If a New York domiciliary sells his last U.S. home and moves permanently onto a sailboat that sails away from the United States, can he still be treated as a New York nonresident for income tax purposes even though he never legally establishes a new domicile?

Plain-English summary

Petitioner, Richard Ellis Pentoney, sold his last U.S. home in Syracuse, New York in 1979 and, together with his wife and daughter, moved aboard the sailing vessel HERON, then docked in Kittery, Maine, while it was being outfitted for permanent world sailing. That outfitting finished in 1981, and the family sailed away from the United States. The HERON never returned to U.S. waters except once, for a two-week visit to settle personal matters. Petitioner owns and maintains no house or property anywhere in the United States, and states the HERON has been his sole abode since 1979 and is intended to remain so indefinitely; if he ever has to move ashore, he doesn't intend to establish a new home in any northern U.S. state, and perhaps not anywhere in the United States. A New York address he uses on correspondence belongs to a friend, Mr. Mabie, who merely forwards Petitioner's mail and holds power of attorney over his financial affairs - it has never been Petitioner's actual abode.

The Department first analyzed whether Petitioner had changed his domicile away from New York. Under 20 NYCRR 105.20(d) and cases like Matter of Newcomb and Matter of Starer v. Gallman, changing a domicile requires both an actual move to a new location and a genuine intent to make that specific place one's fixed, permanent home - and the burden of proving that change rests on the person claiming it. Because Petitioner's life aboard the HERON wasn't anchored to any particular new fixed location (much like the merchant seaman in Starer v. Gallman, who was held not to have changed his domicile by living aboard ship in Hoboken), the Department concluded he had not proven a change of domicile. New York therefore remained his domicile.

That did not end the analysis, however. The Department separately found that the HERON itself qualifies as Petitioner's "permanent place of abode" under 20 NYCRR 105.20(e), since it has been his sole, indefinite dwelling place since 1979. Critically, that permanent abode is not in New York - it left U.S. waters in 1981 and has not returned. Since 1979, Petitioner has maintained no permanent place of abode in New York, has maintained a permanent place of abode (the boat) elsewhere, and has not spent more than 30 days in New York in any year. That satisfies all three conditions of the Tax Law § 605(b)(1)(A) exception. So even though Petitioner remains a New York domiciliary, he qualifies as a New York nonresident for personal income tax purposes - domicile and residency status came out differently.

What this means for you

People living aboard boats, RVs, or other itinerant lifestyles

If you leave your last fixed home behind for a mobile lifestyle - a boat, an RV, or similar - without settling into a specific new fixed location, you may not succeed in changing your legal domicile away from New York, because domicile requires intent to make a particular place your new permanent home, not just an intent to leave the old one. But that doesn't necessarily mean you owe New York tax as a resident. If your boat or vehicle itself qualifies as your "permanent place of abode," and that abode is located outside New York, and you keep your time in New York to 30 days or less per year, you can still qualify as a New York nonresident under Tax Law § 605(b)(1)(A) even while remaining a New York domiciliary.

Taxpayers confusing "domicile" with "residency status" for tax purposes

Domicile and tax residency are related but separate questions. Domicile is about where you intend your permanent home to be, and once established it continues until you prove - with the burden on you - that you've moved to a new fixed location with genuine intent to make it your new permanent home. Residency status for tax purposes, by contrast, turns on the specific statutory tests in Tax Law § 605(b)(1): a domiciliary can still be treated as a nonresident if they maintain no permanent abode in New York, maintain one elsewhere, and spend 30 days or less in New York each year. Don't assume that failing to prove a change of domicile means you're taxed as a New York resident - check the separate abode-and-days tests too.

Common questions

Q: Can someone remain a New York domiciliary and still qualify as a New York nonresident for income tax purposes?
A: Yes. This opinion holds exactly that. The Department found Petitioner had not proven a change of domicile, so New York remained his domicile, but he still qualified as a nonresident under Tax Law § 605(b)(1)(A) because he maintained no permanent abode in New York, maintained one elsewhere (the HERON), and spent 30 days or less in New York each year.

