This article by three Proskauer Rose lawyers is from the January 2019
Florida Bar Journal, and cited in the October 31, 2019 New York Times article concerning the abrupt change of domicile filed by President* DONALD JOHN TRUMP.
Quo vobis videtor?(Latin for, "What do y'all reckon?")
MOVING FROM NEW YORK TO FLORIDA: PERFECTING DOMICILE
Recently, due in large part to the effective repeal of the state and local tax deduction (a/k/a the SALT deduction),1 New York domiciliaries have become increasingly interested in changing their domicile from New York to Florida. While it may be easy enough for an individual to buy a home in Florida and move, the act of physically moving to Florida is only part of the battle. The real challenge is proving by clear and convincing evidence that the individual is no longer a New York domiciliary and does not qualify as a New York statutory resident for New York State income tax purposes. This article explains the concept of domicile and the New York statutory resident test, and highlights the actions needed to effectively change domicile from New York to Florida.
Concept of Domicile
An individual may decide to change domicile from New York to Florida for various reasons, including: personal reasons, such as proximity to family, retirement, health issues, new job or a change in climate; tax reasons, such as moving from a state with income and estate taxes, (e.g., New York) to a state without income and estate taxes (e.g., Florida); and asset protection reasons, such as homestead and tenancy by the entirety protections in Florida. The common law defines one’s domicile as “living in [a particular] locality with intent to make it a fixed and permanent home… ‘[D]omicile’ requires bodily presence in that place and also an intention to make it one’s domicile.”2 The common law interpretation of domicile is subjective and, therefore, somewhat unpredictable. New York regulations provide little additional guidance, defining domicile as “the place which an individual intends to be such individual’s permanent home — the place to which such individual intends to return whenever such individual may be absent.”3
Once established, an individual’s domicile continues until moved to a new location “with a bona fide intention of making such individual’s fixed and permanent home there.”4 This echoes the common law, which was stated in Matter of Newcomb, 192 N.Y. 238, 250 (N.Y. 1908): “The existing domicile, whether of origin or selection, continues until a new one is acquired.” In Keveloh v. Carter, 699 So. 2d 285 (Fla. 5th DCA 1997), Florida’s domicile law was similarly summarized as:
“[a] legal residence or ‘domicile’ is the place where a person has fixed an abode with the present intention of making it his or her permanent home. Once established, a domicile continues until it is superseded by a new one. A domicile is presumed to continue, and the burden of proof ordinarily rests on the party asserting the abandonment of one domicile to demonstrate the acquisition of another.”5
The subjective nature of determining one’s domicile makes any determination of domicile a fact-intensive inquiry.6
Because the determination of an individual’s domicile is a question of fact, two or more states may conclude an individual is domiciled within their state.7 The Supreme Court has found that the Constitution does not prohibit two or more states from each concluding that an individual is a domiciliary for state tax purposes.8 Therefore, when changing domicile, it is critical to not only successfully establish the new domicile, but also to terminate or negate any factors that could lead another state from asserting domicile. Taking these steps will help insure only one state can successfully assert the individual is domiciled in that state. Failure to do so may subject the individual to taxation in multiple states.9
At common law, when it comes to changing domicile, “[m]otives are immaterial, except as they indicate intention” and actions must be “genuine.”10 New York courts have held that “a change of domicile may be made through caprice, whim, or fancy, for business, health, or pleasure, to secure a change of climate, or a change of laws, or for any reason whatever, provided there is an absolute and fixed intention to abandon one and acquire another, and the acts of the person affected confirm the intention.”11
Accordingly, there are two elements that must be established to prove a change of domicile: 1) abandonment of the old domicile and acquisition of a new domicile; and2) actual change of residence.12 It is not enough to intend to change domicile, but rather the individual must also actually reside in the new location. Similarly, residing in a new location without the intent to make it the individual’s domicile is not sufficient.13 There is no definitive period of time that an individual must be in a location to establish a domicile.14
