South Carolina’s Department of Revenue (DOR) recently published the inaugural edition of its Guide to Determining a Taxpayer’s Domicile for Income Tax Purposes (Guide). The publication issued by the DOR’s Policy Division provides a general overview of South Carolina’s domicile rules for income tax purposes. The intent of the guide is to assist taxpayers and tax professionals in determining whether an individual is a “resident” or “nonresident” of the Palmetto State, and whether such individual’s income is subject to tax in South Carolina. The Policy Division notes that other states may have rules different from South Carolina’s and that the guide is meant to “assist taxpayers and tax professionals in determining whether an individual is a South Carolina ‘resident’ or ‘nonresident’ and whether the individual’s income is subject to tax in South Carolina.”
To accomplish this purpose, this guide:
- reviews the meaning of “domicile” as provided primarily through South Carolina case law;
- provides factors the DOR considers when determining if an individual is a “South Carolina resident” or a “South Carolina nonresident” for individual income tax purposes;
- provides key principles of domicile for South Carolina income tax purposes; and
- reviews the federal provisions and special rules for domicile afforded to military service members and to service members’ spouses.