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Taxing Taxing, Part 2

, , , , | Working | March 28, 2014

(I’m a graduate student from New Mexico attending San Diego State University in California. It’s my second year in state when I get a call from the California equivalent of the IRS.)

Tax Board: “We are calling because you didn’t pay your taxes for the previous year.”

Me: “For which year?”

Tax Board: “[Year I first arrived in California].”

Me: “Yes. I was not a California resident that year.”

Tax Board: “Yes, but you were living in California.”

Me: “True, but I was maintaining my New Mexico residency. I paid New Mexico state income taxes for that year. I’m a graduate student and since I could not guarantee that I would be staying past the first year, I was maintaining my New Mexico residency in case I didn’t pass through the first year.”

Tax Board: “But you were still living in California.”

Me: “But I was not a California resident. What money is this about?”

Tax Board: “We have a record of interest on [bank account] of $800.”

Me: “That account is drawn on a bank in New Mexico.”

Tax Board: “But you were living in California.”

Me: “But I was maintaining my New Mexico residency. I specifically did not move my accounts over nor did I register my car nor get a driver’s license in California until this year. My voter registration was for New Mexico. I was not a California resident.”

Tax Board: “But you were living in California when you earned the money.”

Me: “But I was maintaining my New Mexico residency. I was not a resident of California.”

Tax Board: “But if you are living in California when you earn money, you must pay California taxes on it.”

Me: “That makes no sense. That means anybody who is physically in California whenever any interest is earned means they owe California income tax and that clearly isn’t true.”

Tax Board: “But as soon as you started living in California, you owed California income tax on any money you earned. You weren’t just visiting. You were living here.”

Me: “Wait a minute. It seems every government agency here in California has a different idea of ‘residency.’ The DMV seems to think I needed to register my car as soon as I drove over the border from Arizona. The university says I’m not a resident until I’ve lived here a year. And now you’re telling me that I’m a resident as soon as I earned any money.”

Tax Board: “Yes, you owe California income tax on money you earned while living in California.”

Me: “You say I owe taxes on $800 of interest income? That’s what, eight dollars of taxes I owe?”

Tax Board: “That’s right.”

Me: “I’ll be happy to write you a check for $8 in exchange for a refund of the $10,000 in out-of-state tuition I had to pay.”

Tax Board: “Excuse me?”

Me: “If I’m liable for taxes, then I demand the services that those taxes paid for. San Diego State is a state-run institution. It is funded by my tax revenues. I was charged out-of-state tuition. But you, the tax franchise board, are saying that I am a resident of California. Refund me my out-of-state tuition. You can take the eight bucks out of that.”

Tax Board: “… I think we might be able to overlook this.”


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