For example, in Matter of Richard and Hazel Rubin, New York Department of Taxation, DTA No. 817675 (Oct. 30, 2003), the taxpayers sold their New York home in July 1994 and intended to move to Connecticut, but were unable to find a suitable home in Connecticut until June 1995. New York’s Tax Appeals Tribunal ruled that the taxpayers remained domiciled in New York until June 1995 when they closed on their Connecticut home even though they did not maintain a residence in New York in the interim.15 Conversely, in Matter of Patrick, New York Department of Taxation Appeals, DTA No. 826838 (June 15, 2017), the taxpayer reconnected with a high-school sweetheart and abruptly retired from his job to move to Paris to be with her, all while maintaining an apartment in New York City. Despite spending many nights in New York during the relevant period (some of which were related to medical treatment), the tax appeals tribunal determined that the taxpayer changed his domicile upon moving to Paris based on his application to become a French resident and the absence of family or “near and dear” items in New York.16
To prove a change of domicile, the asserting party must prove the change of domicile by clear and convincing evidence.17 As previously mentioned, proving domicile is a fact-intensive inquiry. New York’s Appellate Division has stated that “no single factor is controlling and the unique facts and circumstances of each case must be closely considered.”18 In Matter of Rudolph (Deceased) & Loretta Zapka, New York Department of Taxation Appeals, DTA No. 804111 (June 22, 1989), the taxpayers argued they changed their domicile from New York to Florida, but they had strong ties to both New York and Florida. New York’s Tax Appeals Tribunal stated that “[t]he mere fact that persuasive arguments can be made from the facts in support of both Florida and New York as petitioners’ domicile indicates that they have not clearly and convincingly evidenced an intent to change their New York domicile.”19 Accordingly, establishing strong ties in a new location may not be sufficient evidence of intent if strong ties are continued with the old domicile.
Therefore, an individual wishing to change domicile should take a number of steps to help prove the change by clear and convincing evidence. To evidence the intent necessary to change domicile from New York to Florida, an individual should take the following steps:
• File a “Declaration of Domicile” in the office of the circuit court in the county of residence and file a copy or a “Declaration of Non-Domicile” with New York.
• Sign a new will and other estate planning documents to ensure such documents comport with and are governed by Florida law. In addition, the will should recite that the individual is a resident of Florida.
• Register to vote in Florida and vote as soon as eligible in all elections. The voter’s registration in New York should also be cancelled.
• Own or lease and occupy a dwelling in Florida. While not necessary, it is helpful if the individual can sell, gift, or rent the home located in New York. Any residential lease in Florida should be for at least 12 months to avoid any inference that he or she is merely a seasonal resident and not a permanent resident of Florida.
• With respect to the Florida property, apply for a homestead exemption afforded only to residents of Florida.20
• Open bank accounts and safe deposit boxes in a bank in Florida. This change should be reflected on account statements, as well as on checks and credit cards.
• Register automobiles, airplanes, and boats in Florida and obtain an “unrestricted” Florida driver’s license as well as a Florida boater’s license (if applicable).
• File federal income tax returns with the IRS in the Atlanta Service Center using the individual’s Florida address, and file a final individual income tax return in New York using the new Florida address on the return.
• Change address on insurance policies to the individual’s Florida address.
• Change social, religious, and other national organization memberships to affiliations or branches in Florida and register as a nonresident member with such organizations in New York if possible.
• Never request any discount available only to residents of New York, such as school tuition or state senior citizen discounts.
• Ideally, all business should be transacted in Florida. Use the individual’s Florida address in email signatures, on letterhead, and in transaction documents.
• Spend as much time as possible in Florida, ideally, at least six months and a day. Individuals should keep a diary or log of the days spent in Florida. Additionally, individuals should refrain from using credit cards, bank accounts, and telephones in New York. If the individual is a member of a country club in New York, he or she should use the club in such a way that there are no questions regarding the duration of time spent in New York versus Florida.
It should be noted, however, that decisions from the Department of Taxation have stated that “certain declarations may evidence a change of domicile,” but that those declarations “are less persuasive than informal acts which demonstrate an individual’s general habit of life.”21 Accordingly, every small decision can affect an individual’s domicile.22 Therefore, individuals should even take care to relocate personal effects, like family pictures and heirlooms, to Florida, hire a Florida attorney and accountant, and use Florida health-care providers.
