Florida drivers license data prove what so many of us are noticing in our communities: record-setting numbers of people are relocating to Florida from other states. Our new neighbors are people of all ages, not just retirees. Leading the pack are New Yorkers, 64,577 of whom moved here in 2022. Right behind them: 32,184 people from New Jersey. Pennsylvania and Illinois are also setting records for numbers migrating to Florida.
For many, a favorable tax climate is Florida’s number one attraction. Florida has no income tax, no estate tax, no inheritance tax. Obviously, the state you leave will not be happy to lose your tax money, especially if you have a high income or significant assets. It may want more proof then just your physical move. You may be required to prove that the Sunshine State really is your new domicile.
What Is Domicile?
From a legal perspective, domicile and residence are different things. In Keveloh v. Carter, 699 So. 2d 285 (Fla. 5th DCA 1997), Florida’s domicile law is defined this way: Legal residence or ‘domicile’ is the place where a person has fixed an abode with the present intention of making it his or her permanent home. Once established, a domicile continues until it is superseded by a new one. A domicile is presumed to continue, and the burden of proof ordinarily rests on the party asserting the abandonment of one domicile to demonstrate the acquisition of another.
New York, which imposes both a state estate tax and state income tax, is known for vigorously auditing former New Yorkers who claim Florida as their new domicile. New York auditors are reputed to be relentless and thorough; they may monitor social media posts, cell phone records, credit card bills and even dental and veterinary records to determine if a move to Florida is the real deal or merely a tax-dodging sham. According to a March 2019 article from CNBC, New York State conducted 3,000 such audits every year between the years 2010 and 2017. More than half of the former New Yorkers who were audited between 2015 and 2017 failed to prove their Florida domicile to the auditor’s satisfaction. New York ended up recovering an average of $144,270 per audit.
And it’s not just New York that monitors Florida transplants. In 2022, the Nebraska Supreme Court ruled against Duane and Phyllis Acklies, owners of a large trucking company. The Acklies moved to Florida in 2008, claiming they were no longer domiciled in Nebraska. It appeared that they had dotted every “i” and crossed every “t” to support their claim: They changed their voter registrations, drivers licenses, purchased a home in Florida, applied for a homestead exemption. They even drafted a codicil to their Nebraska will that deleted all Nebraska references, replacing them with the word “Florida.” Notwithstanding all that, Nebraska auditors determined that the Acklies still used their Nebraska home as a base when they traveled; spent more time there than in Florida; had some vehicles registered in Nebraska; maintained a golf membership there; and made political contributions in Nebraska. The Acklies had to pay Nebraska income taxes for the years 2010 to 2014.
Proving Florida Is Your Domicile
What steps can you take to prove that Florida is your true domicile? Some steps are obvious. Some are more subtle and no less important.
- Create new estate planning documents that are consistent with Florida law. These documents include your will, trust, power of attorney, health care surrogate.
- Register to vote in Florida.
- Purchase a home in Florida or rent one. If you purchase one, apply for homestead exemption.
- Open bank accounts Florida.
- Move your safe deposit box to a Florida bank.
- Change your address on your credit card accounts.
- Change your address on insurance policies.
- Change your address on all documents.
- Join organizations and religious organizations based in Florida.
- Observe the 183 day rule: You must spend the majority of your time in Florida – meaning 183 days or more. Be sure to keep a log. And remember: New York considers a travel day to or from New York to be a New York day, not a Florida day.
- Register all your vehicles in Florida.
- Obtain a Florida drivers license.
- Retain lawyers and accountants based in Florida.
- Consult Florida doctors and dentists. Auditors may understand that you are seeking medical attention out of Florida, but traveling out of state for regular dental visits could be a red flag.
- Get a library card for the library system in your Florida community.
- Use your Florida address on all legal papers, including on your tax returns.
- Auditors know that you keep with you your most precious belongings. So if you have a pet, be sure you use a veterinarian in Florida. One New York advisor says: “If you want to lose a case very quickly, kennel your dog in New York when you travel.”
- In addition to taking these steps in Florida, you should also take affirmative steps to cancel your ties to your former state. Cancel memberships, let the Supervisor of Elections know you are no longer voting in that state, etc.
- File a Declaration of Domicile: In Florida, you may complete a sworn affidavit in the Circuit Court in which you state your intention to become a Florida resident. This is not a requirement to prove your Florida domicile, nor is it sufficient in and of itself, but it can be helpful.
- Above all, be HONEST. Become a Floridian and don’t attempt a sham residency for tax purposes. You will likely be caught at some point!
One of the first things new Florida residents should do is create estate planning documents and advance directives that conform to Florida law. The Karp Law Firm attorneys can help! Call us for a free consultation at (561) 625-1100.