UPDATED: Morgan Sets Up Legal Residence in Dallas

by James Gordon  on Friday, May. 18, 2007 4:50 pm  

Update:
More than just setting up legal residence in Dallas, Acxiom Spokesman Kelly Bass said Friday afternoon that Acxiom CEO Charles Morgan’s intentions are to move and live there.
He’ll have to, according to John Theis, assistant revenue commissioner at the Arkansas Department of Finance & Administration. Theis said an Arkansas resident can’t simply change their driver’s license, voter registration and vehicle registration to another state in order to avoid paying Arkansas state taxes.
State Supreme Court precedent dictates that, in order to determine if an individual has successfully abandon Arkansas in favor of another state, the change of residence has to pass the “totality of the circumstances” test, which factors in where the individual spends most of his time, where he buys groceries, where he goes to church and where he works, Theis said.
Does that mean Morgan has given up on continuing as company leader of Acxiom, assuming the company headquarters will remain in Little Rock after the private equity sale?
Not necessarily, according to Bass. Morgan can perform much of his job remotely as long as he has a high-speed Internet connection and a telephone. In fact, he already has.
“He has had periods of time when he has been at his house in Mexico and has been an extremely effective CEO,” Bass said.
Theis couldn’t recall a precedent of an individual working for and earning income from an Arkansas-based employer while living outside the state boundaries and not paying state taxes. He said it would be “a unique situation that would merit us looking into.”
Shares of Acxiom (Nasdaq: ACXM) closed at $27.78 on Friday after opening at $27.82.

Original Story:
A spokesman for Acxiom Corp. of Little Rock confirmed Friday that Company Leader Charles Morgan has set up legal residence in Dallas “in the last couple of months.”
Spokesman Kelley Bass said Morgan transferred his legal residence at the recommendation of financial advisors who "for years...have been urging him to move his residence where he would have a lower tax burden."
According to the Texas Comptroller’s office, Texas has no personal income tax or capital gains tax.
Arkansas, however, has a 7 percent personal income tax rate for those in the highest tax bracket. Its long-term capital gains tax, based on 70 percent of a person's income, can be between 1 percent and 7 percent. Short-term capital gains, based on full income, is between 1 percent and 7 percent.
That means, if the sale of Acxiom to ValueAct Capital Partners and Silver Lake Partners goes through, Morgan stands to gain substantially — tax free — from the sale of the 3 million shares he directly or indirectly owns.
Bass said that Morgan still owns his home in Little Rock. He also owns a home in Cabo San Lucas, Mexico.
Shares of Acxiom (Nasdaq: ACXM) were trading at $27.72 on Friday after closing at $27.95 on Thursday.

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Should the alcohol amendment remain on the ballot?