If You Continue to Live in Your New York Home During the Summer Months, Have You Effectively Changed Your Domicile?
One retiree sells his family home, moves his belongings to his new Florida condominium, severs most of his New York ties and rents an apartment where he stays when he returns North each Summer. A second retiree also buys a Florida condominium but continues to live in his family home and to maintain substantial business and personal contacts in New York. Each October he visits Florida and in May returns home. The first retiree probably has effectively changed his domicile to Florida. The second probably has not. Most snowbirds fall somewhere in the middle of this scenario. This session discusses several "domicile" cases which have actually been litigated.
Thousands of New Yorkers retire and make Florida their new home each year.
This results in a substantial drain on New York State's economy. These economic
losses can be mitigated, to some extent, if some of the retirees are encouraged
to return to New York State for a substantial period of time each
Instead of encouraging the retiree to return to New York each year,
New York's tax policy does the direct opposite. Even when a New Yorker has
permanently changed his primary residence to Florida, if he returns to New York
State for more than 183 days during the year and maintains a New York home or
apartment, he must pay the same amount of New York income taxes that he would
have paid if he resided in New York the entire year.
Even where the
retiree is in New York for less than 183 days during the year, New York requires
him to pay a full year's income tax if he is unable to convince the taxing
authorities that his Florida home has become his permanent primary residence. In
other words, that he has become a bona fide Florida domiciliary by changing his
domicile from New York to Florida.
The New York State taxing authorities
are aggressively challenging New Yorkers who claim they have changed their
domicile to Florida but continue to maintain a New York home.
Florida-bound retirees follow a typical pattern. Prior to retirement, the
New Yorker spends winter vacations in Florida. Floridians refer to such a person
as a "snowflake". After retirement he stays in Florida for the winter months,
often buys a condominium or villa, but still retains his New York residence.
Floridians refer to such a person as a "snowbird". As time goes on, the retiree
finds that many of his friends have also moved to Florida, he becomes less
active in hometown matters, and lives in Florida most of the year. Often he will
have sold his New York residence and will stay at a hotel or with his family
when he visits New York. Floridians refer to such a person who lives in Florida
most of the year-round as a "rounder".
There are, of course, many
variations of the theme. At some point in the scenario the retiree is likely to
consider changing his official residence or what is commonly referred to as
"domicile" to Florida. This is most likely to occur when he is a "snowbird". The
retiree's major concern, of course, is the elimination of New York income taxes
during his lifetime and New York estate taxes on his death.
The key word
throughout this Seminar is "domicile". If a retiree remains "domiciled" in New
York, New York has greater control over him and his assets. On the other hand,
if the retiree effectively changes his domicile to Florida, Florida takes over
at least some of such control. Although the word "domicile" has been around for
many years and has been the subject of legal decisions and law treatises, there
is still great uncertainty in many factual situations as to whether or not a
change of domicile has actually occurred. Given a particular set of facts, some
courts and taxing authorities may say that a change of domicile has occurred,
while others may say that it has not.
"Domicile" was defined by
Roman Law to mean "in whatsoever place an individual has set up his household
goods and made the chief seat of his affairs and interests, from which, without
some special avocation, he has no intention of departing; from which when he has
departed, he is considered to be away from home, and to which when he has
returned, he is considered to have returned home."(1)
The concept of domicile has not changed much since the Roman days.
Domicile is characterized in the New York Tax Regulations as the place which an
individual intends to be his permanent home and the place to which he intends to
return whenever he may be absent. The Regulations provide that once established,
a domicile continues until the person moves to a new location with the bona fide
intention of making his fixed and permanent home there. But no change of
domicile results from a removal to a new location if the intention is to remain
there only for a limited time even if the individual has sold or disposed of his
former home. The Tax Regulations place the burden upon the person asserting a
change of domicile to show that he intended to change his domicile. A person's
declarations are given due weight, but they will not be conclusive if they are
contradicted by his conduct. As an example, the Tax Regulations point out that
the fact a person registers and votes in one place is important but not
necessarily conclusive, especially if the facts indicate that he did so merely
to escape taxation in New York. 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. The Tax Regulations state that in determining a person's
intentions, the length of time customarily spent at each location is important
but not necessarily conclusive.(2)
Although these regulatory rules are helpful in determining whether or
not a retiree has changed his domicile from New York to Florida, it is often
difficult to apply the domicile rules to particular facts. A retiree can best
judge for himself whether or not he is in a position to change his domicile by
reviewing the facts in actual cases where a change of domicile has been
The leading case in New York State was decided by the New York Court of
Appeals in 1908.(3) It
remains "good law".(4) It
holds that a written declaration of domicile evidences an intent to change
domicile if it is an expression of honest intention and not an intent to
deceive. Yet, some New York State tax auditors tend to give a written
declaration of Florida domicile made under oath and filed by the retiree in
Florida little weight where the retiree continues to maintain a residence in New
York State. They are wrong in doing so. The 1908 case involved Mrs. Newcomb.
