Use your browser's "back" button to return to the text.Matter of SUTTON
STATE OF NEW YORK-TAX APPEALS TRIBUNAL
October 11, 1990
OPINION: Tax Law @ 605 (former [a]), in effect for the years at issue, provided, [*12] in pertinent part, as follows: n2 "Resident individual. A resident individual means an individual: (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."
n2 The Personal Income Tax imposed by Chapter 46, Title T of the Administrative Code of the City of New York is by its own terms tied into and contains essentially the same provisions as Article 22 of the Tax Law.
Therefore, in addressing the issues presented herein, unless otherwise specified, all references to particular sections of Article 22 shall be deemed references (though uncited) to the corresponding sections of Chapter 46, Title T.
While there is no definition of "domicile" in the Tax Law (cf., SCPA 1103[15]), the Commissioner's regulations [*13] (20 NYCRR 102.2[d]) provide, in pertinent part: "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.
* * * (4) A person can have only one domicile. If he has two or more homes, his domicile is the one which [*14] 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."
Permanent place of abode is defined in the regulations at 20 NYCRR 102.2(e)(1) 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."
To effect a change in domicile, there must be an actual change in residence, coupled with an intent to abandon the former domicile and to acquire another (Aetna National Bank v. Kramer, 142 App Div 444, 126 NYS 970). Both the requisite intent as well as the actual residence at the new location must be present (Matter of Minsky v. Tully, 78 AD2d 955, 433 NYS2d 276).
The test of intent with respect to a purported new domicile has been stated as "whether the place of habitation is the [*15] permanent home of a person, with the range of sentiment, feeling and permanent association with it" (Matter of Bodfish v. Gallman, 50 AD2d 457, 378 NYS2d 138, 140 quoting Matter of Bourne's Estate, 181 Misc 238, 41 NYS2d 336). 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 (see, Matter of Zinn v. Tully, 54 NY2d 713, 442 NYS2d 990).
The Court of Appeals articulated the importance of establishing intent, when, in Matter of Newcomb, 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" (Matter of Newcomb, 192 NY 238, 251).
The Administrative Law Judge, weighing all the facts in this case and evaluating the testimony of petitioner, determined that petitioner changed his domicile from New York to Florida. The Administrative Law Judge also determined that petitioner did not spend more than 183 days in New York during the years at issue. The basis of the Administrative Law Judge's determination was his finding that petitioner's testimony was [*16] credible, coupled with the weight of the documentary evidence.
On exception, the Division asserts that 1) the burden of proving a change of domicile is on petitioner; 2) the standard of proof is one of clear and convincing evidence of an intent to change domicile; 3) the Administrative Law Judge erred in the weight he accorded the evidence produced by petitioner; 4) petitioner did not sustain his burden of proof because notwithstanding his testimony that it was his intent to change his domicile, his conduct confirmed that he lacked an absolute and fixed intention to abandon his New York domicile and acquire a Florida domicile.
In particular, the Division argues: 1) that the Administrative Law Judge erred by treating petitioner's testimony as conclusive; 2) that formal acts of domicile, e.g., filing a declaration of domicile, registering to vote and obtaining a driver's license, are self-serving and, thus, less persuasive than the informal acts of an individual's general habit of life and 3) that petitioner's general habit of life, especially his failure to terminate certain business interests in New York and his failure to give up a rent controlled apartment in New York City, was [*17] so contrary to his declarations of intent as to preclude a finding by the Administrative Law Judge that petitioner, by clear and convincing evidence, proved that he changed his domicile.
The Division relies on the regulations of the Commissioner which provide, in part, that "[i]n determining an individual's intention . . . his declarations will be given due weight, but they will not be conclusive if they are contradicted by his conduct" (20 NYCRR 102.2[d][2]). In the alternative, the Division asks that if we affirm that petitioner was not domiciled in New York, we find that petitioner failed to keep records sufficient to show that he was not present in New York for greater than 183 days for each of the tax years at issue.
On exception, petitioner asserts that the determination of the Administrative Law Judge is correct and that petitioner sustained his burden of proving that he changed his domicile from New York to Florida. Petitioner points out that the determination of the Administrative Law Judge relied on the credible testimony of petitioner coupled with the weight of the documentary evidence presented at the hearing.
We affirm the determination of the Administrative Law [*18] Judge.
We deal first with the Division's assertion that the Administrative Law Judge improperly weighted the evidence. We do not agree. The question of change of domicile is one of fact, not of law, and "frequently depends on a variety of circumstances which differ as widely as the peculiarities of individuals" (Matter of Newcomb, supra, at 250). A change may be made for any reason whatever, provided there is an absolute and fixed intention to abandon one and acquire another and the acts of the person confirm the intention (Matter of Newcomb, supra, at 251). With respect to the evidence necessary to establish the intention:
"it is impossible to lay down any positive rule. Courts of justice must necessarily draw their conclusions from all the circumstances of each case, and each case must vary in its circumstances; and moreover, in one a fact may be of the greatest importance, but in another the same fact may be so qualified as to be of little weight.
"The intention may be gathered both from acts and declarations" (Dupuy v. Wurtz, 53 NY 556, 562). Generally, formal declarations have been considered less persuasive than informal acts which demonstrate an [*19] individual's "general habit of life" (see, Matter of Silverman, supra, citing Matter of Trowbridge, 266 NY 283). In this case, the Administrative Law Judge reached his conclusion that petitioner established his intent to change his domicile and actually did change his domicile on what the Administrative Law Judge determined to be the credible testimony of petitioner coupled with the weight of the documentary evidence.
