Frank A. and Carol L. Wagener

06-02

The taxpayers were physically present in New Mexico for more than 185 days in 2003, before moving to the state of Washington.  On their 2004 New Mexico personal income tax return, the taxpayers excluded from the income listed on Form PIT-B the income they earned while living in Washington in 2003.  The Department assessed the taxpayers for tax, penalty and interest on the excluded income.  The taxpayers protested the assessment and the Department abated the penalty and part of the interest.  Because the taxpayers were physically present in New Mexico for 185 days, they were required to file a resident New Mexico tax return, even though they were not domiciled in this state on the last day of 2003.  As New Mexico residents, the taxpayers were required by state law to allocate all their wage, interest and dividend income to New Mexico on Form PIT-B.  Their protest was denied.?