Californa resident - moving overseas - starting business

Feb 17, 2010 3 Replies

I?m a California resident. I?m planning to move overseas (for the foreseeable future if not permanently) and then start and operate a corporation formed in a no-income tax state, e.g., Nevada. I own no property in California and all my financial accounts are with national institutions, e.g., Bank of America. If I were to return to the US, I would live in another state, not California



Has anybody had experience with successfully claiming non-resident status for tax purposes in a situation like mine based on facts and circumstances as outlined in FTB publication 1031 ? Guidelines for Determining Resident Status? If so, what did they need to do/show? Can anyone point me to FTB decisions relevant to my situation?



Also, could the safe harbor apply to me if it?s my own business rather than a 3rd party employment contract?



Separately, since I won?t have a presence in either California or Nevada do I need to collect sales tax for my business in either state? If so, how do I do this since I won?t have a physical address in either state and the sales tax permit applications seem to require one?



Thank you.


Having no remaining ties to either state is a good, first step, but may not be complete.

Huh? What else is needed?

I have spent an excessive amount of time researching this issue in the past. If you dot the eyes and cross the tees, it's easy. But dot every eye and cross every tee or woe be unto you.

You will not have a problem with the Feds. Unfortunately IRS Pubs and tax Treaties do not apply to the individual States and their sub-domains. NEVER FORGET that If you can spell "California", they think you owe them taxes. So move your banking to a branch of Bank of America outside of Kal-E-FORN-ya. Also move to another State and register to vote there - plus get a driver's license from there.

Also even if you never set foot in your state of incorporation, you will have a registered agent they can sue. So be very careful with the sales tax issue. I am an auditor and it is my considered professional opinion that IRS auditors are pansies when compared with to the cut-throats who audit sales taxs. So I ask why incorporate at all? If you really feel it's in your best interest to incorporate, do so in a State with neither a sales tax nor an income tax. I believe (which means I may be wrong) that Alaska, New Hampshire, and Wyoming fit that criteria. But they may have high corporation taxes/fees.

To where are you planning to move? If been trying to emigrate for the last 30 years. I may come with you!

Dick

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