During a period of thirty years, and until she was about eighty years of age,
her domicile was in New York City. She generally resided during the summer in
her home in New Orleans and resided during the Winter in her residence in New
York City. She wanted to make substantial bequests to Tulane University and was
concerned that the Will might be contested by her relatives. She consulted with
a Louisiana attorney, who advised her to change her domicile and advised her
that she could do so by making an express declaration in writing to that effect.
She signed a declaration stating that New Orleans was her permanent home and her
place of domicile.
Her Louisiana domicile was challenged. It was argued that Mrs. Newcomb
resided in New York City and merely visited New Orleans and that her later
visits to New Orleans differed in no material respect from those made earlier.
It was also argued that she sought to become a nominal resident of Louisiana
merely for the purpose of making a Louisiana Will and not for the purpose of
making a permanent home.
Likewise, a New York State tax auditor challenging a change of domicile to
Florida is likely to argue that the retiree continues to reside in New York and
merely is visiting Florida, and that the visits after the retiree purports to
change his domicile did not result in any substantial change of life-style. The
auditor is also likely to argue that the change of domicile was made for the
purpose of obtaining more favorable tax treatment.
The Court of Appeals in the Newcomb case rejected that approach in 1908.
Where the retiree maintains two homes, the retiree should be able to pick and
choose his permanent residence, and his motivation for doing so should not be
relevant. The Court of Appeals in the Newcomb case laid out the following rules
for determining domicile where the retiree maintains two residences:
* There must be a present, definite and honest purpose to give up the old and
take up the new place as the domicile.
* Every retiree may select and make his own domicile, but the selection must
be followed by proper action. Motives are immaterial, except as they indicate
* 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 whatsoever, provided there is an absolute and fixed
intention to abandon one and acquire another and the acts of the persons
affected confirm the intention.
* A retiree may elect between his winter and summer residence and make a
domicile of either, provided he acts in good faith.
* The right to choose implies the right to declare one's choice, formally or
informally as he prefers, and even for the sole purpose of making evidence to
prove what his choice was.
* 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 burden of proof rests upon the party who alleges a change of
Where the retiree chooses his Florida residence as his domicile he has a
method of evidencing that intention in a very clear and convincing way. He signs
a written declaration of domicile, sworn to before a notary public, and files it
with the Florida Circuit Court.(5) The
New York tax examiner should give such election substantial weight unless there
is reason to believe that the retiree has committed perjury.
Many "snowbirds" who change their domicile to Florida, yet retain their
northern residence, file a written declaration of domicile and meet the criteria
set forth in the Newcomb case. The retiree's desire to stay at his "old" home
when he visits New York State during the summer is not inconsistent with a bona
fide intention to change domicile to Florida, and the New York taxing
authorities should not penalize the affluent retiree who has the financial
ability to indulge in this convenience.
Moreover, there is no statutory basis to impose such a tax on the retiree
where the sole basis for the imposition of the tax is the retention of a
residence in New York. The income tax provisions refer both to an individual who
retains his New York domicile and to an individual who maintains a permanent
place of abode in New York state. In the latter instance, no income tax is paid
if the individual is not present in New York for more than 183 days. If it was
the intention of the Legislature to recognize a change of domicile only where
the individual did not retain his place of abode in New York it would have said
so. Furthermore, there would have been no reason to include the 183 day
provision in the tax law. The tax law would merely have subjected all persons
who maintain a permanent place of abode in New York State to taxation to the
same extent as a New York resident. The fact that a retiree retains his New York
"permanent place of abode" should not be controlling but rather only one factor,
among many, in weighing whether a change of domicile has occurred.
In 1977, the New York Court of Appeals held that Sam Brunner had effectively
changed his domicile from New York to France even though he retained a life
estate in his New York residence. This case is significant because the courts
require greater evidence of a change of domicile when there is an alleged change
of domicile from New York to a foreign country. Citing its 1908 Newcomb
decision, the court restated its position that the domicile issue "frequently
depends upon a variety of circumstances, which differ as widely as the
peculiarities of individuals".(7) Thus,
the fact that Mr. Brunner retained a residence in New York was viewed as only
one factor to consider, among many.
But in those instances where a dual residency is maintained and the taxing
authority determined no change of domicile has occurred, it may be difficult to
convince the New York court to reverse that determination, even where
there are several other factors indicating that a change of domicile has
occurred. This was illustrated in both the Zinn case and the Clute
The New York Tax Commission ruled that Solomon Zinn, who lived in both New
York and Florida, had not changed his domicile from New York to Florida. The
lower appellate court overruled the Commission and upheld Mr. Zinn's contention
that he was not domiciled in New York State and, therefore, not subject to New
York income taxes as a resident. The court relied on the fact that Mr. Zinn had
moved to Florida, maintained bank accounts and registered automobiles in
Florida, educated a school-age child there, and operated a business in Florida.
