications not herein relevant.Since Rhode Island defines its owntaxable income in terms of federaladjusted gross income, the exclusionsunder §§ 911-912 of the IRC areapparently adopted into thecomputation of Rhode Island taxableincome. R.I. Gen. Laws § 44-30-12(a).

(2) The taxable income on non-residents derived from sources withinRhode Island. R.I. Gen. Laws § 44-30-32(a).


Non-residents -- Subject to taxon taxable income derivedfrom sources within RhodeIsland.


Since Rhode Island computes its owntaxable income from federal adjustedgross income, the exclusions under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted into thecomputation of Rhode Island taxableincome. R.I. Gen. Laws § 44-30-12.

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OBLIGATION

SouthCarolina

Resident and non-resident -- The term “resident” meansany individual who is domiciled in the state. The term“non-resident” means an individual other than a resident orpart year resident. S.C. Code § 12-6-30(2).

Resident - the entire taxable income onthe basis of federal adjusted grossincome with certain modifications,S.C. Code § 12-6-560. No exclusionunder § 912 is allowed. S.C. Code §12-6-1120(5). Non-resident - subjectto tax on property owned or businesscarried on in South Carolina. S.C.Code § 12-6-1720.

Residents -- Subject to tax ontaxable income above theexclusion under § 911 of theIRC.

Non-residents -- Subject to taxon taxable income derivedfrom sources within SouthCarolina.

Retirees may deduct up to $3,000 ofretirement income that is taxable bySouth Carolina or irrevocably chooseto defer annual retirement incomededuction until the year the taxpayerreaches sixty-five years of age. S.C.Code § 12-6-1170(1).

Since South Carolina computes its owntaxable income from federal adjustedgross income, the exclusions under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted into thecomputation of South Carolina taxableincome. S.C. Code § 12-6-560.


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OBLIGATION

Utah Residents and non-residents -- The term “resident” isdefined to include domiciliaries, and individuals notdomiciled in the state and residing within the state in theaggregate for over 183 days of the taxable year. Utah Code§ 59-10-103(j).

The term non-resident is defined as an individual who isnot a resident of the state. Utah Code § 59-10-103(g).


(1) The taxable income of residents isdefined in terms of federal taxableincome with certain modifications notherein relevant. Since Utah defines itsown taxable income in terms of federaltaxable income, the exclusions under§§ 911-912 of the IRC for incomefrom sources without the United Statesare apparently adopted into Utahtaxable income. Utah Code §§ 59-10-104 & 112.


Non-residents -- Subject to taxon taxable income derivedfrom sources within Utah.


Since Utah computes its own taxableincome from federal taxable income,the exclusion under § 112 of the IRCfor compensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is apparentlyadopted into the computation of Utahtaxable income. Utah Code §§ 59-10-104 & 116.

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OBLIGATION

Vermont Residents -- The term “resident” is defined to include both(1) domiciliaries, and (2) non-domiciliaries who maintaina permanent place of abode within the state and residewithin the state for more than 183 days of the taxable year.Vt. Stat. tit. 32 § 5811(11)(A)(i), (ii).

Non-resident -- anyone not a resident. Vt. Stat. tit. 32 §5811(9).


(1) The adjusted gross income ofresidents is defined as federal adjustedgross income. Since Vermont definesits adjusted gross income in terms offederal adjusted gross income, theexclusions under §§ 911-912 of theIRC for income from sources withoutthe United States are apparentlyadopted into the computation ofVermont adjusted gross income. Vt.Stat. tit. 32, §§ 5811(1), 5822, 5823.


Non-residents -- Subject to taxon federal adjusted grossincome derived from sourceswithin Vermont.

Military personnel -- Notsubject to tax on military payfor full-time active dutyservice performed outside ofthe state.

(2) The adjusted gross income of non-residents derived from sources withinVermont. Vt. Stat. tit. 32, § 5823.

(3) Adjusted gross income does notinclude military pay for full-timeactive duty with the armed servicesoutside of the state. Vt. Stat. tit. 32 §5823(a)(2).

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OBLIGATION

Virginia Residents and non-residents -- The term “resident” isdefined as an individual domiciled in the Commonwealthand a person who maintains an abode in the state for morethan 183 days of the taxable year. Va. Code § 58.1-302.

Persons in the armed forces of the United States stationedon military or naval reservations within Virginia who arenot domiciled in Virginia and who maintain no place ofabode in Virginia shall not be held liable to income taxationfor compensation received from military or naval service.Va. Code § 58.1-321(B).

