Tax Appeals Tribunal

State of New York

 

IN THE MATTER OF THE PETITION OF HERMAN AND ROSALIND WECHSLER

for Redetermination of a Deficiency or for Refund of Personal Income Tax under

Article 22 of the Tax Law for the Year 1985.

File No. 806431

TSB-D-91(11)I

May 16, 1991

 

Opinion

The Administrative Law Judge determined that petitioners had failed to establish by clear and convincing evidence an intent to change their domicile from New York to Florida for the year at issue and concluded that petitioners were taxable as residents of New York, pursuant to Tax Law § 605(a)(1), for the year 1985.

On exception, petitioners allege that they changed their domicile from New York to Florida in December 1984. As such, petitioners argue that the Division of Taxation (hereinafter the "Division") improperly applied Tax Law § 605(a)(1) and 20 NYCRR 102.2(a)(1) instead of Tax Law § 605(a)(2) and 20 NYCRR 102.2(a)(2) since petitioners established, by clear and convincing evidence, that they were not domiciled in New York in 1985, and spent less than 183 days in New York in 1985. In addition, petitioners assert that the Administrative Law Judge incorrectly distinguished decisions of the former State Tax Commission from the facts presented by petitioners.

The Division argues that the facts do not establish a clear intention on the part of petitioners to change their domicile prior to 1985, and, therefore, that the determination of the Administrative Law Judge should be sustained.

We affirm the determination of the Administrative Law Judge for the reasons set forth below.

Former Tax Law § 605(a), in effect during the period at issue, defined a resident individual as one:

"(1) who is domiciled in this state, unless (A) he maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this state, or ...
(2) who is not domiciled in this state but 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, unless such individual is in active service in the armed forces of the United States."

The Tax Law does not contain a definition of domicile (cf., SCPA 1103[15] ). However, the Division's regulations (20 NYCRR 102.2[d] ) provide, in pertinent part, as follows:
"Domicile. (1) Domicile, in general, is the place which an individual intends to be his permanent home--the place to which he intends to return whenever he may be absent. (2) A domicile once established continues until the person in question moves to a new location with the bona fide intention of making his fixed and permanent home there. No change of domicile results from a removal to a new location if the intention is to remain there only for a limited time; this rule applies even though the individual may have sold or disposed of his former home. The burden is upon any person asserting a change of domicile to show that the necessary intention existed. In determining an individual's intention in this regard, his declarations will be given due weight, but they will not be conclusive if they are contradicted by his conduct. The fact that a person registers and votes in one place is important but not necessarily conclusive, especially if the facts indicate that he did this merely to escape taxation in some other place.
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(4) A person can have only one domicile. If he has two or more homes, his domicile is the one which he regards and uses as his permanent home. In determining his intentions in this matter, the length of time customarily spent at each location is important but not necessarily conclusive. As pointed out in subdivision (a) of this section, a person who maintains a permanent place of abode in New York State and spends more than 183 days of the taxable year in New York State is taxable as a resident even though he may be domiciled elsewhere."

Subdivision (e)(1) of said regulation defines permanent place of abode as:
"... a dwelling place permanently maintained by the taxpayer, whether or not owned by him, and will generally include a dwelling place owned or leased by his or her spouse. However, a mere camp or cottage, which is suitable and used only for vacations, is not a permanent place of abode" (20 NYCRR 102.2 [e][1] ).

In order to create a change of domicile, both the intention to make a new location a fixed and permanent home and actual residence at that location must be present (Matter of Minsky v. Tully, 78 AD2d 955, 433 NYS2d 276). The substance of the matter was stated long ago by the Court of Appeals in Matter of Newcomb (192 NY 238, 250):

"Residence means living in a particular locality, but domicile means living in that locality with intent to make it a fixed and permanent home. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile.

The existing domicile, whether of origin or selection, continues until a new one is acquired and the burden of proof rests upon the party who alleges a change. The question is one of fact rather than law, and it frequently depends upon a variety of circumstances which differ as widely as the peculiarities of individuals.... In order to acquire a new domicile there must be a union of residence and intention. Residence without intention, or intention without residence is of no avail. Mere change of residence although continued for a long time does not effect a change of domicile, while a change of residence even for a short time with the intention in good faith to change the domicile, has that effect.... Residence is necessary, for there can be no domicile without it, and important as evidence, for it bears strongly upon intention, but not controlling, for unless combined with intention, it cannot effect a change of domicile.... There must be a present, definite and honest purpose to give up the old and take up the new place as the domicile of the person whose status is under consideration. ... every human being may select and make his own domicile, but the selection must be followed by proper action. Motives are immaterial, except as they indicate intention. A change of domicile may be made through caprice, whim or fancy, for business, health or pleasure, to secure a change of climate, or 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.... No pretense or deception can be practiced, for the intention must be honest, the action genuine and the evidence to establish both, clear and convincing. The animus manendi must be actual with no animo revertendi.
... This discussion shows what an important and essential bearing intention has upon domicile. It is always a distinct and material fact to be established. Intention may be proved by acts and by declarations connected with acts, but it is not thus limited when it relates to mental attitude or to a subject governed by choice."

