If a taxpayer claims to have changed their domicile from New York to Florida, will the Department confirm that change in an Advisory Opinion, and who has to prove it happened?

Plain-English summary

Norman and Anglina Cooper were longtime New York domiciliaries. Mr. Cooper had planned to retire in 1992, but his employer asked him to stay on for about two more years to help establish an overseas network, offering incentives to do so; he did not become an independent contractor/consultant until the end of 1994. In anticipation of the originally planned 1992 retirement, the Coopers sold their Long Island home, leased a New York City apartment (which they kept leasing through 1992-93, partly because their son used it while doing a fellowship near New York University Hospital), and bought a Florida home on May 6, 1991 for $430,000, later putting over $250,000 into improvements and furnishings. They took numerous steps aimed at establishing Florida as their domicile - changing their wills, getting Florida driver's licenses, the wife serving on Florida juries, filing Florida intangible tax returns, establishing Florida religious membership, using Florida doctors and dentists, and becoming heavily involved in Florida thoroughbred racing (joining the Thoroughbred Owner & Breeders Association and part-owning three race horses).

The Coopers asked the Department seven questions, including whether they had only a temporary place of abode in New York, whether they were New York statutory residents, whether their domicile had changed to Florida, what the initial audit year should be, who bears the burden of proof, whether audit guidelines had been followed, and whether an additional year could be added to the audit.

The Department declined to answer the domicile and statutory-residency questions (issues 1-3) because those are questions of fact that depend on a variety of individualized circumstances, and an Advisory Opinion can only apply the law to a specified set of facts - it cannot resolve disputed factual questions (Tax Law § 171(24); 20 NYCRR § 2376.1(a); Matter of Newcomb). It also declined to weigh in on the audit's scope, guideline compliance, or whether an additional year could be added (issues 4, 6, and 7), since reviewing an audit is outside an Advisory Opinion's scope. It did answer issue 5: under 20 NYCRR § 105.20(d) and Matter of Newcomb, the burden of proving a change of domicile rests on the party asserting it - here, the Coopers. The Department also noted that even if the Coopers' domicile had changed to Florida, they would still be considered New York statutory residents under Tax Law § 605(b)(1)(B) for any taxable year in which they maintained a permanent place of abode in New York and spent more than 183 days there in the aggregate.

What this means for you

Taxpayers claiming a change of domicile away from New York

Don't expect an Advisory Opinion to bless a disputed domicile change. Whether and when your domicile changed is a question of fact turning on the specific circumstances of your life - where you kept your "near and dear" items, your driver's license, your doctors, your religious and social ties, and similar indicators - and the Department will not decide that dispute in an Advisory Opinion. You should also expect that you, not the Department, carry the burden of proving the change occurred, so document your intent and conduct contemporaneously (wills, licenses, jury service, professional relationships, and similar ties) rather than trying to reconstruct the case later. And remember that changing your domicile doesn't automatically get you out of New York tax: if you still keep a permanent place of abode in New York and spend more than 183 days there in a year, you can be taxed as a statutory resident regardless of where you are domiciled.

Accountants/attorneys preparing a domicile-change position for an audit

This opinion is a useful illustration of the legal framework rather than a factual precedent, since the Department expressly refused to apply it to the Coopers' facts. Use it for the black-letter rules: domicile requires both an actual change of residence and a bona fide intent to make the new location a fixed and permanent home (20 NYCRR § 105.20(d)(2); Aetna National Bank v. Kramer; Matter of Minsky v. Tully; Matter of Newcomb); a place of abode is not "permanent" if it's maintained only during a temporary stay for a particular purpose (20 NYCRR § 105.20(e)(1)); and even a successful domicile change doesn't defeat statutory residency under Tax Law § 605(b)(1)(B) if the client keeps a New York permanent place of abode and hits the 183-day threshold. Also flag for clients that questions about audit scope, added audit years, and guideline compliance need to be raised through the audit or protest process, not through an Advisory Opinion request.

Common questions

Q: Did the Department decide whether the Coopers had actually changed their domicile to Florida?
A: No. The Department held that whether and when a change of domicile occurred is a question of fact depending on individualized circumstances, and questions of fact cannot be resolved in an Advisory Opinion, which only applies the law to a specified set of facts (Tax Law § 171(24); 20 NYCRR § 2376.1(a); Matter of Newcomb).

