Authored by Mark Lobb
Nevada remains one of the top states California residents are moving to as the result of various reasons. In 2019 and 2020, the combined total number of California residents who surrendered their drivers licenses to the State of Nevada was just over 70,000. In 2020, Californians represented 43% of those from out-of-state surrendering drivers licenses in Nevada. Our office has a business migration practice assisting businesses and the owners of businesses transition to business-friendly states such as Nevada. Every day, we receive questions about the process of moving to Nevada and the residency requirements.
There are three basic steps for a Californian to become a Nevada resident.
- Nevada must recognize you as a resident.
Nevada wants you to become a Nevada resident. The red carpet is waiting for anyone in a U-Haul heading north on the 15 freeway. The residency requirements are not put in place to keep people out who want to become residents.
The Nevada residency rules are there to make certain you are in fact a resident if you desire to avail yourself of certain state benefits. For instance, to qualify for an in-state hunting or fishing license, Nevada requires a person to have been a resident of the state for at least six months immediately preceding an application. Likewise, to be a full-time student at an institution of higher learning in the state, a student must have been physically present in Nevada for at least six months immediately preceding his or her application. You do not need to be a resident to get married in Nevada, but you cannot get a divorce in Nevada unless you have lived there for six weeks.
Generally, the bar is low to have Nevada decide you have met the residency requirements. There are two main elements to determining residency. First, there must be an intent to reside in Nevada for an indefinite period of time. That intent must be coupled with an actual, physical presence in Nevada. Once those two items have been met, Nevada will recognize you to be a resident.
To bolster the evidence of your intent to be a Nevada resident, you can file declaration of domicile in the county in which you have decided to reside. This process involves filing a sworn statement with the district court in the county where you are located, evidencing residence and intent to make that location a permanent, predominant, or principal home. You should also fill out and file a Certificate of Residency with the DMV in Nevada.
California has to agree you meet the Nevada residency requirements.
If you are audited by the California Franchise Tax Board (“CFTB”), you need to show you meet the Nevada requirements of residency. This should not be a difficult task but you should go out of your way to meet all of the Nevada requirements. A guideline can be taken from the form for the DMB Certification of Residency which outlines the types of items necessary for the certification to be filed. It includes the following:
- Receipt for rent of a residential address.
- A record from a public utility for residential service.
- A bank or credit card statement.
- A paycheck stub.
- A document from a state or federal court.
- A record, receipt or bill requesting payment.
- Motel, hotel, campground or recreational vehicle park receipts showing that you have been residing in Nevada for at least 30 consecutive days.
- A Nevada Voter registration card.
- A document showing receipt of public assistance or benefits from a State of Nevada agency.
- Military Leave and Earnings Statement (LES) to evidence Nevada residency of applicant deployed outside of Nevada while serving on active duty.
- A student identification card from a Nevada educational institution.
The more of the Nevada residency ties you have the better.
Finally, California must be convinced you are not still a California resident even though you meet the Nevada requirements.
For instance, if you just file a tax return in Nevada but still have your primary residence in California, California will ignore your claim to be a Nevada resident and require you to file a California state tax return as a California resident. CFTB has a Form 1031 publication which has the following information:
“The California Tax Board begins with the underlying theory that you are a resident of the place where you have the closest connections.”
The following list which is published by the CFTB shows some of the factors you can use to help determine your residency status. Since your residence is usually the place where you have the closest ties, the CFTB recommends you compare your ties to California with your ties elsewhere. In using these factors, the CFTB indicates it is the strength of your ties, not just the number of ties, that determines your residency. This is a partial list of the factors to consider. No one factor is deemed to be determinative. The CFTB wants you to consider all the facts of your particular situation to determine your residency status.
Factors to consider are as follows:
- Amount of time you spend in California versus amount of time you spend outside California.
- Location of your spouse and children.
- Location of your principal residence.
- State that issued your driver’s license.
- State where your vehicles are registered.
- State where you maintain your professional licenses.
- State where you are registered to vote.
- Location of the banks where you maintain accounts.
- The origination point of your financial transactions.
- Location of your medical professionals and other healthcare providers (doctors, dentists etc.), accountants, and attorneys.
- Location of your social ties, such as your place of worship, professional associations, or social and country clubs of which you are a member.
- Location of your real property and investments.
- Permanence of your work assignments in California.
- Nevada must recognize you as a resident.
California wants tax dollars. If California challenges your claim to be a resident in another state, it will be through an audit. In that audit, you will be asked to provide your credit card statements, utility bills, and a host of other documents which will be used by the CFTB to determine your residency for tax purposes. The CFTB will inquire as to where you go to church, where you go work out, where you buy groceries, purchase gas, go to the movies, etc. A claim to no longer be a California resident must be backed by substantial proof that you are in fact a Nevada resident.