Ohio Supreme Court Ruling Affects Non-Residency Status
Earlier this month, the Ohio Supreme Court’s ruling in Cunningham v. Testa (Slip Opinion No. 2015-Ohio-2744) considered the state’s determination of “domicile” status according to the “bright line” residency statute (R.C. 5747.24).
Ohio’s “bright line” statute specifies that an individual is not considered domiciled in Ohio (and thus not subject to state income taxes) if the following conditions are met:
- The individual has no more than 182 (revised to 212 in March 2015) contact periods in the state during the entire taxable year;
- The individual has at least one abode outside the state during the entire taxable year;
- The individual files the necessary paperwork with the tax commissioner verifying the above conditions were met.
However, the recent Ohio Supreme Court ruling in Cunningham v. Testa concludes that the “bright line” criteria is not irrefutable proof of non-Ohio domicile status. The Ohio Supreme Court’s ruling states the tax commissioner may rely on additional facts and evidence to deem an individual’s out-of-state domicile affidavit as false.
What This Ruling Means for Taxpayers:
- Meeting the criteria for Ohio’s “bright line” residency statute may not be considered indisputable evidence in determining out-of-state domicile status.
- The Tax Commissioner may challenge a taxpayer’s Affidavit of Non-Residency/Domicile if additional evidence suggests domicile status in the state.
Ohio R.C. 5747.24 still stands and taxpayers are still required to file an affidavit if claiming not to be domiciled in Ohio. However, as this ruling allows for domicile status to be challenged by the Tax Commissioner, we want to alert our clients to this possibility. Should additional legislation or developments occur involving Ohio’s residency statute, we will alert you.
If you have questions about Cunningham vs. Testa and your domicile status, please contact your Whalen representative.
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