Q: Who has the burden of proving a change of domicile?
A: The party asserting the change - in this case, the Coopers. Under 20 NYCRR § 105.20(d) and Matter of Newcomb, an existing domicile continues until a new one is acquired, and the burden of proof rests on whoever alleges that a change occurred.

Q: If the Coopers' domicile really had changed to Florida, would that end their New York tax exposure?
A: Not necessarily. The Department noted that even with a Florida domicile, the Coopers would still be considered New York statutory residents under Tax Law § 605(b)(1)(B) for any taxable year in which they maintained a permanent place of abode in New York and spent more than 183 days there in the aggregate.

Q: What does it take for a New York apartment to not count as a "permanent place of abode"?
A: Under 20 NYCRR § 105.20(e)(1), a dwelling is not deemed a permanent place of abode if it is maintained only during a temporary stay (a fixed and limited period) for the accomplishment of a particular purpose - for example, a fixed-term out-of-state employee's temporary New York assignment apartment. The opinion did not decide whether the Coopers' leased New York City apartment met that standard.

Q: Did the Department review whether the Audit Division followed its own income tax audit guidelines, or decide what years could be examined?
A: No. Questions about the initial year to be examined, whether audit guidelines were followed, and whether an additional year could be added to the audit are all outside the scope of an Advisory Opinion, which addresses only the application of statutory and regulatory provisions to a specified set of facts (Tax Law § 171(24)).

Q: What does it take to legally establish a new domicile, according to the case law cited?
A: There must be both an actual change of residence and a bona fide intent to abandon the former domicile and make the new location a fixed and permanent home (Aetna National Bank v. Kramer; Matter of Minsky v. Tully). Residence without intent, or intent without residence, is not enough (Matter of Newcomb); declarations of intent are given weight but are not conclusive if contradicted by conduct (20 NYCRR § 105.20(d)(2)).

Citations and references

• Tax Law § 601(a)/(b)/(c) - imposes New York personal income tax on the taxable income of every New York resident
• Tax Law § 601(e) - imposes New York personal income tax on the New York-source income of every nonresident
• Tax Law § 605(b)(1) - defines a resident individual, including the domiciliary test and the statutory-resident (permanent place of abode plus 183 days) test
• Tax Law § 605(b)(2) - defines a nonresident individual
• Tax Law § 171(24) - an Advisory Opinion sets forth only the applicability of statutory and regulatory provisions to a specified set of facts
• 20 NYCRR § 105.20(d) - defines domicile; a domicile continues until a new one is acquired, and the burden of proof is on the party asserting a change
• 20 NYCRR § 105.20(e)(1) - defines permanent place of abode; a dwelling maintained only during a temporary stay for a particular purpose is not deemed permanent
• 20 NYCRR § 2376.1(a) - an Advisory Opinion addresses only a specified set of facts
• Aetna National Bank v. Kramer, 142 App Div 444 - a change of domicile requires an actual change of residence coupled with intent to abandon the former domicile and acquire another
• Matter of Minsky v. Tully, 78 AD2d 955 - both the requisite intent and actual residence at the new location must be present to change domicile
• Matter of Newcomb, 192 NY 238 - distinguishes residence from domicile; an existing domicile continues until a new one is acquired, and the burden of proof rests on the party alleging a change
• Matter of Richard E. Gray v. NYS Tax App Trib, 235 AD2d 641 - taxpayers who retained their New York residence until their primary business interest was sold did not abandon their New York domicile despite strong ties to another state

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1998.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a98_7i.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-98(7)I
Income Tax
August 7, 1998