The determination by the Administrative Law Judge was made after the opportunity to observe petitioner testify under oath on direct and cross examination as to his intention to change his domicile to Florida and the general conduct of his life during the period at issue. We find nothing in the record before us to support the Division's assertion that the Administrative Law Judge treated this testimony as conclusive. We find only that the Administrative Law Judge considered it to be competent and truthful, and weighed it appropriately in resolving the question of petitioner's domicile.
The Division argues that petitioner's formal acts (the filing of a declaration of domicile, registering to vote and obtaining a driver's license) were self-serving and should [*20] have been accorded little or no weight by the Administrative Law Judge.
We do not agree that these actions by petitioner could not be found by the Administrative Law Judge to be credible evidence of intent. The Division's argument that these kinds of actions should be discounted as self-serving is an argument, in essence, that they are not, and can never be, credible. Carried to its logical end, this argument would have us create a rule of general application to disregard such actions in determining domicile. We cannot agree with this position. Each case must be taken in accord with the facts and circumstances in it. The significance of these formal acts in each case will depend upon the other relevant factors in the case and depending upon those factors may take on greater or lesser importance. Here, the Administrative Law Judge formed his conclusions based on all the facts of the case.
With regard to the two specific acts singled out by the Division as indicating a lack of intent by petitioner to establish a Florida domicile, the Administrative Law Judge determined that petitioner's business interests were merely passive and that the maintenance of the rent controlled apartment [*21] was to provide comparatively inexpensive accommodations on petitioner's visits to New York.
The Administrative Law Judge concluded that these two actions of petitioner, taken with all the facts in the case, did not indicate a lack of intent to establish a Florida domicile. Put another way, the Administrative Law Judge concluded that they did not contradict petitioner's testimony and other acts as to his intent to change his domicile from New York to Florida. We find no reason in the record before us to decide otherwise.
Similarly, we find no reason in the record to alter the Administrative Law Judge's conclusions that petitioner's New York bank accounts were trust accounts for the benefit of his son; or that petitioner sought to establish a "new" business in Florida, the P. J. Clark's restaurants.
We turn next to the Division's reliance on four recent decisions of this Tribunal, Matter of Zapka (Tax Appeals Tribunal, June 22, 1989), Matter of Sivlerman (supra), Matter of Roth (supra,) and Matter of Feldman (supra,) for support of its contention that it properly treated petitioner as a resident individual of New York during 1981 and 1982. Petitioner asserts that these [*22] cases are distinguishable from the matter at hand. We agree.
In Matter of Zapka (supra,) the taxpayers rented a furnished apartment in Florida on a one-year renewable lease. They neither purchased nor furnished their Florida residence. There was also no evidence of any club memberships nor of any religious affiliations either in New York or Florida other than the Zapkas' membership, during the years at issue, in a Long Island country club. In Matter of Roth (supra,) the taxpayer was separated from his wife who resided with their three children in Manhattan.
During the tax years at issue the taxpayer-husband leased an apartment in Manhattan at West 66th Street; had a second apartment renovated at 930 Park Avenue and purchased and lived in a home in Torrington, Connecticut which he considered a more suitable place to spend time with his children, who were all of school age (18, 17 and 5 years). The taxpayer travelled from Connecticut to Manhattan for business. He made 930 Park Avenue his permanent residence after completion of the renovations. Clearly, the petitioner, who acquired a temporary residence in Connecticut for a temporary purpose, with intent to return to [*23] a renovated residence in Manhattan, did not change domicile.
In Matter of Feldman (supra,) the taxpayer was an osteopathic physician, who retained a residence in New York after moving to Florida, but in addition, and most significantly, continued to practice medicine at his old office in Brooklyn and lived in the Brooklyn residence for several days each week during the period from May to October when he was not in Florida.
In Matter of Silverman (supra,) Mr. Silverman was semi-retired and continued to render services to what had been his family-run New York business. Mr. Silverman continued to be active as a member of the Board of Directors of the Long Island Jewish Hospital, and was active in United Jewish Appeal Federation in New York and in the alumni group of Boys' High School in Brooklyn. The Silvermans spent considerable time in New York for the years at issue, 175, 176, 213, 144 and 155 days for the years 1978 through 1982, respectively during which they resided at their Woodmere, New York home. Moreover, the Silvermans, unlike petitioner here, did not testify at their hearing. (They were deceased by the date of the administrative hearing.)
We deal finally with [*24] the Division's alternative argument, i.e., that petitioner failed to keep sufficient records to show that he was not present in New York for greater than 183 days for each of the tax years at issue.
We affirm the determination of the Administrative Law Judge. The testimony of petitioner was that he was in New York "certainly less than 100 days per year" and more likely visited New York no more than 60 to 75 days per year. Telephone bills in petitioner's name reveal that outgoing calls were placed from petitioner's Florida condominium on 164 different days over a period of 11 months in 1981, and on 187 different days over a period of 10 1/2 months in 1982. The bills corroborate petitioner's testimony as to his time spent in Florida and together with this testimony form a sufficient basis to conclude that petitioner was not present in New York for greater than 183 days for each of the tax years at issue.
Accordingly, it is ORDERED, ADJUDGED and DECREED that:
1. The exception of the Division of Taxation is denied;
2. The determination of the Administrative Law Judge is affirmed;
3. The petition of Elliott and Ghislaine Sutton is granted; and
4. The Notices of Deficiency [*25] dated April 12, 1985 and February 26, 1985 are cancelled.
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