LEGAL Q&A 36 MARCH 2026 www.goodnewsfl.org Good News • South Florida Edition As the New York Post puts it, “There’s seemingly no escape from New York – the New York tax man, that is.” The tabloid maintains that the state is being “extremely aggressive” in pursuing revenue from people claiming residency in Florida, which of course has no income tax – a phenomenon observed by the Tax Planning team at Tripp Scott. And no wonder. New York’s and the Big Apple’s combined income tax rates reach up to 15%. And more than 125,000 residents left the city for the Sunshine State from 2018 to 2022 alone – bringing nearly $14 billion worth of income with them. Bill Davell - How can New York try to tax people who have moved? Isn’t it simply a matter of declaring oneself a citizen of Florida, and spending sufficient time here? Zachary King - While a taxpayer or couple can maintain multiple “residences,” both New York state and the Big Apple tax “residents” based either on: • “statutory residence” requiring a permanent place of abode in the state or city for substantially all of the taxable year and spending 184 days or more there – with any part of a day (even a few minutes) counting as a full day or • “domicile” – defined as “the place which an individual intends to be such individual’s permanent home.” While “statutory residence” can be avoided through proper travel planning, most recent cases have turned upon the question of domicile, or to shorthand it: whether a taxpayer has really moved. The State of New York Tax Appeals Tribunal in a recent case indicated that “(e)stablishing a new domicile is only effected when a taxpayer establishes that they (sic) have abandoned their former domicile” and that determining “a taxpayer’s subjective intent to maintain or change domicile” requires “an examination of objective factors” including “home, time, business ties, social ties, family ties and other evidence.” The couple in that high-profile case, which was featured in the Post article, had bought a $935,000 condo in Naples in 2014 and invested substantially in it. In 2018, the first of two tax years examined, they filed formal “statements of domicile” in Florida and changed their voting registration and drivers’ licenses. They joined a country club and were active in their condo governing board. Yet the Tribunal found that for the two tax years in question, the couple “continued to spend time in both residences, significantly, with more time” – including most holidays – “in the New York residence,” which the decision noted was “a substantial property which petitioners used as their ‘main home’ for several years prior to the period in issue.” Moreover, the husband “continued to collect a significant salary” from and played an important role in his 100%-owned New York-based company, and the couple “continued full memberships in not one, but two country clubs in New York” and didn’t get around to re-registering their cars and changing their insurance to Florida until after the tax years in question. BD - OK, so making a declaration and changing registrations is not enough? ZK - And as the New York Times notes, “’Not enough’ is trouble when a letter arrives from the state’s Department of Taxation and Finance.” Such a letter is “almost guaranteed for any former New Yorker who made more than $1 million in a year in which they claim to have moved,” and that “(a)t $10 million, the odds are 100%.” Moreover, “with about 600 auditors, the department is particularly aggressive and thorough,” demanding “reams of information — cellphone records, credit card receipts, E-Z Pass logs, diary entries — that could support or disprove a change-ofresidency claim.” Those “auditors will have a list of probing questions, each a bit more invasive than the last. Where did you spend your holidays? Where did you stay after returning from an overseas trip? Where are your dog’s ashes? Where is your burial plot?” The Times warned that “one misstep can cause an audit defense to fall apart,” citing a wealthy man who had moved to Florida but returned to New York to go fly fishing and to get a $25 discount, applied as a New York resident. Concludes the paper, “You really have to move — and a lot more.” BD - Is that the only way New York tries to keep taxing refugees to Florida? ZK - A second trap can snare remote workers who derive a portion or all of their income from New York sources. Say that during COVID, you decided that you could do remote work with a beachside view here in Fort Lauderdale and were able to maintain that arrangement after the pandemic. Under the Empire State’s “convenience rule,” you owe taxes on that income if your choice of location was for your convenience, and your employer has not, in the words of the Tribunal, “established a nexus in another jurisdiction by directing its employee (you) to perform personal services in that out-of-state location for its own necessity,” BD - So how does one make an “Escape from New York” and its take-no-prisoners taxing authorities? ZK - Because of the level of tax savings involved – often tens of thousands of dollars or more – this is a situation where consulting an attorney can truly produce an instantly measurable return on investment. The lawyers of the Tripp Scott Tax Planning Practice know the right questions to ask, “I’s” to dot and “T’s” to cross to sail you safely past the gimlet eyes of New York tax auditors. Get in touch at 954525-7500 or www.trippscott.com/contact-us. If you have any topics you think may be of interest to our readers, we encourage you to email us at [email protected]. Taxing Matters: “Escape from New York” May Be Harder than You Think William “Bill” C. Davell Esq. The Good News provides a monthly column with important content having to do with topics from the legal community. This month Bill Davell, director, discusses taxes with Zachary King, an associate with Tripp Scott.
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