Q: Why didn't living aboard the sailing vessel count as establishing a new domicile?
A: Under 20 NYCRR 105.20(d) and cases like Matter of Newcomb and Matter of Starer v. Gallman, a change of domicile requires both residence and intent to make a particular new location one's fixed, permanent home. Because the HERON wasn't tied to any specific new fixed location (it sailed the world rather than settling somewhere), the Department found Petitioner had not shown the intent needed to establish a new domicile - paralleling Starer v. Gallman, where a seaman living aboard a docked ship was held not to have changed his domicile.

Q: If the boat didn't establish a new domicile, how could it still count as a "permanent place of abode"?
A: Domicile and permanent place of abode are different legal concepts with different tests. A permanent place of abode under 20 NYCRR 105.20(e) just needs to be a dwelling place permanently maintained by the taxpayer as their actual living quarters - it doesn't require the fixed-location intent that domicile requires. Because the HERON was Petitioner's sole, indefinite dwelling since 1979, it qualified as his permanent place of abode even though it didn't establish a new domicile.

Q: What's the difference between the 30-day rule and the 183-day rule?
A: Tax Law § 605(b)(1)(A) is an exception that lets a New York domiciliary be treated as a nonresident if they have no permanent abode in New York, have one elsewhere, and spend 30 days or less in New York per year. Tax Law § 605(b)(1)(B) is a separate "statutory residency" test that can make a non-domiciliary a resident if they maintain a permanent abode in New York and spend more than 183 days there in the year. Petitioner's situation only involved the first test, since he had no New York abode at all to trigger the second.

Q: Did the New York mailing address Petitioner used matter to the outcome?
A: No. The Department noted that the address belonged to a friend, Mr. Mabie, who only collected and forwarded Petitioner's mail and held power of attorney over his financial affairs; it was never Petitioner's actual abode, so it didn't count as a permanent place of abode in New York.

Q: Who has the burden of proving a change of domicile?
A: The person asserting the change. Under 20 NYCRR 105.20(d) and Matter of Newcomb, the existing domicile continues until a new one is acquired, and the burden rests on the party claiming the change to show both an actual move and the requisite intent.

Citations and references

• Tax Law § 605(b)(1)(A) - lets a New York domiciliary be treated as a nonresident if they maintain no permanent abode in New York, maintain a permanent abode elsewhere, and spend 30 days or less in New York in the year
• 20 NYCRR 105.20(d) - defines domicile and places the burden of proving a change of domicile on the person asserting it
• 20 NYCRR 105.20(e) - defines a permanent place of abode as a dwelling place permanently maintained by the taxpayer
• Matter of Newcomb (192 NY 238) - domicile requires both bodily residence in a place and intent to make it one's fixed, permanent home
• Matter of Starer v. Gallman (50 AD2d 28) - a merchant seaman's stateroom aboard a docked ship was not enough to change his New York domicile

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1998.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a98_1i.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-98(1)I
Income Tax

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I970926A

On September 26, 1997, a Petition for Advisory Opinion was received from
Richard Ellis Pentoney, 7498 Burke Road, RD 2, Jamesville, New York 13078.
The issue raised by Petitioner, Richard Ellis Pentoney, is whether he is
a nonresident of New York State for personal income tax purposes under Article
22 of the Tax Law.
Petitioner submits the following facts as the basis for this Advisory
Opinion.
Petitioner does not have an abode in New York State or in the United
States. Petitioner's last abode in the United States was 203 Scotholm Blvd.,
Syracuse, New York, which was sold in 1979. When Petitioner sold his abode,
Petitioner, his wife and daughter moved on board the sailing vessel "HERON"
situated in Kittery, Maine, where it was being prepared for permanent world
sailing. This work was completed in 1981, and Petitioner and his family sailed
from the United States. The boat has not returned, but one time Petitioner and
his family did return for two weeks in order to clean up some personal matters.
Petitioner states that the vessel "HERON" has been his sole abode since 1979 and
he intends it to remain so indefinitely. If circumstances dictate that he must
move ashore, Petitioner does not intend to establish a new abode in any northern
state and perhaps not anywhere in the United States.
Petitioner does not own or maintain any house or property in the United
States.
Petitioner states that the address at 7498 Burke Road, RD2, Jamesville, New
York 13078 that is used on his correspondence is the residence of Mr. J. Donald
Mabie, a friend who collects and forwards Petitioner's mail to him whenever he
is in one of the world's ports long enough. Mr. Mabie has power of attorney to
act for Petitioner with regard to financial matters. Mr. Mabie's address has
never been Petitioner's abode and Petitioner does not intend to return there.
Section 605(b)(1) of the Tax Law defines a resident individual as an
individual:
(A) who is domiciled in this state, unless (i) he maintains no
permanent place of abode in this state, maintains a permanent place
of abode elsewhere, and spends in the aggregate not more than thirty
days of the taxable year in this state ... or
(B) who is not domiciled in this state but maintains a permanent
place of abode in this state and spends in the aggregate more than
one hundred eighty-three days of the taxable year in this state,
unless such individual is in active service in the armed forces of
the United States.

