Paying State Income Tax for Louisiana when actually living out of State?

[Arcman]

I read in a an earlier discussion that many, if not most pilots flying the GOM, live out of state and commute to south LA. Given that, can someone shed light on whether you have to pay Louisiana state income taxes or do you pay for the state you actually live in?

 

Arcman

[klmmarine]

This is actually something I know something about because I just did extensive research for my accountant this tax season. There is a law that states "offshore workers" who do not reside in a state shall not pay state income tax in that state. As such I live in Nashville and work out of Morgan City I pay only my federal income taxes and am exempt from LA state tax (TN doesn't have state income tax). I don't have the specific code reference but it can be found easily on the net.

 

SO, if pilots are considered offshore workers (no reason they shouldn't be everyone else in the oil patch is) they are exempt from paying state tax in any state they actually don't live.

[heligirl03]

You pay state income tax for the state you RESIDE in. So if you don't LIVE in Louisiana, you get back anything in excess of what you owe your own state. No state income tax where you live, you get it all back. Louisiana has a NON-RESIDENT individual income tax form that is miraculously not that difficult to figure out. However while you can print it from the LA tax dept website, you can't actually file online as a non-resident which is sort of frustrating. But fill it out, send it in, get your check back in the mail. I did it for a friend this past April, took about 10 minutes. Good luck!

[klmmarine]

I have been working offshore in the GoM on boats now for three years and I have yet to have state income taxes witheld from my paycheck. When filling out my paperwork (I-9, W-4) I have filled out a form declaring myself exempt from state witholdings. No state witholding no filing state income tax.

 

The law that I mentioned in my previous post is attached below. The applicable section that I am familiar with is for mariners but the first section is for pilots. It states that a pilot is taxable in: The state in which he resides; The state in which he earns more than 50% of his income; The state in which he accumulates more than 50% of his flight time. Since most of an offshore pilot's flight time is accrued over water in international waters then officially the pilot is only liable for state income tax in his state. At least that is the way I read the law. I will attach the page I am referencing.

 

If the rules are different for pilots than for mariners then please correct me on this. I would be interested to know how the pilots down here do it, I just assumed it was the same.

tax.pdf

[Gomer Pylot]

The company will withhold LA taxes unless you file a form to prevent it. I filed a form with my employer after the first year fiasco, and never had the taxes withheld again, and never heard from Louisiana. I can't recall the form number (it was >25 years ago) but the payroll people should know all about it. Just file the form swearing that you're not a Louisiana resident, and you're done. You will be liable for taxes in your home state, if it has any. You may want to compare tax rates and see which state would be cheaper. I don't know how all that works, because I live in Texas, which has no income tax. It's all made up through property taxes, so we actually end up paying more taxes than we would if we paid an income tax. But it's the thought that counts, especially with the Texas Legislature, and they won't even think of having an income tax.

[Wally]

I read in a an earlier discussion that many, if not most pilots flying the GOM, live out of state and commute to south LA. Given that, can someone shed light on whether you have to pay Louisiana state income taxes or do you pay for the state you actually live in?

 

Arcman

 

I'm not giving you fiancial or tax advice, I'm just a pilot. You may have to pay both income taxes, depending on your state of residence tax law.

The deal, as I recall it is this- your employer will withhold state taxes for the base you're at. That state automatically takes the position that if you're based in the state, you owe taxes on income earned in the state. They're withheld until you file a return for their refund or file an exemption. The exemption will state that your earnings are all out of state that you're based on, and the burden of proof will fall on you.

You may want to pay a few bucks to a real tax adviser to find out what your situation is in this regard. Is there a base ratio of income that must be earned out of state, or must your earnings be entirely out of the state?

My home state's income taxes are higher than Louisiana's, so I used my LA taxes to offset my home state's, so I never filed exempt.

Wally

[PAinGA]

I had a client that lived in Tennessee, but was employed by a company based in New York City. He never set foot in New York, but had to pay taxes as a non-resident. Now, this situation is different from an offshore worker (I've never dealt with that issue), but just because you live in a state that does not levy an income tax, but get paid by a company based in another state, does not mean that you are not automatically exempt from an income tax. (BTW, I aced the CPA exam and I am working on a Master's degree in Taxation-I have some REAL knowledge on this stuff.)

 

With that said, if the company is based in LA, and you receive a W-2 statement that has "LA" at the bottom for state wages, you could be liable for taxes. Best thing to do is check with the LA taxing agency. They can advise you on the issue. Or, contact a CPA in LA. Some of the CPAs in the area there have probably dealt with this issue frequently.

 

When I get to work tomorrow, I will look the issue up on the tax research software.