Society again backs bright-line domicile test

Written on Feb 01, 2018

OSCPA staff report

House Bill 292 is a necessary measure to re-establish a bright-line presumption of domicile test for determining an individual’s state of residence for Ohio personal income tax purposes, OSCPA Tax Policy Director Greg Saul told lawmakers this week.

HB 292 is designed specifically to correct an issue in Cunningham v. Testa, an Ohio Supreme Court case decided in July 2015 that incorporated the common law of domicile into Ohio’s bright-line residency statute (R.C. 5747.24), “once again turning this process into a fact-searching expedition,” Saul said in testimony before the Senate Ways & Means Committee.

“To again establish a bright-line residency test, the legislature must amend the statute to limit the concept of domicile to the definition contained in R.C. 5747.24, thus clearly showing your intent to repeal a settled rule of the common law,” Saul said.

He said OSCPA also supports a provision of the bill that extends the deadline for filing the non-resident affidavit from the 15th day of the fourth month to the 15th day of the 10th month following the close of the taxable year.

“The statement, if truthful and filed before that date, establishes an ‘irrebuttable’ presumption that the person is a non-resident,” he said. “However, the presumption becomes rebuttable if it contains a ‘false statement,’ and the individual is then presumed… to have been domiciled in Ohio.”

The Ohio Department of Taxation in 2015 clarified its position after Cunningham, stating that the Tax Commissioner may challenge the truth of any statement contained on the affidavit.

“Even though it is outside the scope of this legislation, further consideration should be given to reducing the factors used for determining whether an individual is domiciled in a municipal corporation for all or part of a taxable year, which currently stands at 25 different factors,” Saul said.

For more information on these or any other issues OSCPA is working on, contact the governmental relations team.

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