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After the Move – Part III: Returning to New York

K. Craig Reilly, Esq.
Published Date:
Oct 1, 2023


Welcome back to the third and final installment of the “After the Move” series. Part One focused on employment compensation, including New York’s nonresident income sourcing rules for telecommuting and the proper sourcing methodologies for various types of deferred compensation. Part Two outlined several potential pitfalls that can lead to unexpected New York source income when changing residency in connection with one-off transactions, such as the complete or partial sale of a business. Both of these articles therefore focused on properly determining what qualifies as New York source income; as we outlined in those pieces, correctly making that determination is vital for ensuring that “the juice is worth the squeeze” when leaving New York State.

Part Three examines a slightly different question: What happens when a taxpayer who has left New York decides they want to return—either temporarily or permanently—to their former home and domicile? As we mentioned in our earlier articles, there are many valid reasons individuals decide to either remain in or leave a particular location. But what happens when those motivations shift, and a taxpayer needs or wants to reconnect in some way with their former domicile? When it comes to New York State personal income tax residency, there are two lingering residency tests that taxpayers must still consider: (1) statutory residency (or “the 183-day test”) and (2) domicile, with a focus on the post-move burden of proof. Part Three of the After the Move series covers both of these tests as applied to those who have recently left the state.

Statutory Residency Considerations for Taxpayers Leaving New York

A statutory resident, as defined in section 605 of the Tax Law, is an individual who is not domiciled in New York State (or City) but who maintains a permanent place of abode in the state or city and spends in the aggregate more than 183 days of the taxable year in the state or city. The Tax Department’s Nonresident Audit Guidelines add helpful context and examples to this general definition.

I could write an entire three-part series on the nuances of New York’s 183-day test, but there are a few key issues that those who have recently left New York State must keep in mind in order to ensure they do not continue to qualify as a New York tax resident even after successfully changing their domicile. First, as New York’s statutory definition makes clear, in order to qualify as a statutory resident, a taxpayer must “maintain a permanent place of abode.” So the question for ex-New Yorkers often becomes: if I still own or maintain a residence in New York, do I have to worry about the statutory residency test? The safest answer is, yes—and that answer likely applies to most taxpayers. But there have also been several noteworthy administrative and court decisions in the past few years that have impacted the meaning of the phrase “maintain a permanent place of abode.” 

Under the framework first developed in 2014, in Matter of Gaied, a decision by New York State’s highest court, the Court of Appeals expressly held that “in order for a taxpayer to have maintained a permanent place of abode in New York, the taxpayer must, himself, have a residential interest in the property.” The “residential interest” test is therefore an important (and evolving) consideration for former New Yorkers looking to continue to own property in New York State. For example, under this test, it may be possible for a former New Yorker to own a New York City apartment that is used primarily by a family member (e.g., adult children) without running afoul of New York’s statutory residency test due to the fact the owner does not have a “residential interest” in the property. But the answer becomes less clear if, for example, there is joint use of the apartment between the property’s owner and the primary occupant. In those instances, the safest option is to spend fewer than 183 full or part days in New York. In any event, the “residential interest” test remains a helpful consideration for ex-New Yorkers who continue to own property in the state.

Similarly, the type of property owned by a former New Yorker may also be relevant for determining whether that individual needs to consider New York’s 183-day test. Take, for example, a taxpayer who successfully moves and changes his domicile from New York City to Greenwich, Connecticut. In connection with the move, the taxpayer sells his New York City apartment but continues to own a remote cabin in the Adirondack Mountains in northern New York. Last year, in June 2022, a New York State appellate court considered a similar fact pattern in Matter of Obus.

In Obus, New York’s Appellate Division struck down the Tax Department’s attempt to hold a New Jersey couple as income tax residents of New York by virtue of a seldom-used vacation home they owned in upstate New York. In doing so, the court expressly rejected the rigid, formulaic approach to New York’s statutory residency test favored by the Tax Department, and mandated a more subjective review of when a home can be considered a “permanent place of abode” for residency purposes.

While Gaied established that a dwelling does not constitute a permanent place of abode if the taxpayer lacks a “residential interest” in the property, Obus went one step further, applying that rationale directly to the vacation-home scenario. The Obus court found that the taxpayers, who spent more than 183 full or part days in New York as commuters from New Jersey but who used their vacation home (which was located several hours from the husband’s New York City office) no more than three weeks per year were simply “not among the target class of taxpayers who were intended to qualify as statutory residents.”

