RECENTLY ON TOL:
- A tumblr site dedicated to the people and places that make up Oregon and Southwest Washington.
We ended up in Oregon on military orders. At the time, I was the only income earner in our household, being the active duty member.
Military members are exempt from state income tax as they are considered residents of the states in which they enlisted, in my case, Texas. The first year that my spouse earned income in Oregon, we filed a joint return with the state of Oregon. Our taxes seemed very high--in fact, higher than our federal responsibility. We called DOR to question their assessment. In a nutshell, this is how we were assessed:
We were told that I was not taxed because I was active duty.
I earned roughly $50k that year.
My spouse earned roughly $35K for the part of the year that he worked.
My spouse was taxed at the rate of our combined income bracket, at $85K. The DOR rep told us that my income, "had not been touched." When asked why OR taxes weren't based on the $35K earned in Oregon, we were told that taxes were based on the household earnings, but no money was taken from the active duty member's pay.
Seems to me this is double speak. If taxes are 10% (for simplicity's sake) and I earn $200 and my spouse earns $100, but I am tax exempt, then we should be taxed $10 based on the resident's income. However, if you tax the resident at the household earning level and supposedly leave the AD member's pay untouched, then the resident is now taxed as though he earned $300 would have to pay $30.
If my AD nonresident income were subject to taxes, I would also be liable for 10% or $20 of my pay. If my spouse and I filed jointly, we would be assessed at the $300 tax bracket and assessed $30 at 10%.
So, it seems to me that the State of Oregon engaged in a sleight of hand or mathematical prestidigitation. They did this to us every year of my active duty service in this state despite my being a Texas resident the entire time.
When I asked around, everyone, from the rep at H&R block to the state employees, to a friend who had served in the legislature, to the shipmates at my unit, they all said the same thing. "That's just the way they do it."
If this is truly the "way they do it," how long has the state been fleecing nonresident active duty military members and their families and what will they do to compensate for their overzealous taxing measures?
posted 2 years, 12 months ago
view in context