Vacation home owners who have residences in different states should be careful to make clear which house they call home, or they may trigger state income taxes in both places.

"It's an issue today with people shopping for low tax jurisdictions," says Dan Meehan, a tax partner at New Jersey-based J.H. Cohn LLP, an accounting, auditing, and consulting firm.

Meehan recommends that those who move from high-tax states to one with lower taxes take care to switch addresses on passports, voter registrations, automobile, registrations, and driver's licenses. They should file federal income-tax returns from their preferred address. It's also important that people spend more than six months in their chosen state and keep good records so they can demonstrate that.

Seven states - Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming - don't have a personal income tax. New Hampshire and Tennessee have only a very limited tax on some items.

Source: The Wall Street Journal, Arden Dale (05/31/07)