These basic principles have been restated and refined in numerous cases by a variety of courts in the years since they were laid down by the Court of Appeals (see, Matter of Zinn v. Tully, 54 NY2d 713, 442 NYS2d 990, revg 77 AD2d 725, 430 NYS2d 419; Matter of Brunner v. Hochman, 41 NY2d 917, 394 NYS2d 621; Matter of Babbin v. State Tax Commn., 67 AD2d 762, 412 NYS2d 455, affd 49 NY2d 846, 427 NYS2d 788; Matter of Klein v. State Tax Commn., 55 AD2d 982, 390 NYS2d 686, affd 43 NY2d 812, 402 NYS2d 396; Matter of Bodfish v. Gallman, 50 AD2d 457, 378 NYS2d 138; Matter of Nask, Tax Appeals Tribunal, September 29, 1988).

The test of intent with respect to a purported new domicile has been stated as "whether the place of habitation is the permanent home of a person, with the range of sentiment, feeling and permanent association with it" (Matter of Bodfish v. Gallman, supra). Moves to other states in which permanent residences are established do not necessarily provide clear and convincing evidence of an intent to change one's domicile (Matter of Zinn v. Tully, supra).

Applying these basic principles to the facts presented here, we find that petitioners have failed to meet their burden of establishing by clear and convincing evidence their intention to change their domicile prior to 1985. While a review of the facts indicates that petitioners took many steps towards establishing Florida as their domicile (e.g., filing a Declaration of Domicile, automobile registration, driver's licenses, bank accounts, voting registrations, etc.) these formal declarations, which may be self-serving, must be considered in conjunction with the informal acts which show an individual's "general habit of life" (Matter of Trowbridge, 266 NY 283, 289; see also, Matter of Silverman, Tax Appeals Tribunal, June 8, 1989). The factors which weigh most heavily against petitioners are the retention of their home in Eastchester, New York and their return thereto for approximately six months in 1985. Petitioners' unexplained retention and use of their New York home for most of 1985, combined with Dr. Wechsler's limited medical consulting and service-oriented work to the VA Hospital and the nursing home, militate against the conclusion that petitioners intended to give up their New York domicile and establish a new domicile in Florida in 1984 (cf., Matter of Sutton, Tax Appeals Tribunal, October 11, 1990 [where the petitioner's competent and credible testimony as to his intention to change his domicile to Florida, including an explanation of his retention of an abode in New York, in combination with evidence of the general conduct of his life during the period at issue, was found to establish the petitioner's change of domicile] ).
Petitioners' claim that but for the domestic problems of their son, they would have sold their residence in New York. This assertion is not supported by the record. Petitioners waived a hearing and this matter was submitted to the Administrative Law Judge for determination based on documentary evidence and briefs. Petitioners' affidavit dated October 16, 1989 states that petitioners' son occupied the home in Eastchester, New York "since December 1985." The affidavit submitted by petitioners' son indicates that his need to use the New York property as his residence arose in October 1985, when he became separated from his wife. Petitioners' son's use of the house starting in October 1985 (or December 1985) does not explain petitioners' retention and extensive use of the house during the first ten months of 1985. [FN2] Under these circumstances, petitioners' proof of their intentions with regard to giving up their New York home falls short of establishing by clear and convincing evidence that the requisite intent to change their domicile to Florida occurred in December 1984.

We turn next to petitioners' assertion that the Administrative Law Judge improperly distinguished the facts in Matter of Rush (State Tax Commn., September 28, 1983) and Matter of Sacks (State Tax Commn., February 6, 1985) from the facts submitted by petitioners. We disagree.

As previously stated, determinations of change of domicile are questions of fact which depend on a variety of individualized circumstances (Matter of Newcomb, supra, at 250). In the decisions cited by petitioners, the former State Tax Commission found that the petitioners in those cases had established the requisite intention to change their domicile, as well as the actual fact of a change. Each has facts which distinguish it from the case presented here.

For example, in Matter of Rush (supra), the petitioner (husband) changed his domicile from New York to Florida by purchasing a home before attempting to establish such change, setting up bank accounts, registering his car, and joining various business organizations in Florida. Although the petitioner's wife remained in their New York home to care for her ill mother, the facts indicate that Mr. Rush's change in domicile coincided with a relocation of his employer to Florida. Subsequent to the death of Mrs. Rush's mother, the petitioners sold their home in New York State. It was not unreasonable for the Commission to conclude that but for the illness of Mrs. Rush's mother, the Rush family would have moved to Florida and relinquished its significant ties to New York State through the sale of their New York home at the time of Mr. Rush's relocation.

In Matter of Sacks (supra), it is again the totality of the facts presented which supports the former State Tax Commission's conclusion that the petitioner was a non-domiciliary of New York. In particular, the petitioner adequately explained his remaining ties with New York. For example, although the petitioner retained his former permanent place of abode during the year in question, it was the residence of his wife, from whom he was in the process of getting divorced. The Commission noted that although the petitioner spent time in New York during the year in question, none of that time was spent at the former marital premises.

Unlike Matter of Sacks and Matter of Rush, petitioners' proof in the matter before us fails to contain an adequate explanation of their remaining New York ties. As a result, petitioners have failed to prove by clear and convincing evidence that they intended to change their domicile from New York to Florida prior to 1985.

Accordingly, it is ORDERED, ADJUDGED and DECREED that:
1. The exception of petitioners Herman and Rosalind Wechsler is denied;
2. The determination of the Administrative Law Judge is sustained;
3. The petition of Herman and Rosalind Wechsler is denied; and
4. The Notice of Deficiency dated November 17, 1987 is sustained.

DATED: Troy, New York