The court also noted that Mr. Zinn had executed a new Will indicating his
Florida residence and "most significantly" filed under oath a declaration of
domicile, and that a perjurious statement in such a statement could subject him
to a state prison term of up to 20 years. The court also noted that the record
documented Mr. Zinn's desire to sell his New York house and the difficulties
which preceded the sale. The Court of Appeals was not convinced and reversed the
lower appellate court, finding that there was substantial evidence in the record
to support the New York State Tax Commission's determination.(8) The
court pointed out that Mr. Zinn had filed a resident tax return (apparently by
mistake) and he remained active in the day-to-day management of a New York
business. It didn't make any difference that there was also substantial evidence
to support Mr. Zinn's position that he had changed his domicile. Where there is
substantial evidence both ways, the reviewing court generally sustains the
findings of the taxing authorities.
The Zinn case demonstrates the importance of winning the case at what
is now the New York Tax Tribunal level.(9) Where
the Tax Tribunal finds that there has been no change of domicile, it may be very
difficult to reverse that determination where the retiree retains a New York
residency and continues to conduct some business in New York. The "clear and
convincing test" in determining a change of domicile, coupled with the rule that
an appellate court sustain the Tax Tribunal when there is substantial evidence
to support it in the record, presents two formidable obstacles. In order to
increase his chances of being successful at an early stage, it is critical that
a retiree seek professional guidance as soon as he suspects any challenge to his
Another interesting case involved Mr. Clute.(10) Mr.
Clute was 64 years old and a life-long resident of New York. He lived in a home
which he owned and also owned two pieces of property nearby --- one having a day
cottage on it and the other a boat house. He also owned a residence as trustee
of his father's estate which he had been trying to sell since 1973. Because his
children had no interest in managing the family business, he decided that he
would sell it and moved into a condominium in Florida. The condominium was
furnished partly with personal property which Mr. Clute brought from his New
York residence and partly with property belonging to his wife, whom he recently
married and who previously resided in Florida. In 1977, Mr. Clute and his wife
sold their Florida condominium and bought a new one. Mr. Clute resigned from
various New York business clubs and joined various social clubs in Florida.
However, he continued to own the farm which he inherited from his father. His
son's family resided on the farm and he occupied it whenever business activities
required him to be in New York. Mr. Clute filed a declaration of domicile in
Florida stating that he had changed his domicile in 1976, registered to vote in
Florida, and filled out a juror questionnaire. He executed a codicil to his Will
reciting that he had changed his residence to Florida. He and his wife
registered their cars in Florida. He discontinued a safe deposit box in New York
and opened one in Florida. He opened checking and savings accounts in Florida,
paid a Florida intangible tax, and affiliated with a church in Florida.
The New York court noted that the Tax Commission relied primarily on two
factors in determining that Mr. Clute continued to be a New York domiciliary. He
did not abandon his New York home which he used more frequently during the two
taxable years in question than he did his Florida residence. Also, he spent a
considerable amount of time fulfilling his responsibility as a director at two
New York banks. The court noted that determining an individual's domicile is
ordinarily based on conduct manifesting an intent to establish a permanent home
with a permanent association in a given location, and that an individual's
original domicile continues until there is a clear manifestation of an intent to
acquire a new one. The court further noted that there was substantial evidence
to support both the position of Mr. Clute and that of the Tax Commission but, in
the limited scope of an appellate review, the court could not substitute its
judgment for that of the Commission, and there was substantial proof in the
record to sustain the Commission.
It may be very difficult for the retiree to establish a change of domicile if
he continues to carry on his profession during the summer months when he is in
New York State and has no intention to sell his New York home or discontinue his
practice. Dr. Feldman purchased a condominium in Boca Raton, Florida. He filed a
Florida Declaration of Domicile, registered to vote in Palm Beach County,
obtained a Florida driver's license, registered his car in Florida, joined a
Florida men's club, and moved most of his bank accounts to Florida. When he
moved to Florida he gave the apartment on the second floor in a two-family house
he owned in Brooklyn to his daughter and reconditioned a bedroom in the
downstairs office for his use whenever he returned to New York. The first floor
also contained a bathroom and small kitchen. He lived during the summer months
in a summer home on a lake near Monticello which was closed up the rest of the
When Dr. Feldman was in New York State he opened his office for a couple of
days a week and treated patients. The New York Tax Appeals Tribunal held that
Dr. Feldman continued to be domiciled in New York. The Tribunal focused on Dr.
Feldman's continued practice of medicine, and noted that "the practice continues
to exist and, in fact, serves as a continual tie to the local community" and
that Dr. Feldman falls "short of establishing by clear and convincing evidence
an intent to change domicile".(11)
The test of intent with respect to a purported new domicile has been stated
in some cases to be "whether the place of habitation is the permanent home of a
person, with the range of sentiment, feeling and permanent association with
is this test to be applied to the New Yorker who has a home both in New York and
Florida? Must he divorce himself from the emotional attachment to New York City,
Buffalo, Syracuse, or wherever else in the state he lived most of his life? Must
he remain passive when he hears the band play "New York, New York" for fear he
will be reported to the New York taxing authorities? Should he hesitate when
invited to the annual "Buffalo Night" in Boca Raton every winter where the
famous Buffalo chicken wings and beef on kimmelweck are served? Such a
subjective test is misplaced. It should be sufficient if the retiree really
feels comfortable and "at home" when in Florida and has elected to make Florida
his domicile. This right to elect a domicile should not be denied simply because
the retiree also feels comfortable and "at home" when he is living in New York
State during the summer.