(1) The taxable income of residentsdefined in terms of federal adjustedgros s income wi th cer ta inmodifications not herein relevant.Since Virginia defines its taxableincome in terms of federal adjustedgross income, the exclusion under §§911-912 of the IRC are apparentlyadopted into the computation ofVirginia taxable income. The first$15,000 of military pay is excludedfrom income, with a dollar for dollarreduction in the exclusion for incomeover $15,000. Va. Code § 58-1-322.

(2) The taxable income of non-residents derived from sources withinthe state. Va. Code § 58-1-325.

The federal exclusion under § 112 ofthe IRC for compensation received foractive service as a member of thearmed forces of the United States forany month during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is specificallyadopted into the computation ofVirginia taxable income. Va. Code §58-1-322.

Virginia grants a tax credit for taxespaid to a foreign country on retirementincome. Va. Code § 58-1-332.1.


Non-residents -- Subject to taxon taxable income derivedfrom sources within the state.


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OBLIGATION

WestVirginia

Residents and non-residents -- The term “resident” isdefined to include: (1) domiciliaries, unless they maintainno permanent place of abode within the state, maintain apermanent place of abode outside the state, and spend notmore than 30 days of the taxable year in the state, and (2)non-domiciliaries who maintain a permanent place of abodewithin the state and reside within the state for more than183 days of the taxable year. W. Va. Code § 11-21-7(a).

“Non-resident” is defined to mean an individual who is nota resident. W. Va. Code § 11-21-7(b).


(1) The taxable income of residentsdefined in terms of federal adjustedgross income with modifications notherein relevant. Since West Virginiadefines its own taxable income interms of federal adjusted gross income,the exclusions under §§ 911-912 of theIRC for income from sources outsidethe United States are apparentlyincorporated into the definition ofWest Virginia taxable income. W. Va.Code §§ 11-21-11(a), 12.

(2) The taxable income of non-residents derived from sources withinWest Virginia. W. Va. Code §§ 11-21-30, 32.

Since West Virginia computes its owntaxable income from federal adjustedgross income, the exclusion underSection § 112 of the IRC forcompensation received for activeservice as a member of the armedforces of the United States for anymonth during which such memberserved in a combat zone or washospitalized as a result of an injuryincurred in such service is apparentlyadopted into computation of WestVirginia taxable income. W. Va. Code§ 11-21-11

Residents -- Subject to tax ontaxable income above theexclusions under 911-912 ofthe IRC.

Non-residents -- Subject to taxon taxable income derivedfrom sources within WestVirginia.

Military personnel -- Subjectto tax on such compensationwith stated exclusions.

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OBLIGATION

Wisconsin Residents and non-residents -- The term “resident” isdefined as a domiciliary. Wis. Stat. § 71.02(1).


(1) The taxable income of residentsdefined in terms of federal adjustedgros s income wi th cer ta inmodifications not herein relevant.Since Wisconsin defines its owntaxable income in terms of federaladjusted gross income, the exclusionsunder §§ 911-912 of the IRC forincome from sources without theUnited States are apparently adoptedinto the computation of Wisconsintaxable income. Wis. Stat. §§71.01(13) & 71.05.

(2) The taxable income of non-residents derived from sources withinWisconsin. Wis. Stat. §§ 71.01 &71.02. Non-residents domiciledwithout Wisconsin who derive incomefrom performing personal serviceswithin Wisconsin shall be excludedfrom having to pay Wisconsin tax tothe extent that the home domicile taxesthe income. Wis. Stat. § 71.05(2).


Non-residents -- Subject to taxon taxable income derivedf r o m s o u r c e s w i t h i nWisconsin.

Military personnel -- Subjectt o t a x o n m i l i t a r ycompensation with statedexemption.

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OBLIGATION

Wisconsin(Continued)

Since Wisconsin computes its owntaxable income from federal adjustedgross income, the exclusion under §112 of the IRC for compensationreceived for active service as amember of the armed forces of theUnited States for any month duringwhich such member served in acombat zone or was hospitalized as aresult of an injury incurred in suchservice is apparently adopted intocomputation of Wisconsin taxableincome. Wis. Stat. § 71.05.

IV. States Having No Income Tax

STATES: Alaska

Florida

Nevada

South Dakota

Texas

Washington

Wyoming

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