Every year, some 55,000 New Yorkers move to Florida, more than those who migrate to any other state. In addition to year-round sunshine, ex-New Yorkers also get relief from some of the country's highest state taxes. And while academics disagree on just how much taxes influence moving decisions, studies show taxes especially sway retirees and other folks living off investment income. According to the AARP, more than half of New Yorkers over age 50 who are planning to retire said they're considering leaving the state.
New York is not taking this lying down. Few states are as strict about residency rules, accountants and attorneys say, which means that if New Yorkers want to leave–and take state tax revenue along with them–they must prove they really are gone. Each year, New York's Department of Taxation and Finance collects more than $200 million from "residency audits," in which taxpayers must provide elaborate evidence of their whereabouts.
The first test of residency is deceptively simple. If you want to stop paying New York income tax, you must prove you’re spending more than half the year outside New York. If you're close to the 183-day limit, you may need to account for every single day, and that's not always easy. The state will look at phone records, credit card receipts, and other bills. That evidence isn’t always clear-cut, says attorney Karen Tenenbaum. A call is made from the landline at your Manhattan pied-a-terre: Was that you, back in New York, or your sister borrowing the place while you’re in Miami?
When it comes to counting days in New York, the taxman is strict. If you're flying back to Florida from JFK, for example, and your plane's 11:30 p.m. departure from Queens is delayed until after midnight—bam, you've just spent an extra taxable day in New York. Attorneys and accountants recommend that clients fleeing New York taxes fly through Newark.
There are a few exceptions. A return to New York for an inpatient medical procedure doesn’t count as a day in New York. If your spouse visits you in the hospital, on the other hand, it counts for him or her.
Even if a taxpayer manages to stay away from New York for more than half the year, New York doesn’t always let them off the hook–especially if they have a big tax bill. Another test of residency is your “domicile,” which New York defines as the place you intend to return to. For example, any real estate still owned in New York will be scrutinized, especially if it’s bigger or more expensive than your homes elsewhere. Membership at New York country clubs, churches, and synagogues can raise red flags. As for voting, you definitely shouldn’t do it in New York.
The state also looks at the people and objects you care about. When you moved to Florida, did your art collection move with you? Or is it still hanging on the walls of your Park Avenue coop? Along with your photo albums and keepsakes, the location of your close family members and business interests matter. If you run a business based in Brooklyn but do so remotely from Sarasota most of the year, you can still expect New York to demand its take.
If you really want to dodge New York state taxes, it turns out the most straightforward way to do so is actually to move, along with everything that entails. Go figure.