One tax examiner mentioned that the true test is where the retiree keeps his
teddy bear. It would be great if it was that simple. Every retiree could buy a
teddy bear and keep it in Florida all year. But the tax examiner was obviously
speaking figuratively and was trying to describe the attachment one has to his
There are some instances where a change of domicile would rarely be
challenged. For example: the retiree sells his "family home" and moves all of
his furniture and personal belongings to a new home in Florida; he severs all
his New York ties; when he "visits" New York State each summer he stays in an
apartment. This scenario sometimes will occur, but is the exception.
The other extreme is where the retiree continues to live in his old New York
family home and retains all his belongings there. He rents or buys a Florida
condominium in a retirement community where he has no close acquaintances and
has no active involvement. Each October he visits Florida. Each May he
Most retirees find themselves somewhere in the middle. At first, they feel a
bit strange in the new environment. As time goes on they develop close
friendships with many people who live near the Florida home, many of whom may be
former New Yorkers. It doesn't take long to become fond of a Florida golf course
that is in your back yard. They soon find themselves thinking of both Florida
and New York as their home. At some point, they may even consider selling their
New York family home and staying in Florida all year round.
Two cases decided by the New York Tax Appeals Tribunal in 1990 and 1991 gave
conflicting signals to the retiree. The Sutton case(13)
decided in October 1990 appeared to indicate that retaining the New York home
would not create an insurmountable obstacle to the retiree who desires to change
his domicile to Florida. The Weschler case decided by the Tribunal in
May, 1991 appeared to indicate that it might, especially where the retiree
spends almost half the year in New York State. Although the same three
Commissioners decided both cases, they are difficult to reconcile with each
Elliott Sutton presented the following points in support of his change of
* He moved into a larger condominium in Florida and later listed it for sale
to buy a larger town house but because of a downturn in the economy deferred the
* He filed a Florida Declaration of Domicile.
* He registered to vote and actually voted although at times by absentee
* He belonged to a number of social clubs in Florida and no clubs in New
* He was very active in racing power boats in Florida.
* He stated in his Will that Florida was his domicile.
* Although he owned several retail stores in New York, he was not actively
involved in their ongoing operations and each was operated by an independent
* He decided to change his domicile because of the break-up of a long-term
relationship and the death of his mother and sister.
* He had negotiated to purchase a Florida restaurant chain but the sale was
* His son visited Florida on nearly every holiday.
* He maintained bank accounts in both states but the New York accounts were
primarily long-term trust accounts for his son.
* He initially continued to maintain a New York apartment because it provided
a relatively inexpensive alternative to obtaining hotel accommodations when he
came to New York. He later purchased a Manhattan condominium which he expected
to appreciate in value and which he was holding partly as an investment.
* Although some of his personal bills were paid at one of his New York
businesses, this was to assure prompt payment because he traveled frequently.
* He spent about 70% of his time in Florida and he traveled extensively.
The Division of Taxation argued that Sutton's general habit of life,
especially his failure to terminate certain business interests in New York and
his failure to give up his apartment in New York City, was so contrary to his
declaration of intent as to preclude the finding by the administrative law judge
that Sutton, by clear and convincing evidence, proved that he changed his
domicile. The three commissioners rejected these arguments and affirmed the
administrative law judge's determination in favor of Sutton.
Less than a year later, the same three commissioners affirmed the
determination of an administrative law judge against Dr. Herman Weschler(14). The
audit year was 1985. In June 1984, Dr. Weschler retired as a surgeon but
continued to perform some consulting services, earning $7,326 in 1985. Dr.
* He executed a Declaration of Domicile.
* He registered to vote in Florida and actually voted there.
* All his bank accounts and a safe deposit box were in Florida.
* He had a Florida driver's license and Florida car registration.
* He executed a Florida Will.
* He was a member of various Florida clubs.
* He was affiliated with physicians in Palm Beach county.
* He gave up his New York cemetery plot.
Dr. Weschler admitted that he maintained his New York home until October
1985, but stressed that his married son occupied the home as his primary
residence as a result of domestic problems and the need to provide living
quarters for himself and his four children. The Division of Taxation did not
take issue with the finding that Dr. Weschler had only spent 174 days in New
York in 1985.
In holding against Dr. Weschler, the Tax Tribunal stated:
"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. Weschler's limited
medical consulting and service oriented work to the VA Hospital and the nursing
home, militate against the conclusion that the petitioners intended to give up
their New York domicile and establish a new domicile in Florida in 1984."
The Tax Tribunal attempted to distinguish its own decision in Sutton
by pointing out that in that case Sutton had an explanation for retaining his
domicile (i.e., he was holding it as an investment). The Commission concluded
that although Weschler may have retained his home in late 1985 to accommodate
his son's marital problems, it did not serve as a reason for not selling the
house during the first ten months of 1985 since the marital problems did not
arise until the last two months of the year.
