2.26 Ark. Code R. 51-102(9)

Current through Register Vol. 49, No. 10, October, 2024

Rule 2.26-51-102(9) - Residency Determination

A three pronged test, as set forth below, is used to determine whether or not a person is a resident of Arkansas. Satisfaction of any one prong is sufficient to establish residency.

a)any person domiciled in the state of Arkansas. Domicile is comprised of an act coupled with an intent. A domicile is acquired by (1) physical presence at a place coinciding with (2) the state of mind (that is, intent) of regarding the place as a permanent home. A domicile arises instantaneously when these two facts occur. Every person must have one domicile but can have no more than one domicile, regardless of how many residences a person may have at any given time. A domicile, once established, continues until a new domicile of choice is legally established. An established domicile does not end by lack of physical presence alone nor by mental intent alone. The old domicile must be abandoned with the intention not to return to it. If one moves to a new location but intends to stay there only for a limited period of time (no matter how long), the domicile does not become the new location but rather remains unchanged.

b)any person who maintains a permanent place of abode within Arkansas and spends in the aggregate more than six (6) months of the year within Arkansas. Place of abode means a place where a person has established a permanent home, even though such person may be absent therefrom[sic] for a long period of time. A temporary home or residence would not be considered a place of abode, as there must be at least some degree of permanence. In addition, a person must actually spend more than six months of the tax year in Arkansas to fall within the scope of this provision. A person who has spent either less than six months or exactly six months in Arkansas would not fall within the scope of this provision.

Place of abode and residence are considered to mean roughly the same thing. However, domicile and residence are not considered to be synonymous. Residence denotes only an act (the act of residing), while domicile denotes an act (the act of residing) coupled with the intent that the residence be a permanent home. The distinction between domicile and place of abode is that although a person can have several homes (or places of abode) at one time, only one of those homes can be the person's domicile. The home that the person intends or considers to be their permanent home (as in home base) would be the domicile.

c) In situations where it is not clear if the requirements of either domicile (a) or place of abode (b) have been met, a residency determination can only be made after thoroughly reviewing the facts on a case by case basis. When reviewing the facts, the Supreme Court of Arkansas has held that we are not bound to accept a taxpayer's claims of intent when the circumstances point to a contrary conclusion. Furthermore, when acts are inconsistent with a taxpayer's declarations, the acts will control, and our conclusions regarding residency should be based on the facts and circumstances proved. The following factors should be reviewed in making a residency determination:

* Address used on federal income tax returns;

* Address used on telephone, utility and commercial documents;

* Address used on voter registration;

* Address used on driver's license, hunting and fishing license;

* Address used on motor vehicle, boat and trailer registration;

* Address used on real and personal property tax documents;

* Address used on county and other tax assessments;

* Address on governmental documents, such as military records. With respect to military records, the Leave and Earning Statement is a very important document;

* If the Taxpayer has a spouse, the spouse's address on such things as drivers license, voter registration, vehicle registration, etc. should be checked out;

* Employer and withholding information, nature of Taxpayer's employment (traveling salesperson, etc);

* Location of Taxpayer. How often and for how long is Taxpayer present at the locations at issue;

* Location of immediate family, such as spouse and children;

* Length of time in Arkansas of Taxpayer and immediate family;

* Community affiliations, such as club memberships, church, bank accounts, etc.;

* Absence of factors in other states.

2.26 Ark. Code R. 51-102(9)