Do American Liveaboards Have To Be State Residents?

[osirissail]

I think it is just a "word game" but as such a good indication of how the mentally of most folks have changed over the years.
- - Before you can "owe" anybody taxes, you must be assessed and an amount of tax determined and assigned to you. Then you will "owe" the taxes. Of course you can dispute the assessment or your qualification to be covered by a particular tax. If you win, you don't "owe" anything. If you lose the challenge then you owe and should pay up.
- - The whole basis of the USA Federal tax system is getting citizens to "assess" themselves and then pay what they determine that they owe. When that system fails, the actual "tax collector" does the assessment and presents you will the amount they think you owe.
- - For the most part State and local taxation is assessed by tax office bureaucrats and you are sent the "bill." Or the amount is automatically attached to you via a 3rd party (e.g., sales taxes, transfer taxes, etc.). Some States "piggy-back" the Federal Income Tax and you self-assess via the process of figuring your federal taxes and then the State wants an amount that is a percentage of your Federal taxes.
- - All in all, a very academic discussion, but I find it interesting that lots of folks do think that they "owe" taxes before being actually assessed.

[tropicalescape]

Originally Posted by osirissail

I think it is just a "word game" but as such a good indication of how the mentally of most folks have changed over the years.
- - Before you can "owe" anybody taxes, you must be assessed and an amount of tax determined and assigned to you. Then you will "owe" the taxes. Of course you can dispute the assessment or your qualification to be covered by a particular tax. If you win, you don't "owe" anything. If you lose the challenge then you owe and should pay up.
- - The whole basis of the USA Federal tax system is getting citizens to "assess" themselves and then pay what they determine that they owe. When that system fails, the actual "tax collector" does the assessment and presents you will the amount they think you owe.
- - For the most part State and local taxation is assessed by tax office bureaucrats and you are sent the "bill." Or the amount is automatically attached to you via a 3rd party (e.g., sales taxes, transfer taxes, etc.). Some States "piggy-back" the Federal Income Tax and you self-assess via the process of figuring your federal taxes and then the State wants an amount that is a percentage of your Federal taxes.
- - All in all, a very academic discussion, but I find it interesting that lots of folks do think that they "owe" taxes before being actually assessed.

You are much better with wording than I am,I want say any more about it because I have heard about people being arrested for intimating such things...

[osirissail]

Bottom line, the only sure thing in this existence is "death and taxes." As a cruiser spending a considerable amount of time outside the USA or their home country, how you organize your assets and obligations is important. Badly done and most likely you will be spending considerable money and time fighting the system. If it is done well, then you have a lot of time to enjoy the cruising life-style with a lot less stress.

[CarinaPDX]

Oregon considered me a resident because it was the last place I resided before becoming transient. Fortunately they also exempt "special case" residents from taxes on income not sourced in the state if they don't own a domicile in the state and visit less than 30 days a year. So that left just federal taxes. And as a resident (albeit with just a mail drop) the drivers license, auto registration, and voting are no problem. This has worked well for me.

The point is to know the laws where you are a resident before leaving, as there may be some good provisions but also some gotchas.

[lorenzo123]

I believe, but am not entirely sure, that if you work out of country for more than 18 months, your income is not taxed by US.

[Doodles]

Originally Posted by lorenzo123

I believe, but am not entirely sure, that if you work out of country for more than 18 months, your income is not taxed by US.

Sorry this is more thread drift, but its 330 days out of any 365 and its called the foreign earned income exclusion. As per the name it only applies to "earned" income not things like investment or pension income. The amounts is adjusted annually and its $95,100 max for 2012.

[Canibul]

Thanks for all the responses, insights, and interesting detours. It's starting to sound like it might just make sense for us to keep the Turks and Caicos resident status for now. This would probably prevent us from using the Florida virtual community approach, since that labels one a 'resident' of Florida and we do not wish to be 'residents' on paper. The way the pieces seem to be falling in place here, it probably makes the most sense for me to form the Montana LLC for the vehicle registration and licensing requirements, and to now look for a way to own a Gemini as a TCI resident, but without importing the boat to the TCI. Whole different set of issues. This 'life in a foreign country' stuff gets frustrating sometimes.

By the way, for clarification, us being Turks and Caicos Island "Residents" does not equal citizenship. We do not vote in TCI elections, nor can we hold or seek employment in the TCI. A "Resident Permit" is permission to live here. We don't earn money within the Turks and Caicos Islands, per se. We are not taking a job away from a local, and thats really what those laws are all about. We earn our money elsewhere, and import it here to spend. They like us. AND We're not Brits. So they REALLY like us.

