The Absurd Lengths Billionaires Go to Not “Live” in NYC — Half as Interesting

Quick Overview

New York State aggressively audits wealthy individuals to determine tax residency, collecting over $1 billion in revenue from 2013-2017. Auditors use five domicile factors (home, active business involvement, time spent, items near and dear, family connections) and two statutory residency factors (permanent place of abode, 184-day rule) to prove residency, often requiring meticulous documentation of time spent outside the state to avoid significant tax liabilities.

Summary

Key Points: New York State's residency auditors generated $1 billion in revenue from 2013-2017 by enforcing tax residency rules. New York residents pay taxes on all income earned globally, while non-residents only pay on income earned within the state. Auditors determine domicile based on five factors: home, active business involvement, time spent, items near and dear, and family connections. Individuals can be deemed a 'statutory resident' if they maintain a permanent place of abode in New York and spend more than 183 days in the state. A single minute spent in New York counts as a full day for the 184-day rule, with limited exceptions for medical care or transit. Wealthy individuals like Julian Robertson have gone to extreme lengths, such as meticulously tracking their time and scheduling travel to avoid counting days in New York, to prevent multi-million dollar tax liabilities. Taxpayers can use specialized apps and strategic planning to track their days and provide evidence of non-residency during audits.

Context: New York State has a robust and aggressive tax residency audit program designed to ensure individuals pay their fair share of taxes. Unlike non-residents who are only taxed on income earned within the state, New York residents are subject to taxes on their worldwide income, making residency status a critical determination for high-net-worth individuals. The state's auditors employ a comprehensive set of criteria to establish an individual's true domicile and statutory residency, often delving into personal habits and financial records.