Obus stopped short of announcing any bright line test or rule for when a vacation home or other dwelling will constitute a permanent place of abode. Instead, the court held that to determine whether a taxpayer meets the “residential interest” requirement with respect to a dwelling, “it is imperative to consider a variety of factors, including the nature and duration of use,” an inquiry that “inherently involves a subjective analysis of the taxpayer’s use.” Obus is therefore perhaps most significant for rejecting the Tax Department’s long-held view that as long as a taxpayer has unfettered access to an objectively suitable year-round dwelling, the property automatically qualifies as a permanent place of abode for residency purposes, regardless of how it was used. Following Obus, that is no longer the test. Instead, former New Yorkers with remote or seldom used properties in the state may benefit from the more subjective, facts-and-circumstances standard surrounding what qualifies as a permanent place of abode.

The second component of New York’s statutory residency test is that the taxpayer must spend more than 183 full or part days in the state or city in order to qualify as a statutory resident of that jurisdiction. This test has remained largely unchanged over the past several decades. With very limited exceptions (e.g., in-patient medical days or pure travel through days), any part of a day spent in New York, for whatever reason (business or pleasure), counts as one day toward the 183-day rule, even if the taxpayer comes into New York and leaves on the same day or arrives late one evening and/or departs early one morning. There is unfortunately not a lot of flexibility on these day count rules, and the recordkeeping requirements under this test can be onerous.

One big reason for why day count recordkeeping can be so demanding revolves around the burden of proof. Much of the remainder of this article focuses on burden-of-proof issues surrounding domicile. But before moving onto that topic, it’s worth noting that regardless of who bears the burden of proof regarding a change of domicile, any taxpayer who maintains a permanent place of abode in New York will continue to bear the burden of proving that she has spent less than 184 days in New York State or City in any given year. The standard of proof for statutory residency audits is the same as what is applied to matters of domicile, that is, the evidence must be clear and convincing.

For better or for worse, in the age of smartphones and mobile apps, the clear and convincing standard for proving one’s day count now rests largely on call location records or other contemporaneous digital location tracking applications. However one proves the number of days spent in and outside New York, it is important for ex-New Yorkers to remember that the burden of proof falls on the taxpayer when it comes to proving his daily location in any statutory residency audit.  

Domicile and the Post-move Burden of Proof

If I could write an entire three-part series on the nuances of New York’s 183-day test, I could probably fill an encyclopedia with the different applications of New York’s domicile test. At its core, however, the term “domicile” is defined in New York State’s income tax regulations as the place an individual intends to be her permanent home, the place she intends to return to whenever absent. Although this definition is focused primarily on subjective intent, the Tax Department has settled on five somewhat objective, primary domicile factors that are to be used in order to ascertain an individual’s intentions with regard to domicile: home; active business involvement; time; items near and dear; and family connections. The nuances of these factors are beyond the scope of this series, but for anyone leaving New York, it is important to become very familiar with the actions that are expected to be taken within each of these factors before beginning what can be a difficult exit from the state.

If, however, a taxpayer does her homework and successfully changes her domicile away from New York, the successful move has a lasting impact on the taxpayer’s future domicile. This is because once established, a domicile continues until the person in question abandons the old location and moves to a new location with the bona fide intention of making their fixed and permanent home at the new location. We often refer to this as the “leave and land” concept. Additionally, the burden of proof to show a change in domicile, including proving one’s subjective intent, rests upon the party alleging the change. So in a typical move-out situation, such as where a taxpayer is trying to prove a change of domicile away from New York and into Florida, the taxpayer bears the burden to prove both intent and action. But the analysis is very different in the opposite situation where the Tax Department attempts to prove a move into New York. It is this post-move burden of proof that warrants the most attention in our After the Move series.

In almost all residency cases, courts start their analysis of the domicile issue with the language used by the Court of Appeals more than 100 years ago in Matter of Newcomb. As explained by the Court of Appeals in this seminal case, “Residence means living in a particular locality, but domicile means living in that locality with intent to make it a fixed and permanent home.” Although “intent” is therefore a significant focus of any domicile analysis, it is also true that actions are involved in the analysis, as outlined in other language from the Newcomb decision:

Subject to the qualifications named every human being may select and make his own domicile, but the selection must be followed by proper action. Motives are immaterial, except as they indicate intention. 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 whatever, provided there is an absolute and fixed intention to abandon one and acquire another and the acts of the person affected confirm the intention.

