The Foreign Service Journal, January-February 2022

AFSA NEWS 68 JANUARY-FEBRUARY 2022 | THE FOREIGN SERVICE JOURNAL The State Department withholds an employee’s state taxes according to his or her “regular place of duty” when assigned domestically—for details, see “New Procedures for Withholding and Reporting Employees’ State and Dis- trict of Columbia Income Taxes,”Announcement No. 22394 (Nov. 4, 2014; available via the intranet). This announce- ment reflects some jurisdictions’ imposition of income taxes on nonresidents who derive income within their boundaries despite residence or domicile elsewhere. Members residing or domiciled in a jurisdiction other than the one in which they earn income may need state taxes to be withheld for their residence and domicile jurisdictions. If you reside or are domiciled in a jurisdic- tion other than that of your regular place of duty, you may secure an exemption from this withholding method by satisfying the requirements detailed by CGFS Knowledge- base (available via the intranet at http://kb.gfs.state.gov/) Issue 39479. Note that the Bureau of the Comptroller and Global Financial Services does not adjudicate state income tax elections when you are serving overseas, since in those cir- cumstances, it is the employee’s responsibility to accurately designate a state for which income taxes will be withheld. On the employee’s return to a domestic assignment, how- ever, CGFS will evaluate the employee’s state tax withhold- ing election based on his or her new official domestic duty station pursuant to Announcement No. 22394. Finally, this determination does not mean that you must relinquish your state of domicile if it is different from your official duty station.“Domicile” and “residence” are differ- ent from“regular place of duty.”As long as you maintain your ties to your home state, you will be able to change your withholding back, if you wish, to your home state when you go overseas. See the Overseas Briefing Center’s guide to Residence and Domicile, available on AFSA’s website at www.afsa.org/domicile. n TAX WITHHOLDING WHEN ASSIGNED DOMESTICALLY STATE OVERVIEWS ALABAMA Individuals domiciled in Alabama are considered residents and are subject to tax on their entire income regardless of their physical presence in the state. Alabama’s individual income tax rates range from 2 percent on taxable income under $500 for single taxpayers and $1,000 for married fil- ing jointly, to 5 percent over $3,000 for single taxpayers and $6,000 for married filing jointly. Write: Alabama Department of Revenue, 50 N. Ripley, Montgomery AL 36104. Phone: (334) 242-1170, Option #1 Website: https://revenue.alabama.gov Email: Link through the website, About Us then Email Us. ALASKA Alaska does not tax individual income or intangible or per- sonal property. It has no state sales and use, franchise or fidu- ciary tax. However, some municipalities levy sales, property and use taxes. Write: Tax Division, Alaska Department of Revenue, P.O. Box 110420, Juneau AK 99811-0420. Phone: (907) 465-2320 Website: www.tax.state.ak.us ARIZONA Individuals domiciled in Arizona are considered residents and are taxed on any income that is included in the Federal Adjusted Gross Income, regardless of their physical presence in the state. Arizona’s tax rate ranges in five brackets from 2.59 percent, 4.5 percent of taxable income over $327,263 married filing jointly or $163,632 for single filers, to a maxi- mum of 8 percent for taxable income over $500,000 for joint filers and $250,000 for single filers. Write: Arizona Department of Revenue, Customer Care, P.O. Box 29086, Phoenix AZ 85038-9086. Phone: (602) 255-3381 Website: www.azdor.gov Email: taxpayerassistance@azdor.gov ARKANSAS Individuals domiciled in Arkansas are considered residents and are taxed on their entire income regardless of their physi- cal presence in the state. The Arkansas tax rate ranges in six brackets from a minimum of 2 percent to a maximum of 5.9 percent of net taxable income over $79,300. Write: Department of Finance and Administration, Income Tax Section, P.O. Box 3628, Little Rock AR 72203-3628. Phone: (501) 682-1100 Website: www.arkansas.gov/dfa Email: individual.income@dfa.arkansas.gov