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I971209A

On December 9, 1997, a Petition for Advisory Opinion was received from
Norman & Anglina Cooper, 3801 NE 207 th Street, Aventura, Florida 33180.
The issues raised by Petitioners are: (1) Do they have a temporary place
of abode in New York State? (2) Are they statutory residents of New York? (3)
Have they changed their domicile to Florida? (4) What is the initial year to be
examined? (5) Who has the burden of proof? (6) Have the Audit Division income tax
audit guidelines been followed? and (7) May an additional year be added to the
audit?
Petitioner submits the following facts as the basis for this Advisory
Opinion.
Petitioners were domiciliaries of New York. Mr. Cooper planned to retire
in 1992 at age 62, and states that in 1991 he entered into an oral agreement to
that effect with the company which employed him. Mr. Cooper states that the
agreement included, among other things, an agreement that after his retirement
Mr. Cooper would be a consultant at a portion of his prior salary.
However, the company, realizing it needed Mr Cooper's services for an
additional limited period, requested that he postpone his planned retirement date
for a period of two years so that he could help establish an overseas network.
The company provided several incentives for Mr. Cooper to stay on, such as an
increase in salary and the opportunity to make whole his incentive stock awards
when he retired, which was contemplated to be at the end of 1994. Mr. Cooper
agreed, and, in 1992 he appointed Michael Boyer as President of the company so
he could spend more time out of the office and Mr. Boyer could be groomed to take
his place completely in several years. Mr. Cooper did not change his employment
status in 1992. Mr. Cooper states that he discontinued working as an employee
for the company at the end of 1994, when an independent contractor relationship
ensued with the consulting agreement.
In anticipation of his initially planned retirement at the end of 1992,
Petitioners decided to move and become Florida residents. Petitioners sold their
home in Long Island and leased an apartment in New York. Petitioners purchased
a residence in Florida on May 6, 1991, for $430,000 and expended over $250,000
in improvements and furnishings, and intended to make it their domicile.
During 1992 and 1993, they needed a place to stay in New York during the
days they were in New York for business and other purposes, so they continued to
lease the New York apartment on a yearly basis. During 1992 and 1993, their son
had a fellowship at New York University Hospital, now completed, and used the
apartment, which was convenient to the hospital. Their other children had long
since left New York State.

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Petitioners assert that, during this time, they took many steps to
establish themselves as domiciliaries in Florida, while at the same time,
eliminating most attachments to New York. They moved all their "near and dear"
items to Florida.
They changed their wills, they obtained Florida drivers'
licenses, the wife served on Florida juries, they filed Florida intangible tax
returns, they ultimately established religious membership in Florida, they used
Florida doctors and dentists. They became involved in their Florida condo, and
they frequented local restaurants.
They became involved with the year-round race tracks, and joined the
Thoroughbred Owner & Breeders Association, becoming part owner in three race
horses.
At times, they attended the track up to three days a week.
They
attended training sessions at Gulfstream Park.
It is Mr. Cooper's contention that, despite their extensive, continuous
residency in New York, the facts of their life were drastically changed as they
pointedly altered their lifestyle starting May 6, 1991, the day they purchased
their new residence in Florida, intending to make it their domicile. Petitioners
contend that where employment is clearly and unequivocally established for a
limited period of time and the taxpayers clearly intend to give up their New York
residency and pursue their new lifestyle, utilizing their new residence in
Florida, their New York tenancy satisfied the requirements of "a temporary
residence". Accordingly, Petitioners contend that their New York residence was
converted from a permanent to a temporary residence.
Section 601(a),(b) and (c) of the Tax Law imposes, for each taxable year,
the New York State personal income tax on the New York taxable income of every
resident of New York State. Section 601(e) of the Tax Law imposes, for each
taxable year, the New York State personal income tax on the taxable income which
is derived from sources in New York State of every nonresident which is equal to
the tax base multiplied by the New York source fraction.
Section 605(b)(1) of the Tax Law defines a resident individual as an
individual:
(A) who is domiciled in this state, unless (i) 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
(B) 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.
Section 605(b)(2) of the Tax Law provides that a "nonresident individual"
means an individual who is not a resident or a part-year resident.

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TSB-A-98(7)I
Income Tax
August 7, 1998

Section 105.20(d) of the Personal Income Tax Regulations ("Regulations")
defines domicile, in pertinent part, as follows:
(1) Domicile, in general, is 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.
(2) A domicile once established continues until the individual
in question moves to a new location with the bona fide intention of
making such individual's 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 such
individual's 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, such
individual's declarations will be given due weight, but they will
not be conclusive if they are contradicted by such individual's
conduct...
(4) A person can have only one domicile. If a person has two
or more homes, such person's domicile is the one which such person
regards and uses as such person's permanent home. In determining
such person's intentions in this matter, the length of time
customarily spent at each location is important but not necessarily
conclusive. It should be noted however, as provided by paragraph
(2) of subdivision (a) of this section, a person who maintains a
permanent place of abode for substantially all of the taxable year
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 such person
may be domiciled elsewhere.
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 444,445). 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). The concept of intent was addressed by
the Court of Appeals in Matter of Newcomb (192 NY 238, 250-251):
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

