Gov. Doug Ducey is proposing that military retirees not be required to pay income taxes on their retired pay. Great idea: It should benefit Arizona.
You see, as a snowbird (part time in Arizona and part time in Minnesota) I claimed residency in the lower tax state, Arizona, paying Arizona income taxes, with just $3,500 of my retired pay exempt from income taxes.
Then Minnesota, where I spend about six months of my time, voted to exempt retired pay from all income taxes. So, I figured it out to spend more time in Minnesota than in Arizona and applied to become a Minnesota resident.
Minnesota won, because with my other income, I still pay some Minnesota income tax. Arizona lost, and I pay no Arizona tax as I have no Arizona income.
I’m certain if Arizona military retirees are exempt from taxes on all of their military income, they will either remain an Arizona resident, or return here as a resident from states that do not exempt retiree pay.
Thus, Arizona may gain in taxes, as the retirees pay Arizona on other income they receive.
Ted Storck, Commander, U.S. Navy retired