We are US citizens. We pay a whole bunch of Federal Income Taxes, quarterly. We don't receive much in the way of benefits for those taxes, so I would think that accountants for Uncle Sam would like us, too. Heavily in the black ink column.

[osirissail]

About the only thing I can think of as a consequence of not having a State "residence" is that you cannot vote in State and Local elections. You can vote in Federal level elections which I used to do via the local U.S. Embassy (Trinidad in my case). But I don't think that will be a major consideration in your situation.

[Canibul]

We vote absentee in Federal elections the last places we were registered to vote, in MA and NJ.

Residency permits here just went up to about $ 1,500 a year, I think. That's manageable, especially when I look at the costs of something like a Colorado residency. Holy smokes. Registering one 4x4 in Colorado will cost more than an entire year's resident permit costs here. Biggest problem here, at the moment, is the 46% import duty. That just happened last August. Plan is to eventually replace it with a new graduated VAT scheme of some sort. We just flat out do NOT want to pay a 46% of the price of a catamaran to the government here. But we like it here, in general. Where else can you get the whole 'living on a foreign, tropical island" thing an hour's flight from Miami, other than the Bahamas. The Brits can still step in here and sort messes out from time to time, which they can no longer do in the Bahamas. So we are kinda hanging around hoping we can nimbly dodge the slings and arrows of outrageous government long enough to be able to see what it stabilizes to on this cycle. Import duty on a boat was only 11% until August. I would hope that an island nation might realize that it would be in their best interest to actually encourage the importation of boats, and boat owners, who buy homes and marina slips. And fuel at $ 5 a gallon. And shiny hardware and groceries.
We would import a used cat at 11%. We had planned to.

[osirissail]

Originally Posted by Canibul

Thanks for all the responses, insights, and interesting detours. It's starting to sound like it might just make sense for us to keep the Turks and Caicos resident status for now. . . .

(ran over the time limit on revisions to posts) - One more complication you might need to investigate is the ability to keep your Turks & Caicos resident status. In some places, if you are absent from the country for a long period of time, they revoke your "resident alien" status - the idea being, if you are not living there you don't need it.
- - Normally in such cases you only have to reapply and go through the processing again when you return.

[Canibul]

We buy our resident permits by the year here. We just re-upped for another three years, a year ago. The whole residency mess here is being looked at now, during a complete government overhaul that's been going on for the past couple of years. There have been something like seven arrests in the last month, former government officials, their lawyers, and some developers, so far.... after the two year investigation. sometimes living here is like being an extra in an Eddie Murphy movie.

[osirissail]

Then again, one of the joys of living in small country is the "comedy of errors" always going on and luckily because of the small size of the place, it doesn't become an out of control major disaster. But "just in case" I always kept the boat ready to throw off the lines and make a dash for open sea.

[Canibul]

We were actually quite happy with the crooked local government when we moved here. They got a lot of stuff done in their own way, and we actually found it an interesting slant to feel that we had access, here and there. Be honest with yourself, and think about how attractive it might have been to you at times in your life to just slip someone a few bucks and magically have things happen the way you wanted them to? A permit approved. A variance granted. An expired whatever overlooked.

With the Brits, nobody knows who to pay off or how....it's almost as bad as the US!
You have to have megabucks to even play in the game in most places in the world, like the US. Bribery is only allowed at corporate and state political levels and above. A pair of Blogos or better. Common guy doesn't stand a chance.

I've met the govenor here. Once in a meeting I got invited to for the print media, and again in an outdoor restaurant. There is no iron fence around the Premiers home. My dog boards with a ministers dogs. It's totally different from living in the States. Imagine being a neighbor with the bigwigs in DC or London, and running into them and the local business leaders in grocery stores and at outdoor cookouts.

i'd say my chances of having a beer with a Bush, Cheney, Clinton, or Obama would be just about nil.
There's more of a feel of connection in a small country. I am sure we know SOMEbody related to just about any local government official in the islands.

[HeartsContent]

Originally Posted by Canibul

We were actually quite happy with the crooked local government when we moved here. They got a lot of stuff done in their own way, and we actually found it an interesting slant to feel that we had access, here and there. Be honest with yourself, and think about how attractive it might have been to you at times in your life to just slip someone a few bucks and magically have things happen the way you wanted them to? A permit approved. A variance granted. An expired whatever overlooked.

Sounds a bit like feeding the bears to me!

[osirissail]

Yes, it is the same way in the Dominican Republic and I, sort of, miss it. Although the D.R has all the laws and rules of most countries, a little gratuity here and there and magically things happen the way you want them to a great degree. "Responsive government" is nice even if it takes a little "grease" to get the wheels moving.