Rather than focusing on the retention of the New York home, the Tax Tribunal
might simply have based its holding on the fact that Dr. Weschler continued
medical consulting in New York. By stressing the fact of Dr. Weschler's home
prior to October 1985, the Tribunal implies that a retiree must have an
explanation or an excuse for retaining a New York home. But does this not
contradict the rules laid out in the Newcomb case by the New York Court
of Appeals in 1908? That decision should be binding on the Tax Tribunal even
today. Mrs. Newcomb needed no excuse for retaining her New York home. She could
retain both homes and make a good faith election as to her domicile at either
Conflicting decisions were also issued by the Tribunal more recently. They
involved two families in Western New York --- the Buzzards(15) and
In 1963, the Buzzards and their six children moved from their hometown of
Pittsburgh to Buffalo where Mr. Buzzard became president of a company that
distributes automotive parts and supplies. By 1983, the Buzzard family owned
100% of the outstanding shares of the business, several of their children were
active in the business and one son was named president. Mr. Buzzard became
chairman of the board. At that point, Mr. Buzzard became a consultant to the
company and his involvement in the day to day management of the company ended
and he ceased maintaining an office in Buffalo.
In 1978, the Buzzards' youngest child left home for college and they
purchased a three bedroom home in Boynton Beach, Florida and three years later
in 1981, the Buzzards sold their Buffalo home. The move to Florida was
precipitated in part by an injury to Mr. Buzzard's leg which reacted unfavorably
to cold weather. At first they rented a furnished home in Buffalo where they
stayed during the summer, but then decided to build a new home in Buffalo at
which they stayed when they were in the Buffalo area.
In 1982-83, the Buzzards executed a "Florida" Will, obtained a Florida
driver's license, registered to vote in Florida, were granted a Florida
homestead exemption and began filing Florida intangible tax returns and New York
non-resident income tax returns.
New York audited the Buzzards for the years 1985 through 1988. During the
year at issue, Mr. Buzzard served the company, for the most part, in an informal
manner. He drew upon his reputation in the industry and made contact with and
entertained parts dealers and customers and was active in industry trade
associations. Mr. Buzzard, an avid golfer, maintained a membership in two
Buffalo area country clubs where he entertained customers.
During the summer when he was in Buffalo, he generally went to the office
three or four days a week where he spent a few hours reviewing his mail and
conversing with employees.
The Buzzards' general pattern since 1982 was to spend the colder months in
Florida and then spend from about May through September in Buffalo. They also
had short stays in Buffalo at other times of the year, including two to three
weeks during December. The days in New York were 116 (1985), 131 (1986), 156
(1987) and 140 (1988).
The Buzzards had weak ties to their neighbors in New York and had developed
substantial social ties to their neighbors in Florida.
Applying the test in the Newcomb case, one would have thought this was
an "open and shut" case. The Buzzards had two homes and had elected Florida as
their domicile. Not so, held the Administrative Law Judge in a 1992 opinion. The
Judge stressed that the Buzzards retained deep and substantial ties to the
Buffalo area, notwithstanding the sale of their residence in 1981. The strongest
of these ties was their close relationship with their children and grandchildren
who were a central part of their lives. The Judge also stressed that the home
that the Buzzards built after they claimed to have changed their domicile was
"more than simply a summer home" so that they could return to the Buffalo area
at any time of the year.
Finally, the Judge stressed the involvement in the family business in 1981
when the Buffalo home was sold and downplayed the inactive role of Mr. Buzzard
that commenced in 1983.
As might be expected, the Buzzards appealed to the New York Tax Tribunal. The
Tribunal affirmed. The Buzzards then appealed to the Appellate Division of the
New York Supreme Court. The Court also affirmed and sustained the assessment of
the additional taxes(17).
Among other things it noted: "Most significantly, during the years in question
petitioners spent more time in New York than in Florida." You will recall that
the Buzzards did not even come close to the "183 days test". But they also spent
a lot of time elsewhere. During the audit period they only proved they had spent
94 days in (1985), 98 days in (1986), 115 days in (1987) and 140 days in (1988)
in Florida. The Supreme Court also noted that Mr. Buzzard continued as a paid
consultant of his company, frequently visiting the company's office when in
Buffalo, continuing to maintain membership in two Buffalo country clubs,
continuing to maintain master charge accounts in Buffalo stores and had his
primary bank accounts in Buffalo banks. The Court also noted that the Buzzards
engaged Buffalo attorneys and accountants and that their primary physician was
located in Buffalo.
The Court completely ignored the close family ties to children and
grandchildren that was stressed by the Administrative Law Judge.
The Supreme Court did recognize that the Buzzards had established strong
contacts with Florida, but held that the Court was not at liberty to substitute
its judgment for a reasonable determination by the Tribunal which was supported
by substantial evidence merely because it is possible to reasonably reach a
Now let us look at the Burke case. The same Tax Appeals Tribunal that
required the Buzzards to pay New York Taxes, recognized the change of
domicile by the Burkes to Florida.
Mr. Burke formed Burke Construction in the early 1950's and by the 1970's was
building upwards of 100 or more homes a year in Western New York. In 1977, Mr.