New York Statutory Resident Test
The concept of domicile contrasts with that of residency, as an individual may reside in multiple residences. Inherently, one cannot intend to return to each of these residences as his or her permanent home. In order to combat the subjectivity inherent to the definition of domicile, New York relies on the concept of a statutory resident to impose its income tax on such individuals. Accordingly, once an individual has changed his or her domicile from New York to Florida, it is important, for income tax reasons, to ensure that such individual does not qualify as a New York statutory resident. Similar to New York domiciliaries, New York statutory residents must report income from all sources and pay New York State income tax thereon, regardless of where the income is generated or the nature of the income.23 An individual is a New York statutory resident if he or she maintains a permanent place of abode andspends more than 183 days of the taxable year in New York, unless such individual is in active service in the armed forces of the United States.24 New York’s highest marginal tax rate is 8.82 percent, which does not include the additional income tax charged on residents of New York City, which is 3.876 percent. contrast, Florida does not have a state income tax.
An individual may be considered to be “maintaining” a residence if such individual contributes toward expenses of a residence he or she does not own but in which he or she resides. Additionally, for a residence to be a permanent place of abode it must be suitable for human habitation year round, e.g., a vacation residence that is not suitable to live in during the winter months is not a permanent place of abode.25Further, New York regulations provide that the residence must be maintained for substantially all of the taxable year, i.e., a period exceeding 11 months.26
In Gaied v. New York State Tax Appeals Tribunal, 22 N.Y.3d 592 (2014),the court analyzed the concepts of maintaining a place of abode. In this case, the individual owned and paid all expenses for a multi-family apartment on Staten Island that was within two miles of his business. He testified that he acquired the building as an investment property and to provide a residence for his elderly parents. The taxpayer insisted that he never lived at the apartment and did not keep any clothing or other personal effects there, nor did he have sleeping accommodations at the apartment. He stayed at the apartment only on occasion (at his parents’ request to attend to their medical needs) and, when doing so, he would sleep on the couch. The other two apartments in the building were leased to tenants. The court of appeals ruled in favor of the taxpayer and concluded that “for an individual to qualify as a statutory resident, there must be some basis to conclude that the dwelling was utilized as the taxpayer’s residence.”27
In addition to maintaining a permanent place of abode in New York for substantially all of the year, the individual must spend more than 183 days of the year in New York. For this purpose, spending one minute in New York constitutes a full day, unless such presence is solely for the purpose of 1) boarding a plane, ship, train, or bus for travel to a destination outside of New York state;28 2) continuing travel that started outside New York state and ends at a point outside New York state, e.g., travel from Ohio to Vermont that passes through New York;29 or 3) obtaining medical treatment other than for outpatient care.30 For purposes of calculating the 183 days, on April 12, 2018, Gov. Andrew Cuomo signed the New York state budget bill31 that provides that, as of 2019, all days in the year, including those while an individual is a New York domiciliary, are counted to determine if the statutory resident test is met, i.e., they count toward the 183-day requirement. New 605 of the New York tax law will read as follows:
“A resident individual means an individual…(B) who maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the taxable year in this state, whether or not domiciled in this state for any portion of the taxable year, unless such individual is in active service in the armed forces of the United States.”32
Domicile Audits
After changing domicile, New York may challenge the individual’s nonresident filing status for income tax purposes via an income tax audit. During an audit, three issues are examined, starting with the domicile of the individual. If it is determined that the individual is not domiciled in New York, the next issue is whether the individual is a New York statutory resident. If the individual is determined to be a New York statutory resident, the third issue is the allocation of income. The scope of the audit will be based on the facts involved.
The State of New York Department of Taxation and Finance publishes guidelines detailing New York law and regulations concerning residency and discussing audit policies and procedures. The guidelines aim to ensure uniformity and consistency in the examination of nonresident returns and are issued primarily to provide guidance to audit staff.33
In determining domicile, the guidelines require the auditor to examine two general categories: primary factors and other factors.34 There are five primary factors: the home; active business involvement; time; items “near and dear”; and family connections. If the auditor has not reached a supportable conclusion based upon the five primary factors, the auditor will examine “other” factors, including, but not limited to:35
• Citation in legal documents, such as wills, that a jurisdiction is the place of domicile.
