Hey Eric..

I  just received a notice from the State of California stating that I owed them back taxes for 2003 plus penalties and interest.  I worked on a yacht that was at Driscol's Boatyard in San Diego for about 4 months back then, but it was a Cayman Island Flagged vessel, and I was being paid by a Cayman Islands Company, through a Merril Lynch office in CA.  I was the only US citizen on board, the rest were Kiwi.  My state of residence at the time was in Key West Florida, and thats how I reported it on my federal return that year.

Question:  Do I owe state taxes to California for the time I spent working on the vessel there in 2003?  What about all the other states we visited (Washington, 1 month, Alaska, 2 1/2 months, Florida, 1 month?).   Does anyone have any insight?  This is new to me.  I thought as a yacht-in-transit we were exempt from local taxes.

Thanks.