NY case provides lessons on changing domicile

Editor: Rochelle Hodes, J.D., LL.M.

Last year’s New York state decision In the Matter of Hoff, No. 850209 (N.Y. Tax Appeals Tribunal, 10/9/25), is a reminder that taxpayers need to build a record when changing domicile to support their claim of residency in a new jurisdiction. While the case was decided under the tax laws of New York state, it shows the importance generally of documentation, planning, and taking affirmative actions when claiming a change of domicile for tax purposes.

In the case, John Hoff and spouse Kathleen Ocorr–Hoff, longtime New York residents, claimed that they changed their domicile to Florida as of Oct. 30, 2018. On their 2018 New York nonresident and part–year resident income tax return, they reported a condominium address in Naples, Fla., and indicated that they were part–year New York residents. Beginning with the 2019 tax year, they reported themselves as full–year New York nonresidents.

During an audit by the Department of Taxation and Finance of their 2018 and 2019 New York personal income tax returns, the Hoffs maintained that their actions demonstrated their intent to change their domicile to Florida as of Oct. 30, 2018, under New York tax law. However, the Department was not convinced and issued them a notice of deficiency and assessment based on their having remained domiciled in New York state during 2018 and 2019. In July 2022, the Hoffs filed a petition with the Division of Tax Appeals contesting the notice. Ultimately, while the New York State Tax Appeals Tribunal was persuaded that the Hoffs manifested an intent to change domicile gradually over time, it was not persuaded that they intended to change domicile as of Oct. 30, 2018.

New York law on residency and domicile

N.Y. Tax Law Section 605 describes the statutory rules for determining residency. It provides that residents include individuals domiciled in New York state or who maintain a permanent place of abode in the state and spend in the aggregate more than 183 days of the tax year in the state.

In New York, domicile is intent–based and refers to the location the taxpayer intends to make their permanent home. To determine if a change in domicile occurs, New York applies a “clear and convincing evidence” standard, which is more difficult to establish than the more common civil standard of “preponderance of the evidence.” Under the clear–and–convincing–evidence standard, a claimed change must be highly probable, not merely plausible.

The Tax Appeals Tribunal’s decision

This decision highlights, among other things, the difficulty in aligning evidence showing a taxpayer’s intent to change domicile with the desired timing for such a change. Achieving the desired date for a change in domicile requires business records, lifestyle changes, and documentation supporting the change.

While the tribunal’s decision is fact–intensive, a few findings appear to have carried substantial weight:

Time and pattern favored New York during the audit years: The audit division’s day count (which the taxpayer conceded was “relatively close”) showed the couple spent more days in New York than in Florida in both years at issue (2018: 186 days in New York versus 131 days in Florida; 2019: 164 days in New York versus 153.5 days in Florida) and a recurring seasonal pattern of spending winters in Florida and summers in New York.

The claimed move date out of New York did not align with the couple’s pattern of activity in 2018: Although the taxpayers reported moving out of New York on Oct. 29, 2018, the day count for Oct. 30 through Dec. 31, 2018, reflected 34 days in New York versus 18 days in Florida (plus other travel).

The New York home remained fully suitable as a true home base: The tribunal emphasized that nothing about the New York residence changed to make it less suitable as a permanent home during the years at issue, and it described the New York property as a substantial residence rather than a vacation cottage.

Business ties remained meaningful in New York during the audit years: The taxpayers testified that their intent was to have New York as their main property until Hoff could “step away from work.” The record shows that Hoff remained actively involved in, and compensated by, his New York business after the claimed move date, and his expected transition away from the business did not occur during the audit years. For Ocorr–Hoff, the tribunal found no proof of a claimed Florida business, while the record reflected continued New York business activity.

Social and lifestyle ties still pointed to New York: The taxpayers joined a Florida country club, but they maintained full memberships in two New York country clubs during the audit period. A status change at one club appeared to occur after 2020, which the tribunal treated as outside the relevant period. The taxpayers also spent three of four significant holidays across 2018—2019 (Thanksgivings and Christmases) in their New York home.

Several facts supporting domicile in Florida either occurred after 2018, were unsubstantiated, or were contradicted by other records: For example, a Florida hunting/fishing license provided by the couple wasn’t issued until September 2020. Vehicle records showed Florida registration for only one of the four vehicles they owned during the audit period, Florida automobile insurance cards effective in 2020—2021 for two of the vehicles, and a New York insurance card effective as late as February 2022 for the other vehicle. The couple said they had Florida bank accounts and safe–deposit boxes but failed to provide proof that they had these during the audit period, and federal returns still reflected interest from a New York bank during the audit period.

