The Minnesota Department of Revenue conducts audits to determine a taxpayer's domicile and residency status. The department is primarily targeting taxpayers who claim residency in another state but own property in Minnesota that is considered an abode. Concerns can be raised about the constitutionality of such audits, the department's compliance with the law and other issues.
Businesses in Minnesota should be aware that the Department of Revenue may use factors like the location of medical providers and businesses to determine residency and domicile status. This means that even non-residents who own or maintain a Minnesota abode could be subject to income tax if, among other factors, they use medical providers in Minnesota or conduct business with Minnesota-based companies. Even worse for Minnesota medical providers and businesses is the possibility that the Department of Revenue could penalize out-of-state residents for using their services.
The department should focus its efforts and resources on more pressing issues, such as financial scandals in the state, instead of targeting senior citizens from neighboring states who own property in Minnesota. The department often prevails in these audits, we suspect because it's less expensive for taxpayers to pay a bogus tax fee and fine than to hire an attorney to fight, which could cost in excess of $50,000.
The Department of Revenue’s practices are a cause for concern, and taxpayers and businesses in Minnesota should be aware of their rights. The department should prioritize its efforts and resources on issues that matter to Minnesota taxpayers and ensure that its practices are compliant with the law.
John and Sarah Grandson
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Hill City, South Dakota
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