Burke began the transition from building houses to developing low income housing
for the elderly and formed Burke Rental. By the 1980's he had acquired ownership
of approximately 30 rental properties.
Mr. Burke purchased a home in Jonathan's Landing in Florida. Their goal was
to retire in a stable retirement community in Florida. The Burke's had many
friends in Florida with similar lifestyles and social activities. They had few
friends remaining in New York. They enjoyed fishing and playing golf year-round,
were actively involved in various community and charitable activities in Florida
and were involved in only limited charitable activities in New York.
The Burkes were audited for the years 1987 through 1989. The Administrative
Law Judge held that, notwithstanding that the Burkes maintained some ties to New
York, a taxpayer may change his domicile without severing all ties to New York
State and the Burkes did so by moving their "focus of home" from New York to
Florida. He noted that they had moved their most important personal possessions
and memorabilia to Florida and that they actively sought to distance themselves
from the operation of their New York business interests and configured their
business to be managed by others. The Judge also noted that the Burkes did not
retain significant family ties to New York and maintained their New York
residence as a secondary summer home.
The Division appealed to the Tax Appeals Tribunal, but lost. The Tribunal
agreed with the Administrative Law Judge and held in favor of the Burkes quoting
at some length the 1908 Newcomb case we discussed at the onset of this
session. The Tribunal also cited the Sutton case we also discussed and
held that a "taxpayer may change his or her domicile without severing all ties
to New York State" and did so by "moving their focus of home from New York to
In their briefs, both parties presented an analysis of Florida telephone
bills that showed that on average one or two telephone calls per week were made
from the Burke's Florida telephone to the New York office of Burke Rental and
varied in length from one minute to 45 minutes. The Division claimed that the
telephone calls undermined the testimony that Mr. Burke's business was run
autonomously by the office staff without Mr. Burkes' active decision making
intervention. The Burkes maintained that the calls related to personal matters
and that the total phone time amounted to approximately eight hours per year, an
amount insufficient to constitute active involvement in running a several
million dollar business operation. The Tribunal deferred to the Administrative
Judge's determination that the Burke's explanation of the telephone calls was
credible and that the facts did not indicate that Mr. Burke's active involvement
in the business was required. The Tribunal noted testimony showing that Mr.
Burke's active involvement would have undermined the staff.
Most significantly the Tribunal found that the "fact the Burkes continue to
maintain a large New York residence, and did not sell their original New York
home until 1987, does not indicate that they could not have intended to
effectuate a change in domicile." The Tribunal at the end of its 25 page opinion
"The Burkes retired in 1985, became passive in their business interests and
retired to a stable Florida retirement community. The Administrative Law Judge
found that petitioners were ready to change' to a hands-off, relaxed and
recreation/social-oriented lifestyle' in contrast to the long work days and
lifestyle the Burkes maintained while they lived in New York prior to 1985." The
Tribunal held that the Burkes had proved their case in a "clear and convincing
It is difficult to reconcile the Buzzard and Burke cases and
establish guidelines upon which to rely. With all these cases as a background,
let us again address the question which is the title of this session: "If you
continue to live in your northern home during the summer months, have you
effectively changed your domicile to Florida?"
The answer requires an evaluation of all the other ties that the retiree
continues to have with New York. It may be difficult to win the case if the
domicile change is contested where the retiree continues to have
substantial ties to New York. The retiree's chances of success will
improve if other domicile factors support his position.
The approach an auditor will likely take in evaluating these
domicile factors is discussed in some detail in session 7 of the Seminar. As
discussed in that session, the auditors are now instructed that the sole fact a
retiree retains a home in New York is not inconsistent with a change of
domicile to Florida. A check list approach for preparing for such an audit is
set forth in session 2.
If you wish to be further confused, you will also want to
review the following cases:
Matter of Colin W. & Delma K. Getz (18)
The Tax Appeals Tribunal determined that "while the petitioners
may have very well intended Florida to be their permanent domicile, their
general habit of life indicated, at best, an equal commitment to both
locations." Thus, it held they did not establish by clear and convincing
evidence that there was a change in domicile to Florida. Further, the Tribunal
noted that the taxpayers failed to submit adequate documentation, such as credit
card slips to support the claim that they did not spend more than 183 days in
New York and that upon retirement they continued to maintain their house and
country club membership in New York after they purchased a Florida condominium
and made numerous trips to New York in order for the petitioner to serve as a
bank director and to spend time with their son. * * *
Kartiganer v. Koenig(19)
The Court determined that the petitioners had not proven a change
of domicile from New York to Florida. Although the Court gave consideration to
the petitioners' "formal" Florida residence declarations such as voter
registration, address on will, licenses, etc., it noted that the petitioners'
informal acts, namely, petitioner husband's active involvement in his New York
engineering business and the maintenance of their New York home, contradicted
their declarations. It also noted that many factors indicated that they failed
to abandon their New York domicile and sever their ties to New York and the most
significant factor was the petitioner's constant supervision and review of his
business interest in New York. The record below had established that the
petitioner reviewed contracts and gave advice on personal liability and past and
future projects and that internal controls required his approval of all
projects, his supervision of progress, check points of on-going projects and his
final review before submission to clients. Thus, the evidence in the record
clearly showed the petitioner retained overall control of his New York business
interest. * * *
Matter of Silverman(20)
The Tax Appeals Tribunal decided that the taxpayers were still
domiciliaries of New York for 1978 through 1982 noting that the taxpayers
maintained their historical New York home as well as extensive business and
social ties to New York throughout this period and that although efforts were
made to sell the New York home, it was not clear how serious these efforts were,
calling into question the taxpayers' intention to abandon their New York
domicile. * * *
Matter of Kornblum(21)
The New York Tax Appeals Tribunal held that the Kornblums did not effectively
change their domicile to Florida. They had purchased a Florida condominium
shortly after Mr. Kornblum retired. Mr. Kornblum obtained a Florida driver's
license, voted in Florida, obtained a local library card and became active in
the condominium association. The Tribunal did not consider this enough and
* they moved no household furnishings from the New York home to Florida
* they continued electric, telephone and other services in the New York home
while in Florida and traveled between the two locations throughout the year
* they continued to maintain their safe deposit box in a New York bank, held
two New York bank accounts and left their investments for management by the New
York office of a national investment service
* Mrs. Kornblum continued to treat with a New York physician The
Kornblums appealed to the New York Supreme Court (Appellate Division) but lost.
