November 01, 2018

Taxes

I live in a home that I own. I have fallen behind on my property taxes, and the county has filed a tax lien on my home. I am afraid that my home might be sold at auction to pay the tax bill. Does the SCRA protect me?

I was sued in court for unpaid taxes on my home, and the court allowed my home to be sold at auction to pay the taxes. Do I  have the right to try to get my home back?

I own a condo and am behind on my homeowner’s association dues, but not on my taxes. Am I protected by the SCRA?

What is the difference between my “Home of Record” and my “State of Legal Residence”?  Are the two always the same?

My State of Legal Residence is Texas, but I am currently stationed in Florida. My car is licensed in Texas. Do I now have to license the vehicle in Florida, or pay extra taxes or fees for my car?

My State of Legal Residence is Texas, but I am currently stationed in Florida. I have a Texas driver’s license. Do I now have to get a Florida driver's license?

I live in a home that I own. I have fallen behind on my property taxes, and the county has filed a tax lien on my home. I am afraid that my home might be sold at auction to pay the tax bill. Does the SCRA protect me?

As with mortgage foreclosures, the SCRA prevents the forced sale of a servicemember’s real property without a court order. So if you are faced with the sale of your home to satisfy unpaid taxes or assessments, the sale should not occur without court action. If such a court action is filed, you may be able to halt the sale if you can prove that your military service materially affected your ability to pay the tax or assessment. The SCRA allows the court to stay or delay the collection of the tax or assessment, or the sale of your property, for the duration of your military service plus 180 days after you are released from military duty.

Note that the same protections also apply to personal property, so if an item of personal property (such as a vehicle) is subject to repossession and sale due to unpaid taxes or assessments, court action is required first.

Also important: Unpaid taxes and assessments, and liens filed to secure these, can incur a maximum interest rate of 6% per year. No higher interest rate can be applied, and no other penalties or fees may be assessed.

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I was sued in court for unpaid taxes on my home, and the court allowed my home to be sold at auction to pay the taxes. Do I  have the right to try to get my home back?

At any time during your military service or up to 180 days after you are released from service, you can file a court case to get back any real or personal property that you lost due to unpaid taxes or assessments. You will likely need a lawyer to file this case for you, and you will still be responsible to pay the unpaid taxes and interest on those taxes (capped at 6% per year). You should also ask about any right of redemption you may have under State law.

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I own a condo and am behind on my homeowner’s association dues, but not on my taxes. Am I protected by the SCRA?

A recent court case held that the SCRA rules governing foreclosure of tax and assessment liens apply also to situations involving unpaid homeowner’s association dues. If you have this problem, you should meet with a military legal assistance attorney to get additional advice and guidance. Make sure the homeowners’ association is aware of your SCRA rights.

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What is the difference between my “Home of Record” and my “State of Legal Residence”?  Are the two always the same?

Not everyone understands that “Home of Record” is a technical term used by DoD to designate the city and state where a soldier enters active duty. “State of Legal Residence” is typically the state that you consider to be your home – the place to which you plan to return if you are temporarily away from it. For most servicmembers, their State of Legal Residence and the state listed in their Home of Record are the same when they first enter active duty. During the course of a military career, a servicemember’s "Home of Record” will not change, but a servicemember’s  "State of Legal Residence" can change. State of Legal Residence is sometimes referred to as a servicemember’s “domicile” or “home state.”

For most citizens, the state where they live and work is treated as their state of Legal Residence for purposes of voting, taxation, and other legal matters. If a citizen moves to a new state and begins a new job there, the presumption is that the citizen now has a new “State of Legal Residence.” 

The SCRA protects servicemembers and their spouses from the automatic application of this rule  – at least for taxes and voting.  The presumption for servicemembers and their spouse is that their “State of Legal Residence” does NOT change when they move to a new state based on military orders. Servicemembers and spouses must take affirmative steps to establish a new State of Legal Residence.

Typically a change of legal residence occurs when you create significant legal connections to a new state that you now consider to be your home, and cut those same connections to the state listed in your home of record. One example of a significant legal connection is voter registration. There are many others – often referred to as “indicators of domicile.” A change of legal residence should be reflected in your military record and on your LES. A DD Form 2058 is used to make this change. To ensure that you properly make the change to your new state of Legal Residence, you should first consult with a military legal assistance attorney.  Failure to follow proper procedures or keep adequate records can create significant state income tax liability and other legal problems.

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My State of Legal Residence is Texas, but I am currently stationed in Florida. My car is licensed in Texas. Do I now have to license the vehicle in Florida, or pay extra taxes or fees for my car?

No. You are obligated to pay license fees and taxes on your vehicle only to your State of Legal Residence. You do not have to relicense it in the state where you are now stationed, so long as you have paid all of the licensing fees and taxes that are due to your State of Legal Residence.

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My State of Legal Residence is Texas, but I am currently stationed in Florida. I have a Texas driver’s license. Do I now have to get a Florida driver's license?

A state may require a person living within its borders to be licensed to drive in that state. Some states provide exemptions for servicemembers, and some do not. Unlike with vehicle licensing fees and taxes, the SCRA provides no protections here. Check with the state’s licensing department to find out the rules for your  state for both you (if you are a servicemember) and any of your dependents. You should do your best to keep your vehicle registration, driver’s license, and voter registration in the same state, since if you are ever involved in a dispute over domicile, or where you really live, those things will be examined to determine where you intend to live. If you need help figuring out these rules, check with a military legal assistance attorney.

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