I was recently told that pilots residing out of state are exempt from Louisiana income tax. Is this true? If so, what is the justification / legal source? Any one ever had to deal with a state audit regarding this?
It has been my understanding that pilots whom reside out of state from where they are based are still obligated to pay state income tax in the state they are based, if >50% of their income is obtained in that state.
For example, a pilot lives in CO but is primarily based in LA. During the year they are also based in TX for two months. At the the end of the year, the pilot is obligated to file tax returns (and pay state income tax) with CO and LA, but not TX. If the pilot resides in a state such as WY (no state income tax), then they are only obligated to file with LA.
I would certainly love to pay less in taxes, but don't want to find out 8 years down the road that I owe a huge sum in back taxes, interest and penalties. Any insight into the matter is greatly appreciated.