The Court recognized that the evidence could be viewed as supporting a change of
domicile, but refused to substitute the Court's judgment for the Tribunal. * * *
Matter of Getz(22)
Mr. Getz owned a five-bedroom home in a suburb of Albany. In 1983, when he
was age 61, he decided for health and other reasons to retire from the New York
Telephone Company, purchase a two-bedroom Florida condo and change his domicile
to Florida. He continued to own his New York home. He signed a Florida
declaration of domicile and changed his voter's registration, driver's license
and car registration. Mr. Getz was active in numerous community organizations
and resigned from most of them except that he continued to maintain a resident
membership at the Albany Country Club so he could use the golf course and
continued as a director of the bank. Mr. Getz resided in Florida from late
October to early May. He was a director of a New York bank and testified he
traveled to New York at various time during the winter months to attend board
Mr. Getz testified that he did not sell his New York home because
he would have incurred a substantial capital gains tax, and that since it was
not his principal residence he would not be entitled to the $125,000 capital
gains tax exclusion but on his death his estate would receive a stepped-up
basis. He also testified that the New York home not only provided a place for he
and his wife to stay when they visited New York, but also a residence for their
unmarried son. He also testified that he furnished the Florida condo with new
furniture because it required an entirely different style of furnishings. Proof
was also submitted that he was active in his Florida condominium association and
served as its president and was also active in some other Florida organizations.
The Administrative Law Judge held against Mr. Getz, stating that the conduct
most problematic but not conclusive was his maintenance of the New York home,
regular returns to New York and his ongoing relationship with the bank and
country club. On appeal, the Tax Appeals Tribunal affirmed and noted, among
other things, the contention that the record makes clear that many strong
emotional ties to New York conflicted with Mr. Getz's efforts to demonstrate his
intention to change his domicile to Florida. * * *
Matter of Rauscher(23)
The Tribunal affirmed the Administrative Law Judge, holding that the change
of domicile was not effective based on the fact that:
* the taxpayer maintained an investment in a New York real estate business
and retained a New York attorney as "trustee" for the properties
* received mail in New York
* employed a secretary in New York
* maintained a New York phone number (apparently for business purposes)
* kept cars registered in New York
* retained New York bank accounts The Tribunal noted that the
taxpayers failed to introduce any evidence as to their general habits of life,
e.g., social ties, and that the declaration of domicile, Florida
registration and homestead exemption were not sufficiently persuasive. * * *
In July 1997 the Tax Appeals Tribunal decided the Aldo Gucci
issue was whether Mr. Gucci had effectively changed his domicile from New York.
The Tribunal quoted at some length from a New York Supreme Court case.(25) It
may be helpful to cite this language whenever the domicile auditor argues that a
change of domicile was not effective because the retiree always intended to
return to New York at some future indefinite date. The court noted:
"`The intention necessary for acquisition of a domicile may not be an
intention of living in the locality as a matter of temporary expediency. It must
be an intention to live permanently or indefinitely in that place. But it need
not be an intention to remain for all time; it is sufficient if the intention is
to remain for an indefinite period.' (25 Am. Jur. 2d Domicile @ 25, at 19[1966.)
"When a person has actually removed to another place, which is his fixed
present residence, with an intention of remaining there for an indefinite time,
it becomes his place of domicile, notwithstanding he may have a floating
intention to return to his former domicile at some future and indefinite time.
(28 C J S Domicile @ 11, at 19[1941 1911941].)
"Though the idea of permanency is sometimes involved in the domicile concept,
the term "domicile" is more safely defined in the negative rather than
affirmative. A person's domicile is the place he is making his home not with a
present intention to remain there forever, but 'without' a present intention of
leaving at some particular future time. (Siegel, Practice Commentary, McKinney's
Cons. Laws of N.Y., Book 58A, SCPA 103, p. 21.)" (Matter of McKone v. State Tax
Comm., supra, 490 NYS2d at 630.)
