Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-302-9400 or toll-free at 844-653-2873.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-302-9400 or toll-free at 844-653-2873.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Thinking of leaving New York to avoid taxes? Read this first.

On Behalf of | Jun 4, 2024 | Tax Audits

New York has a reputation for high tax rates. Not surprisingly, many savvy professionals have chosen to relocate to lower tax states to reduce their tax burden. Unfortunately, many make the move only to find that they still owe taxes in New York.

It is extremely frustration to leave all New York has to offer to avoid the state’s high taxes and find yourself still facing a tax bill. This post serves two purposes: a warning and a blueprint.

Warning: Plan your move carefully

Those who are thinking of relocating to reduce their tax obligations are wise to reach out to professionals to better ensure they do so wisely. A failure to follow proper protocol can mean you still owe taxes in New York. Take the time to make sure you carry out the relocation correctly to mitigate this risk.

Even if relocation is done correctly, New York will likely expect payment of tax obligations for any portion of the year you were a New York resident prior to the move.

Blueprint: Two things New York tax officials look for

Those who are considering or have recently moved can benefit from a basic understanding of how New York taxing officials try to claw back taxes from those who move to another state. Generally, New York state taxing authorities will consider a taxpayer a resident for taxing purposes if they are domiciled in the state. This is a legal term that generally means your residence is in the state.

It is important to note that the state is fierce in its review of domicile. They will scour your records and look for connections that remain within New York to argue that you have not truly left. Examples the state may use to build their argument can include evidence the taxpayer is retaining a small apartment in the city, continuing to receive medical care in the state, or even using a veterinarian located in New York. If you have enough connections, the state may attempt to argue that New York is still your domicile. You will need to gather evidence to defend your stance or else they may push forward and demand payment of a hefty tax bill.

This is not where the analysis ends. Additional issues can include:

  • Second residence. Authorities in New York recognize that a taxpayer may have multiple residences and that these residences may be in different states. They may recognize that you moved to another state but still claim you have a second residence within New York — thus making you subject to New York taxes. This generally includes a review looking to see if you maintain a second residence in the state and spend 184 days or more in the state during the tax year.
  • Income. Even if you establish all of the above, the state will likely claim tax obligations on income from New York.

This foundational information can help as you begin to explore leaving the state. Whether preparing for a move or facing a New York tax audit, it is wise to seek legal counsel. The attorneys at Goldburd McCone have experience in these matters and can help gather evidence to defend your interests against the New York State Tax Department.