Who Qualifies as a Resident of Minnesota?: Non-Domiciliary Resident Rules

This is the fourth article in a series dedicated to the rules regarding who qualifies as a “resident” of the State of Minnesota for tax purposes. Status as a resident of Minnesota is important as all Minnesota residents are subject to Minnesota individual income tax, gift tax, estate tax, and sales and use tax. Non-residents are usually not subject to these taxes unless they purposely avail themselves of Minnesota taxes.

This article provides a brief overview of how an individual can be “resident” of Minnesota for tax purposes, even though Minnesota might not be their domicile. These rules are often referred to as the “non-domiciliary resident” rules. Previous articles have addressed how an individual can be a resident of Minnesota if they are domiciled in Minnesota.

Minnesota Statutes Section 290.01, Subd. 7(b)(2) states: a Minnesota resident can be “any individual domiciled outside the state who maintains a place of abode in the state and spends in the aggregate more than one-half of the tax year in Minnesota.” This rule has two elements. If both elements are satisfied, the individual is a resident of Minnesota and subject to Minnesota taxes.

1. “Maintains a place of abode in the state.” Minnesota Statutes Section 290.01, Subdivision 7 states that an “abode” is a: “dwelling maintained by an individual, whether or not owned by the individual and whether or not occupied by the individual, and includes a dwelling place owned or leased by the individual’s spouse.” If a person has an “abode” in Minnesota, they are a non-domiciliary resident if they:

2. “Spend in the aggregate more than one-half of the tax year in Minnesota.” The magic number is 183 days in Minnesota. If a taxpayer maintains a place of abode and spends more than 183 days in Minnesota, they will be considered a “resident” of Minnesota and will be subject to Minnesota taxes. For the purposes of this rule, any time spent in Minnesota counts as a day spent in Minnesota. There are narrow exceptions we will discuss in future articles.

This article provides a basic discussion of the non-domiciliary rules. Please watch for future articles expanding on the definition of “abode” and explaining how to calculate whether an individual spent 183 days in Minnesota.