Tax implications of owning empty land in a different state - do I need to file nonresident return?

You generally don't need to file a nonresident state tax return just for owning vacant land in another state. The key factor is whether you've received income from that state, not simply owning property there. Since you've only paid property taxes but haven't generated any income from the land, most states wouldn't require you to file a nonresident return. Property taxes are handled separately from income taxes and are paid to the local government where the property is located, which you've already done. These are typically not reported on state income tax returns. However, if you eventually sell the land and realize capital gains, or if you begin receiving rental income from it, then you would need to file a nonresident return in that state to report the income generated there.

I was in a nearly identical situation last year with vacant land I bought in Colorado while living in Texas. After weeks of stressing about state tax requirements, I finally used https://taxr.ai to analyze my situation. You upload your documents (I shared my property deed and tax statements) and their AI reviews everything to give you customized advice. The system quickly confirmed I didn't need to file a nonresident return in Colorado since I hadn't generated income there. It also explained exactly what would trigger a filing requirement in the future and gave me templates for record-keeping specific to my situation. Saved me so much headache trying to interpret vague tax guidance online!

Just wanted to follow up about my experience with taxr.ai after seeing it recommended here. I decided to try it with my complicated situation (vacant land in three different states). Honestly didn't expect much, but I was seriously impressed. The system immediately identified that one of my properties in New Mexico actually DOES require a nonresident return due to a specific state regulation about out-of-state owners with certain property classifications. The analysis also showed me exactly how to handle the property taxes on my federal return for maximum benefit. Would've completely missed these details otherwise. Definitely saved me from a potential audit headache down the road!

If you're having trouble getting clear answers about your specific state's requirements, I'd recommend using Claimyr (https://claimyr.com) to actually speak with someone at the state tax department. I tried calling the revenue department in Tennessee about my vacant land situation for WEEKS without getting through, then used Claimyr and had a callback from a state tax rep within 45 minutes. They have this system where they navigate the phone trees and wait on hold for you, then call you once they've reached an actual human. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The state tax rep confirmed I didn't need to file a nonresident return for just owning land with no income, and I got it in writing for my records.

I have to admit I was completely wrong about Claimyr. After dismissing it as a scam, I was still desperate to get an answer about my vacant land in Arizona, so I tried it anyway. Within 90 minutes, I got a call connecting me directly to someone at the Arizona Department of Revenue who actually knew what they were talking about. The agent confirmed that Arizona doesn't require a nonresident return just for owning vacant land with no income, but warned me that if I start any development activities or derive any income, I'd need to file. They even sent me an email confirmation I can keep for my records. After weeks of trying to get through on my own, this was a game changer.

One thing to watch out for - if you bought the land as an investment property (planning to sell it later for profit), some states consider that "doing business" in their state even if you're not actively generating income yet. Also, keep detailed records of all expenses related to the property (property taxes, maintenance, travel to inspect it, etc.) as these can become deductions when you eventually sell or start generating income.

Has anyone dealt with selling vacant land in another state? I'm about to sell my vacant lot in Florida (I live in Ohio) and wondering if I'll get hit with both states' taxes or just Florida?

Just to add another perspective - I've owned vacant land in two different states for about 3 years now and have never had to file nonresident returns. The key is really whether you're generating income from the property. However, I'd strongly recommend keeping detailed records of everything - property taxes paid, any maintenance or improvements, even travel expenses to visit the property if you're treating it as an investment. One thing that caught me off guard was that some counties will reassess property values more frequently for out-of-state owners, so your property tax bills might increase faster than expected. Also, make sure you're receiving all tax notices directly - don't rely on previous owners or real estate agents to forward important documents. I almost missed a supplemental tax bill that way. If you do decide to develop or sell the land eventually, having organized records from day one will save you a lot of headaches when calculating your cost basis and deductions.

I went through this exact situation two years ago when I bought vacant land in Nevada while living in California. The confusion is totally understandable because different states have varying thresholds for what constitutes a filing requirement. In most cases, you're correct that simply owning vacant land without generating income doesn't trigger a nonresident filing requirement. However, there are a few nuances to watch for: 1. Some states have minimum filing thresholds that are very low (like $600 in gross receipts), but this typically applies to business income, not property ownership. 2. A few states consider any property ownership as having a "business presence," but this is rare and usually applies to commercial properties or rental activities. 3. The property taxes you paid are indeed separate from income tax obligations and are handled at the county level, as you've already done. My advice would be to check the specific state's Department of Revenue website where your land is located, or call them directly if the information isn't clear online. Most states have pretty straightforward guidance on their websites about nonresident filing requirements. Keep all your property tax receipts and purchase documentation - you'll need them when you eventually sell or if you start generating income from the property. The good news is that in the majority of states, you're probably fine not filing a nonresident return for now, but it's worth confirming for your specific state to have peace of mind.

I'm dealing with a very similar situation right now - bought vacant land in Oregon while living in Washington, and the tax implications have been keeping me up at night! Reading through everyone's experiences here has been incredibly reassuring. What I've learned from my research (and confirmed by calling Oregon's Department of Revenue) is that Oregon follows the standard rule - no nonresident return required unless you have Oregon-source income. Just owning vacant land doesn't count as income generation. One thing I'd add to the great advice already shared: make sure you're on the county's mailing list for all property-related notices. I almost missed an important notice about a special assessment district formation that could have impacted my property taxes significantly. The county clerk's office can usually add you to their notification system. Also, consider setting up online access to your county's property records system if they have one. Many counties now offer online portals where you can view your property information, tax history, and even pay property taxes online. It's much easier than waiting for paper statements to arrive by mail, especially when you're out of state. Keep doing what you're doing with the property tax payments - that's really all that's required at this stage. The peace of mind from getting official confirmation from your state's tax department is definitely worth a phone call though!

I went through this exact same worry when I purchased vacant land in North Carolina while living in Virginia. After doing extensive research and speaking with a tax professional, here's what I learned that might help ease your concerns: You're absolutely right that simply owning vacant land typically doesn't trigger a nonresident state tax return filing requirement. The key distinction is between "owning property" and "earning income from property." Most states only require nonresident returns when you have state-source income - like rental income, business profits, or capital gains from a sale. The property taxes you're paying to the county are completely separate from state income taxes and don't create a filing obligation. Think of property taxes as a local fee for services (schools, roads, etc.) rather than an income-based tax. However, I'd strongly recommend doing two things for complete peace of mind: 1. Call the tax department in the state where your land is located and ask specifically about vacant land ownership. Most have helpful representatives who can give you a definitive answer for your situation. 2. Keep meticulous records of all property-related expenses (property taxes, any maintenance, travel costs to visit the property, etc.). When you eventually sell or develop the land, these records will be crucial for calculating your cost basis and potential deductions. One last tip: if you're holding the land as an investment, consider whether you want to start treating it that way on your federal return by deducting property taxes as investment expenses. This could provide some current tax benefit while you wait to develop or sell the property. You're being smart by researching this upfront rather than scrambling later!