• Address at which bills, financial statements and correspondence concerning other family business is primarily received.
• Physical location of safe deposit boxes used for family records and valuables.
• Location of auto, boat, and airplane registrations and driver’s or operator’s licenses.
• Where the individual is registered to vote and whether he or she has exercised that right.
• Possession of a New York City Parking Tax exemption.
• Telephone services at each residence, including the nature of the listing, the type of service features and activity at the location.
With respect to the first primary factor, the home, the auditor will evaluate the individual’s use and maintenance of a New York residence compared to his or her use and maintenance of the non-New York residence. The auditor will look at whether the residences are occupied or rented and the approximate values and sizes of the residences. The mere retention of a residence in New York is not, by itself, sufficient evidence to negate a change of domicile.36
With respect to active business involvement, the auditor will analyze the individual’s pattern of employment and the source of his or her compensation. In today’s electronic world, involvement in New York businesses can take place in New York or from afar. An otherwise absent person whose primary factors other than active business involvement point toward non-New York domiciliary status should not be treated as a New York domiciliary simply by reason of long-distance contacts with business activities in New York.37
In analyzing the time factor, the auditor will review the individual’s calendar and travel to determine if he or she was in New York more than 183 days. The individual’s overall living pattern will be examined including daily calendar entries, E-Z Pass and cell phone records, credit card bills, and any other documents that provide evidence of where the individual was located at any given day.38 Regarding items that are “near and dear,” the auditor will examine where an individual keeps items having significant sentimental value (e.g., family heirlooms, works of art, collections of books, stamps and coins, jewelry, and pets).39 Finally, the auditor will consider the residence of the individual’s family (spouse and children).40 The location where minor children attend school can be a critical factor.41 Because an analysis of an individual’s familial connections could be intrusive, the auditors are instructed not to request this information until the other primary factors have been evaluated.42
If, based on the factors described above, the auditor determines that the individual is not a domiciliary of the state of New York, the auditor will analyze whether the individual is a statutory resident based on the test previously discussed. Accordingly, after changing domicile from New York to Florida, it is important for an individual to document his or her location each day to have proof that they are under the 183-day limit imposed by the statutory resident test.
Conclusion
As evidenced by the discussion herein, it is a misconception that it is easy to change domicile from New York to Florida. Upon deciding to change domicile, there are many steps that should be taken to ensure that the change is respected by both New York and Florida. Taking affirmative steps to move one’s property and contacts out of New York is critical to avoiding undesired consequences, such as dual domicile treatment or taxation by New York. Additionally, after changing domicile, individuals should consult with their advisors to ensure they do not run afoul of New York’s statutory resident rule. taking these steps, individuals can help prevent a potentially painful and expensive audit process and, if an audit does occur, can be well-positioned to show that they have changed domicile away from New York.
1Tax Cuts and Jobs Act (TCJA), P.L. 115-97, 11042 (the amount of the deduction for state and local taxes is limited to $10,000 (or $5,000 if married filing separately)).
2 Matter of Newcomb, 192 N.Y. 238, 250 (N.Y. 1908).
3 N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(d)(1).
4 N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(d)(2).
5 Keveloh, 699 So. 2d at 288.
6 Newcomb, 192 N.Y. at 250.
7 See Dorrance’s Estate, 163 A. 303 (Pa. 1932), cert. den., 287 U.S. 660 (1932), 288 U.S. 617 (1933).
8 See Cory v. White, 457 U.S. 85 (1982) (same holding in the state estate tax context).
9 See id.; see also Texas v. Florida, 306 U.S. 398 (1938) (wherein four states claimed that the decedent was a domiciliary of their state for state estate tax purposes).
10 Newcomb, 192 N.Y. at 251.
11 Id.
12 Aetna National Bank v. Kramer, 126 N.Y.S.2d 970 (3d Dept. 1911).
13 Bodfish v. Gallman, 378 N.Y.S.2d 138, 140 (3d Dept. 1976).
14 See State of New York Department of Taxation and Finance, Nonresident Audit Guidelines at 10 (June 2014).
15 Matter of Richard and Hazel Rubin, New York Department of Taxation, DTA No. 817675.
16 Matter of Patrick, New York Department of Taxation Appeals, DTA No. 826838.
17 Bodfish, 378 N.Y.S.2d at 140; see also St ate of New York Department of Taxation and Finance, Nonresident Audit Guidelines at 12 (June 2014).
