The Ohio Department of Taxation recently proposed amendments to its rule governing the determination of resident status for personal income tax purposes. The current rule identifies factors considered in making a determination of an individual’s domicile (e.g., the number of contact periods in Ohio during a taxable year and the individual’s activities in tax years preceding or following the year(s) in issue) and factors not considered in making that determination (e.g., the location of financial institutions where an individual holds an account, the location of an individual’s professional service providers, and the location of an individual’s health care providers). According to the Department’s website, the purpose of the revision is to “modernize the factors that can, and cannot, be considered when determining a taxpayer’s residency status” and “increase the rule’s readability, clarity, and brevity.”
The proposed amendments add the jurisdiction in which an individual is registered to vote and the failure of an individual to meet requirements related to a statutory presumption of domicile outside the state to the list of factors the Department may consider in determining domicile. The draft revisions also rearrange and streamline the list of factors the Department may not consider in making its determination. Lastly, the new rule streamlines the language for counting contact periods an individual has with Ohio. To this end, express references to the preponderance of evidence standard for proving contacts with the state and presumptions in favor of the Department with respect to the same in the current rule have been removed.