In a recent Board of Tax Appeals Case, taxpayers contested the Department’s assessment of personal income taxes, asserting that they were not Ohio residents. See Anthony R. Joy & Robin E. Miller, (et. Al.), v. Jeffrey A. Mcclain, Ohio BTA Case No. 2020-239. However, the taxpayers made two critical mistakes that ultimately resulted in the Board affirming the assessment.
First, the taxpayers failed to timely file an affidavit of non-Ohio residency for any tax year. Under Ohio law, taxpayers are presumed to be non-Ohio residents if they meet 3 requirements: 1) have an “abode” or place of residence outside Ohio during the entire taxable year, 2) have no more than 212 contact periods in Ohio during the taxable year, and 3) file a non-Ohio residency affidavit. R.C. 5747.24. Here, the taxpayers had a home outside Ohio and had fewer than 212 contacts, but because they failed to file the non-residency affidavit, they were presumed to be Ohio residents. Therefore, the taxpayers were required to meet the much tougher common law test and present clear and convincing evidence that they established new residency in another state and intended to abandon their Ohio domicile.
Second, the taxpayers failed to present the necessary evidence at a hearing before the Board. Although they attached factual information to the notice of appeal, the evidence must be presented at a hearing in order to be included in the record before the Board. The evidence before the Board showed the taxpayers kept an Ohio abode, were both registered voters in Ohio, maintained Ohio drivers’ licenses and renewed their vehicle license place in Ohio. Therefore, the taxpayers failed to rebut the presumption of their Ohio residency. Had they presented more evidence at a hearing, they may have prevailed.
It is absolutely critical that taxpayers consult competent representation when changing residency for state tax purposes and pursuing appeals at the Board.