A “second home” characterization undercut the Florida–home narrative: The Florida condominium purchase documents included a “second home rider,” which stated the condominium would be occupied and used only as a second home.

Movement of “near and dear” items did not cure the timing problem: The tribunal noted evidence about shipping Waterford crystal to Florida in 2014 (four years before the audit period) and found the record did not explain why moving ski equipment to Florida mattered for the years at issue.

Five takeaways

1. Business reality should match the claimed timing of the change in domicile: Statessuch as New York that evaluate domicile based on taxpayer intent or habit of life may scrutinize connections to in–state businesses. Continued compensation, continuing operational responsibilities, and continuing travel on behalf of an in–state business can overwhelm formal indicia of residency in another state. If the transition depends on business events that may not occur on schedule, the taxpayer should plan for that uncertainty and document what changed (authority, responsibilities, travel, and where work is performed). Business owners moving to another state in connection with an exit from their business should ensure that the timing of that exit aligns with their claimed change in residency. Facts of each case should demonstrate relinquishment of the old domicile.

2. Align the move year with a visible change in time, pattern, and routine: If the taxpayer claims a change as of a specific date, day counts, holiday patterns, and day–to–day living should change in that same period. A seasonal pattern that resembles prior years can be interpreted as continued attachment to the former home, even when many formalities of moving to the new state have been completed. Consider states such as California and Illinois, whose definition of “resident” includes individuals domiciled in the state but absent for temporary or transitory purposes (Cal. Rev. & Tax. Code §17014; 35 Ill. Comp. Stat. 5/1501(a)(20)). Taxpayers leaving a state should be ready to provide evidence supporting the idea that their move is permanent and that any return visits to their former state are for temporary or transitory purposes.

3. Assume the case will be judged years later based on documents the taxpayer may not have kept: Hoff is a reminder that while subjective intent at the time of the move may be genuine, that intent adjudicated years later often turns on later–created (or missing) evidence. A practical approach is to build and maintain a contemporaneous “domicile file” for the move year: a defensible day–count methodology, travel substantiation, documentation showing where financial life is centered, and a plan for how any continuing ties to the former state will be limited and explained in a coherent way. Evidence should also support a change in taxpayer intent and habit of life. Factors such as community and social ties, healthcare providers, and location of family or “near and dear” items could become evidence supporting a change in intent.

4. Assume the residency record can be public and detailed: Residency determinations are fact–intensive and often turn on granular details of day–to–day life (travel patterns, holiday location, club memberships, household logistics, and similar “lifestyle” facts). Published administrative determinations may describe those facts in detail to explain how the decision–maker weighed the evidence. Taxpayers should plan on the assumption that information provided during an audit or contested matter may later be summarized in a publicly available decision. Submissions should therefore be accurate, organized, and limited to what is relevant and requested, particularly where privacy or reputational considerations are material. Taxpayers under review should be aware that if basic facts do not support their claim, they may need to disclose significant personal information to substantiate it and that any aspect of that personal information may be made public.

5. State standards vary, but the practical proof burden is consistently fact–driven and document–heavy: New York’s evidentiary standard of “clear and convincing” in asserting a change in domicile is not universal. Nevertheless, even states that have moderate state income tax rates use presumptions and record–based domicile tests that can be similarly demanding in practice. For example, California regulations presume an existing domicile continues until changed and requires both actual residence in the new state plus the intent to remain there permanently or indefinitely (Cal. Code Regs. tit. 2, §1138.25(a)).

Taxpayer’s burden

Hoff is a reminder that the burden of proving a change in domicile rests on the taxpayer, and the evidentiary standard varies by state and generally is inherently fact–intensive. For taxpayers planning a move to another jurisdiction, the stronger domicile position is one where business activity, lifestyle patterns, and contemporaneous documentation all align with the timing of the move.

Editor

Rochelle Hodes, J.D., LL.M., is principal with Washington National Tax, Crowe LLP, in Washington, DC.

For additional information about these items, contact Hodes at Rochelle.Hodes@crowe.com.

Unless otherwise noted, contributors are members of or associated with Crowe LLP.