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The Snow Birds' Tax Trap

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It's what a lot of people dream about -- to live in a state where the sun always shines and they (legally) don't have to pay state income tax. In New York, we call them "Snow Birds." These are individuals who spend their winters in Florida and their summers up north.

Based on numerous discussions I've had with Snow Birds, there seems to be a misconception on their part that the number of days a person spends in a given state dictates whether he or she is required to pay state income tax. Unfortunately, taxes are never as simple as counting days. To better understand this issue, it's important to review certain terms: domicile, statutory resident, and resident and nonresident, all of which affect how much state tax an individual ends up paying.


Most states define domicile as the locality in which a person intends to make their fixed and permanent home. A person can only have one domicile at a time. Once a domicile is established, such location will continue to be his or her domicile until the person can show "with clear and convincing evidence" that they have changed their domicile to a new location.

The most significant challenge a person has in supporting a change in domicile is proving "intent." For example, if a person sells his existing New York home (without replacing it with another home in New York) and purchases a home Florida, there should be little doubt that the person's intention is to change his domicile to Florida. However, if the same person retains his New York home and purchases a home in Florida, determining the person's intentions becomes much more difficult. Many states, including New York, look to five factors to determine a person's intent when the person has multiple homes: (1) size and value of homes; (2) business connections in the state; (3) location of items of sentimental value; (4) time spent in a given location; and (5) location of family.

In addition to "intent," there are other "points of evidence" states look to when determining if an individual has changed domicile, including: new driver's license; change of address announcements; re-registering cars; registering to vote; etc. Many tax advisors consider this type of evidence as "window dressing." That is, just having this evidence, without the intent, will likely not reach the "clear and convincing evidence" standard held by most states. However, without obtaining the window dressing, a state will likely deny the change in domicile without looking at the person's intent.

Statutory Resident

A person can change his or her domicile but still be taxed as a resident. This is known as being a statutory resident. In general, a non-domiciliary who maintains a permanent place of abode (i.e., home) in a state for substantially the entire year and spends more than 183 days in the state is deemed a statutory resident. There are numerous issues to consider when evaluating statutory resident status, including: (1) what is a "permanent place of abode"; (2) how long is "substantially the entire year"; and (3) what is a "day" when evaluating the "more than 183 days" test.

Resident and Nonresident

In general, a resident is an individual that is classified as either being domiciled or a statutory resident in a given state. If an individual is deemed a resident, the state typically subjects to tax all of the individual's taxable income. A nonresident is an individual who is not classified as a resident. A state can require a nonresident to file and pay state tax if the individual receives income from such state (e.g., income from property located in the state).

Based on the above discussion, it becomes clear that not paying state income tax is much more difficult than just keeping track of one's whereabouts. There are numerous hurdles an individual faces when attempting to achieve this goal. Many of these hurdles require careful up-front planning along with contemporaneous documentation. However, with proper planning, individuals can and do successfully fend off state tax auditors and reap the benefits of being domiciled in a state that has little or no income tax.

David Seiden is a leading authority on state and local tax ("SALT") matters. He is a partner with the accounting and consulting firm Citrin Cooperman, where he leads the firm's SALT Practice. He can be reached at (914) 949-2990 or

Citrin Cooperman is a full-service accounting and business consulting firm with offices in New York City; White Plains, NY; Norwalk, CT; Livingston, NJ; and Philadelphia.