"The importance of establishing intent was articulated by the Court of
Appeals when, in Matter of Newcomb (192 NY 238), it stated: "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."
A retiree who contemplates a change of domicile should meet with his
professional advisor and discuss in detail the retiree's background and the
facts that prompt a change of domicile. It is necessary that a convincing
scenario be presented. The results in the cases reviewed in this session often
turned on the "spin" given to the facts. In a recent tax case, the
Administrative Law Judge in holding in favor of the retiree recognized that the
same set of facts can often be interpreted differently:
"The difficulty in deciding this case stems from the interpretation or, to
quote the vernacular, the "spin", which is placed on the actions of petitioners
during the years in issue. There is no doubt that the actions were genuine and
petitioners' intent honest, the real issue is whether those factors provide
clear and convincing evidence of the change. Although the Division of Taxation
raised many valid points, it is determined that petitioners have established a
change of domicile..."(26)
Before any contact is made with a domicile auditor --- be truthful --- but
make sure the facts have the most favorable "spin" from the outset.
HOMES OUTSIDE NEW YORK
ARE NOT ENOUGH TO CHANGE
NEW YORK DOMICILE
The Tax Appeals Tribunal in 1998
once again has relied on the venerable Newcomb case in applying the
(27). The taxpayers claimed that their social and family life
was centered in New Jersey and St. Croix, that they owned expensive homes in
both places, and that they had many private business projects outside of their
primary New York employment. Not enough. The Tribunal noted their children went
to New York schools and that New York City was a constant in their lives "around
which all else orbited". Relying on the Newcomb case, the Tribunal ruled
that there must be a union of intention and residence and that here the
intention was missing. There was no "absolute and fixed intention to abandon one
[domicile] and acquire another".
CAUTION: Many of the decisions
reviewed in this session discuss in detail the surrounding facts. Only the
highlights have been cited. Before relying on any decision it should be reviewed
in its entirety since facts not recited may either be helpful or harmful.
Several domicile cases are decided by the Tax Appeals Tribunal and the New York
Supreme Court (Appellate Division) each year. The latest decisions should be
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1. Wade v. Wade, 93
Fla. 1004, 113 So. 274(1927).
2. 20 NYCRR 105.20(d). The New York Surrogate's Court
Procedure Act defines domicile as a fixed, permanent and principal home to which
a person wherever temporarily located always intends to return. SCPA
103(15). The Florida Probate Code defines domicile as a person's usual place
of dwelling (
3. Matter of
Newcomb, 192 N.Y. 238, 43 N.E. 950 (1908).
4. For example, see Matter of the
Estate of Brunner, 41 N.Y.2d 917, 363 N.E.2d 346 (1977).
Stat. 222.17. The Florida Probate Code defines domicile as a person's usual
place of dwelling (
6. Deliberately Omitted.
7. Matter of Estate of
Brunner, 41 N.Y.2d 917, 394 N.Y.S.2d 621, 363 N.E.2d 346 (1977).
8. Zinn v. Tully, 54
N.Y.2d 713, 442 N.Y.S.2d 990, 426 N.E.2d 484 (1981).
9. The New York Tax Commission was replaced by the Tribunal
10. Clute v. Chu, 106
A.D.2d 841,. 484 N.Y.S.2d 239 (3rd Dept. 1984)
11. Matter of Sol and Lillian Feldman, Tax Appeals
Tribunal dec. (Dec. 15, 1988).
12. Matter of Bodfish v.
Gallman, 50 A.D.2d 457, 378 N.Y.S.2d 138 (1976).
13. Matter of Elliott and
Ghislaine Sutton, 1989 Tax Case J-1261.
14. See Wechsler, N.Y. Tax Appeals Tribunal
15. See Buzzard, DTA
16. See Burke, DTA 810631
17. Buzzard v. Tax Appeals
Tribunal, 205 A.D.2d 852, 613 N.Y.S.2d 294 (3rd Dept. 1994).
18. Matter of Getz,
19. Matter of
Kartiganer, 194 A.D.2d 879, 599 N.Y.S.2d 312 (Third Dept. 1993)
20. Matter of
21. Matter of
Kornblum, 500 N.Y.S.2d 158 (A.D.3rd 1993).
22. Matter of Getz,
New York Tax Appeals Tribunal, DTA 809134 (July 10, 1993).
23. Matter of
Rauscher, New York Tax Appeals Tribunal, DTA 810567 (May 12, 1994).
24. Matter of Gucci,
DTA 812160; 1997 N.Y. Tax Lexis 303 (July 10, 1997).
25. Matter of McKone v.
State Tax Commission, 111 A.D.2d 1051, 490 N.Y.S.2d 628, aff'd 68 N.Y.2d
638, 505 N.Y.S.2d 71.
26. Matter of
Mariani, 1996 N.Y. Tax Lexis 567 (December 2, 1996).
27. Matter of Smith and
Groh, 1998 WL 433458 (N.Y. Tax App. Trib.) DTA No. 810532 and