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Income Tax
August 7, 1998

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....
In the Matter of Richard E. Gray v NYS Tax App Trib, 235 AD2d 641 (1997),
the Court held that evidence that the taxpayers retained their New York State
residence until their primary business interest was sold provided substantial
evidence for the administrative conclusion that the taxpayers did not abandon
their New York State domicile, and remained subject to New York personal income
tax, until the time of sale of the business interest, despite their strong ties
to another state. (see, Matter of Kartiganer v Koenig, 194 Ad2d 879; Matter of
Clute v Chu, 106 AD2d 841; Matter of Zinn v Tully, 77 AD2d 725, [dissenting mem],
revd on dissenting mem below 54 NY2d 713.)
The determination of whether a change of domicile has occurred, is a
question of fact which depends on a variety of individualized circumstances
Questions of fact are not susceptible of
(Matter of Newcomb, supra).
determination in an Advisory Opinion. An Advisory Opinion merely sets forth the
applicability of pertinent statutory and regulatory provisions to "a specific set
of facts". Tax Law, §171.Twenty-fourth; 20 NYCRR 2376.1(a).
Section 105.20(e)(1) of the Regulations defines a "permanent place of
abode" as a dwelling place permanently maintained by the taxpayer, whether or not
owned by the taxpayer. However, a place of abode, whether in New York State or
elsewhere, is not deemed permanent if it is maintained only during a temporary
stay for the accomplishment of a particular purpose. For example, an individual
domiciled in another state may be assigned to the individual's employer's New
York State office for a fixed and limited period, after which the individual is
to return to the individual's permanent location. If the individual takes an
apartment in New York State during this period, the individual is not deemed a
resident, even though the individual spends more than 183 days of the taxable
year in New York State, because the individual's place of abode is not permanent.
Such individual will, of course, be taxable as a nonresident on the individual's
income from New York State sources. However, if the individual's assignment to
the individual's employer's New York State office is not for a fixed or limited
period, the individual's New York State apartment will be deemed a permanent
place of abode and the individual will be a resident if the individual spends
more than 183 days of the year in New York State. For a place of abode to be
deemed not permanent, the stay in New York must be temporary (i.e., for a fixed
and limited period) and the stay must be for the accomplishment of a particular
purpose.

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TSB-A-98(7)I
Income Tax
August 7, 1998

In this case, Petitioners were domiciliaries and residents of New York
State when they owned their home on Long Island.
That home on Long Island
constituted a permanent place of abode in New York State. Petitioners state that
in anticipation of retirement, they sold their home on Long Island and leased an
apartment in New York City (although not stated in the facts, it is presumed this
happened prior to May 1991).
With respect to issues "1" and "2", it cannot be determined whether
Petitioners are statutory residents of New York pursuant to section 605(b)(1)(B)
of the Tax Law, or whether they have a temporary place of abode in New York
pursuant to section 105.20(e)(1) of the Regulations, until Petitioners' domicile
is determined.
However, if Petitioners' domicile changed to Florida, then
pursuant to section 605(b)(1)(B) of the Tax Law, they would be considered
statutory residents of New York State for taxable years that they maintain a
permanent place of abode in New York State and spend in the aggregate more than
183 days of the year in New York.
With respect to issue "3", as previously stated, the determination of when
and/or whether Petitioners changed their domicile from New York to Florida is a
factual matter that cannot be made within the context of this Advisory Opinion.
With respect to issues "4" and "7", the determination of what taxable years
should be reviewed by the Audit Division within the context of an examination of
Petitioners' personal income tax returns is not within the scope of an advisory
opinion.
With respect to issue "5", pursuant to section 601 of the Tax Law, the
personal income tax is imposed on residents and nonresidents of New York State.
To determine whether an individual is a resident or nonresident pursuant to
section 605(b) of the Tax Law, it is necessary to first determine whether such
individual is domiciled in New York State for the taxable year. Pursuant to
section 105.20(d) of the Regulations and Newcomb, supra, the burden of proof is
on the person asserting a change of domicile. In this case, the burden of proof
is on Petitioners to prove that a change of domicile occurred in a particular
taxable year.
With respect to issue "6", Petitioners state that "it is requested that you
review the actions by audit in conforming with the guidelines." An advisory
opinion sets forth the applicability of pertinent statutory and regulatory
provisions to "a specified set of facts". (Tax Law §171, subd twenty-fourth.)
It is not within the scope of an advisory opinion to review an audit.

DATED: August 7, 1998

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau

The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.