Again, when taxpayers are leaving New York, they must therefore show both that they intended to change their domicile and that their actions confirm that intention. But based on the analysis employed by the Newcomb court (and other courts for the last 100 years), the application of the test looks very different when it is the Tax Department trying to prove a move into New York. Newcomb makes clear that in order 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.” In other words, if the issue is whether a taxpayer has somehow reestablished their former New York domicile, the Tax Department not only bears the burden to prove that the taxpayer’s actions suggest a New York domicile; the Tax Department also bears the burden to prove that the taxpayer intended to establish that domicile.

This is a tall order; in our experience, the Tax Department knows this, which is why it so closely scrutinizes changes of domicile away from New York. Once a taxpayer successfully establishes a change of domicile outside of New York, the taxpayer may be able to later reacquire certain connections within the state without running the risk of reestablishing a New York domicile, so long as the taxpayer does not intend to create a new permanent home in New York. In other words, it is often worth the difficult fight in order to break one’s existing New York domicile, because, going forward, the burden of proof on any future domicile questions will shift from the taxpayer to the Tax Department.

This may be why there is a dearth of case law where the Tax Department has actually been able to establish that the taxpayer intended to change domicile into New York. In Matter of Knight, for example, the taxpayer in question worked in New York, had a girlfriend in New York, and spent considerably more time in New York than in New Jersey, where he had claimed domicile for many years. Nonetheless, he was able to succeed because the Tax Department could not meet its burden of proof on the other important factor in any domicile dispute: intention. The Tax Department could not prove that despite all these connections, the taxpayer intended to establish his primary home in New York.

Indeed, taxpayers cannot become domiciled in New York “by accident,” or because they built up enough actions to unwittingly create a domicile for themselves. They actually have to intend to become domiciled in New York in order to be subject to that test. A taxpayer can, of course, accidentally become a resident of New York by virtue of spending too many days in the state or city; this is why New York has its statutory residency test. The legislature recognized that because domicile is tied so heavily into intention, the law could produce an unfair situation where a taxpayer is basically living in New York even though the taxpayer has an existing domicile in another state. The statutory residency test corrects for that. But the same thing cannot happen with respect to the domicile test. A taxpayer cannot become domiciled in New York unless she absolutely intends to make her permanent home here.

This is a crucial (and helpful) distinction for taxpayers who establish their domicile outside of New York but who then, in a future tax year, unexpectedly are forced to reestablish temporary connections in New York. For example, we have seen this situation arise when taxpayers end up with a discrete professional or family commitment back in New York following their change of domicile away from the state. The burden of proof in this scenario works in the taxpayer’s favor, by allowing the taxpayer to temporarily return to the state without reestablishing a New York domicile.  

In Matter of Bostwick, another decision involving an alleged move into New York, the Tax Department claimed that the taxpayer had changed her domicile from New Jersey to New York because, in part, the taxpayer spent only three days in New Jersey and 165 days in New York for the period in question. The taxpayer also subleased an apartment in New York City, which she testified that she intended to use temporarily while travelling after college, and held temporary employment positions in New York City. In finding that the taxpayer remained a New Jersey domiciliary, an administrative law judge from the Division of Tax Appeals stated that the taxpayer’s testimony, “provided in a forthright and credible manner,” clearly indicated a “lack of any intention to change her domicile or set up permanent residence in New York City.” The taxpayer was instead “wandering from place to place at the time, trying to find herself, traveling and having fun in the meantime.” This ability to wander from place to place can provide taxpayers with a welcome sense of relief and flexibility following a successful change of domicile away from New York.

As a final word of caution, however, it is worth noting that it is certainly not impossible for the Tax Department to carry its burden on the issue of domicile, even after a taxpayer has clearly established his domicile outside of the state. In Matter of Biggar, the Tax Department successfully met its burden of proving that a taxpayer “landed” in New York and established a New York domicile, despite the taxpayer’s claims that he never formed the intent to do so. In Briggar, the issue was whether the taxpayer was a New York State/City domiciliary in 2014. The taxpayer was born and raised in New Zealand, where he lived until 1991. He then spent the next 20 years working in various locations, including London, Canada, and a few stints in New York City. He also purchased a place in New York City, where between 2010 and 2015, he generally spent 250–300 days in New York City each year versus only a handful of days in New Zealand. In 2014, the year at issue, he spent 130 days in New Zealand and only 100 in New York City. The taxpayer argued that because he never “landed” in the City or formed the intent to live there permanently, he couldn’t be taxed as a resident in 2014 (a year in which he fell below the 183-day statutory residency threshold). But the Tax Appeals Tribunal rejected the taxpayer’s argument, finding his claims not credible and holding that the Tax Department had proved that the taxpayer changed his domicile to New York City prior to the year in question.

