In most of the tax systems in the world, tax is imposed on a taxpayer based on such taxpayer residence (Residency Taxation) and based on the jurisdiction the income was earned (Source Taxation).
Consequently, if you are a resident of a country, or a state for tax purposes, you will be subject to tax on your worldwide income, whatever source derived, at your country of residence. You may also be taxed at a jurisdiction where you earned income. In situations where a person paid tax at country of source, most often, the country of residency will provide tax credit for the amount paid at the country of source, to eliminate double taxation. Given that the state of residency imposes tax on the person’s worldwide income, it is crucial to understand how residency is determined, especially for individuals traveling for work, to avoid being subject to tax in more than one country, as a resident.
International – most of the countries in the world determine residency of an individual based on number of days present ion that country, and some countries also determine residency based on the “center of life” of the individual. Generally, if you are present in a country for 183 days or more (this is to say, 6 months and a half of a day), you are considered a resident of that country. A day for tax purposes is even a few hours, so it is theoretically possible for you to spend more than 183 days in more than one country.
Therefore, DAY COUNT COUNTS!
USA – in the US, you are a resident of a state if you domicile in that state. In some states (NY for example), you can also be considered a resident if you maintain a home in NY, AND you spent 183 days or more in that state (Statutory Resident). Stoping for coffee on the way to the airport from Connecticut to Newark airport, in a coffee shop (or to fill up gas at a gas station) in NY, counts as a day in NY. The potential double tax effect resulted in from being considered a resident in two states, one state as the state of domiciliary and the other as a statutory resident because of the time spent in that state, can be painful.
Therefore, DAY COUNT COUNTS!