18 Ingle v. Tax Appeals Tribunal of Dep’t of Taxation & Fin. of State, 973 N.Y.S.2d 877, 879 (3d Dept. 2013) citing Newcomb, 192 N.Y. at 250-251.
19 Matter of Rudolph (Deceased) & Loretta Zapka, New York Department of Taxation Appeals, DTA No. 804111.
20 If the individual is domiciled in Florida before January 1 of a given year and owns Florida residential property, he or she is entitled to a $50,000 reduction in the assessed value of such property for property tax purposes. Fla. Const. art. VII, 6(a). In addition, the assessed value for property tax purposes of homestead property cannot be increased by more than 3 percent annually. Fla. Const art. VII, 4(d)(1).
21 Matter of Campaniello, New York Department of Taxation Appeals, DTA No. 825354 (July 21, 2016).
22 See Ingle v. Tax Appeals Tribunal of Dep’t of Taxation & Fin. of State, 973 N.Y.S.2d 877, 879 (3d Dept. 2013) (“[N]o single factor is controlling and the unique facts and circumstances of each case must be closely considered.”).
23 See N.Y. Tax Law 612 (referring to the resident’s federal gross income); see also I.R.C. 61 (“gross income means all income from whatever source derived”).
24 N.Y. Tax Law 605(b)(1)(B).
25 N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(e)(1).
26 N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(a)(2); Nonresident Audit Guidelines, State of New York — Department of Taxation and Finance at 67-68 (June 2014).
27 Gaied, 22 N.Y.3d at 592. The court remitted the matter to the Appellate Division, Third Department, with directions to remand the proceeding to the New York State Tax Appeals Tribunal for further proceedings in accordance with the opinion.
28 N.Y. Comp. Codes R. & Regs. Tit. 20, 105.20(c); see also State of New York — Department of Taxation and Finance, Nonresident Audit Guidelines at 63 (June 2014). The guidelines provide the following examples: 1) an individual who acquires a permanent place of abode on March 15 of the taxable year and spends 184 days in New York State would not be a statutory resident since the permanent place of abode was not maintained for substantially the entire year and 2) an individual who maintains a permanent place of abode at the beginning of the year but disposes of it on October 30 of the tax year would not be a statutory resident despite spending over 183 days in New York. See id.
29 See State of New York Department of Taxation and Finance, Nonresident Audit Guidelines at 68 (June 2014).
30 Id. at 68-69. “This would include situations where an incompetent person is placed in a facility in New York, situations where the individual suffers a medical emergency while present in the state for other purposes and the patient cannot realistically be removed from the state, or a situation where an individual is confined to an institution as a result of seeking treatment in New York.”
31 Part O of Ch. 59, Laws of 2018, NY S07509-C, 2018-2019, Gen. Assem. (NY 2018).
32 Id. (emphasis added)
34 See id. at 14-41.
35 See id. at 38.
36 See id. at 15-21.
37 See id. at 23; see also id. at 22-25.
38 See id. at 25-29.
39 See id. at 29; see also id. at 29-31.
40 See id. at 32.
41 Id.
42 See id.
![Photo of David Pratt]( "Photo of David Pratt")
DAVID PRATT is chair of the Private Client Services Department of Proskauer Rose LLP and the managing partner of the firm’s Boca Raton office. ![Photo of Lindsay Rehns]( "Photo of Lindsay Rehns")
LINDSAY A. REHNS is senior counsel in Proskauer Rose’s Boca Raton office. ![Photo of Daniel Hatten]( "Photo of Daniel Hatten")
DANIEL HATTEN is an associate in Proskauer Rose’s New York office.
DAVID PRATT is chair of the Private Client Services Department of Proskauer Rose LLP and the managing partner of the firm’s Boca Raton office. 
LINDSAY A. REHNS is senior counsel in Proskauer Rose’s Boca Raton office. 
DANIEL HATTEN is an associate in Proskauer Rose’s New York office.