Although there were unique facts and an extended timeline of connections to New York that worked against the taxpayer in Briggar, the decision serves as a reminder that just as taxpayers are often able to meet their burden of proving a change of domicile away from New York, so too can the Tax Department, given the right set of facts, prove a change of domicile into New York.

Statutory Residency in the Year of Domicile Change

At the intersection of statutory residency and domicile concerns for ex-New Yorkers is what can happen under the statutory residency test during a year in which a taxpayer effectuates their change of domicile. Again, this question can impact a taxpayer’s behavior following a move away from New York. This is because the statutory residency, or 183-day, test is a calendar year test that applies throughout the year of the move. In other words, even if a taxpayer clearly changes her domicile from New York City to Florida on June 1, 2023, her connections to New York in the six months following her change of domicile have a direct impact on her 2023 residency status and how any post-move income is taxed in New York.

First, if the taxpayer continues to maintain a permanent place of abode for substantially all of 2023, the taxpayer will have met the first prong of the statutory residency test. The statutory residency test requires that a permanent place of abode be maintained “for substantially all of the taxable year.” Prior to tax year 2022, it was the policy of the Tax Department to interpret this phrase to mean a period exceeding 11 months. Beginning with tax year 2022, however, the Tax Department now defines “substantially all of the year” to mean a period exceeding 10 months. So if the taxpayer who moves on June 1, 2023 continues to maintain living quarters in New York through November or December of 2023, he runs the risk of qualifying as a full-year statutory resident for all of 2023.

The “substantially all of the taxable year” test matters only, however, if the taxpayer also spends more than 183 days in the state or city during the year in question. But if we are considering a taxpayer who moved on June 1, 2023, it is very possible the taxpayer has already come dangerously close to the 183-day count threshold, especially if she plans to spend any post-move days back in New York. And if the taxpayer qualifies as a statutory resident for all of 2023, she will be taxed as a resident for the entire year even though her domicile may have changed at the midway point, meaning any non–New York source income recognized after the change of domicile will continue to be taxed in New York. This means that the test for statutory residency can apply even in a situation where an individual changes her domicile during the tax year, which raises important post-move considerations regarding the amount of time to spend in New York and the length of time for which a taxpayer should continue to maintain a permanent place of abode in New York.


I have mentioned this throughout this series, but changing your tax residency can be hard. A New York State residency audit is onerous. The audit process is invasive and time consuming. This series is therefore intended to make sure taxpayers understand what awaits on the other side of a potentially bumpy exodus from New York. As Part One and Part Two showed, there are several pitfalls to watch for when it comes to the future recognition of post-move New York source income. There are also, however, significant benefits and opportunities that, as Part Three demonstrates, include an important shift in the burden of proof on the future changes of domicile. In any event, a solid grasp of New York State’s tax rules as applied to nonresidents is essential for understanding what comes After the Move.

K. Craig Reilly, Esq., is a partner at Hodgson Russ. Craig counsels businesses and individuals in a range of state and local tax issues, with a focus on New York State, New York City, New Jersey, and multistate tax issues. Craig advises clients on all aspects of state and local tax from planning and compliance to controversy and litigation. He represents clients in disputes with the New York State Department of Taxation and Finance, New York City Department of Finance, and New Jersey Division of Taxation and is experienced in handling sales tax, corporate franchise tax, personal income tax, and residency audits. Craig works closely with remote retailers and cloud-based software vendors on a variety of multistate tax compliance issues, including filing requirements, sales and use tax collection obligations, income allocation and apportionment, tax registrations, and applications for voluntary disclosure and other amnesty programs. Craig also spends significant time counseling businesses and individuals in the financial services sector on various multistate tax planning topics, including residency planning, income apportionment and allocation, state and city entity level taxes, and entity restructuring.

Views expressed in articles published in Tax Stringer are the authors' only and are not to be attributed to the publication, its editors, the NYSSCPA or FAE, or their directors, officers, or employees, unless expressly so stated. Articles contain information believed by the authors to be accurate, but the publisher, editors and authors are not engaged in redering legal, accounting or other professional services. If specific professional advice or assistance is required, the services of a competent professional should be sought.