-2­
TSB-A-98(1)I
Income Tax

Section 105.20(d) of the Personal Income Tax Regulations ("Regulations")
defines domicile, in pertinent part, as follows:
(1) Domicile, in general, is the place which an individual
intends to be such individual's permanent home -- the place to which
such individual intends to return whenever such individual may be
absent.
(2) A domicile once established continues until the individual
in question moves to a new location with the bona fide intention of
making such individual's fixed and permanent home there. No change
of domicile results from a removal to a new location if the
intention is to remain there only for a limited time; this rule
applies even though the individual may have sold or disposed of such
individual's former home. The burden is upon any person asserting
a change of domicile to show that the necessary intention existed.
In determining an individual's intention in this regard, such
individual's declarations will be given due weight, but they will
not be conclusive if they are contradicted by such individual's
conduct...
(4) A person can have only one domicile....
Section 105.20(e) of the Regulations defines permanent place of abode, in
pertinent part, as follows:
(1) A permanent place of abode means a dwelling place
permanently maintained by the taxpayer, whether or not owned by such
taxpayer, and will generally include a dwelling place owned or
leased by such taxpayer's spouse. However, a mere camp or cottage,
which is suitable and used only for vacations, is not a permanent
place of abode. Furthermore, a barracks or any construction which
does not contain facilities ordinarily found in a dwelling, such as
facilities for cooking, bathing, etc., will generally not be deemed
a permanent place of abode. Also, a place of abode, whether in new
York State or elsewhere, is not deemed permanent if it is maintained
only during a temporary stay for the accomplishment of a particular
purpose....
Section 105.21 of the Personal Income Tax Regulations defines a nonresident
individual, in pertinent part, as anyone who is not a resident individual as
defined in section 105.20 of the Personal Income Tax Regulations.
In Matter of Starer v Gallman, 50 AD2d 28, the petitioner, a domiciliary
of New York State obtained employment in 1967 with a shipping company and was
assigned to a ship out of the port of Hoboken, New Jersey. When he accepted this
employment, he intended to make his home there and not to have a New York home.

-3­
TSB-A-98(1)I
Income Tax

He joined a union in New Jersey and obtained a post office address and bank
account in Hoboken. He did not vote in New York in 1967.
During the entire
year 1967 he lived on board the ship, even when the ship was in port. The court
held that the merchant seaman's stateroom on a ship, such stateroom "can hardly,
either in law or logic, be considered a residence in Hoboken, nor do we consider
the other evidence offered by petitioner as to a change of domicile sufficient
to change his last previous domicile, which in this instance is New York State."
To effect a change in domicile, there must be actual change in residence,
coupled with an intent to abandon the former domicile and to acquire another
(Aetna National Bank v Kramer, 142 App Div 444,445). Both the requisite intent
as well as the actual residence at the new location must be present (Matter of
Minsky v Tully, 78 AD2d 955). The concept of intent was addressed by the Court
of Appeals in Matter of Newcomb (192 NY 238, 250-251):
Residence means living in a particular locality, but domicile means
living in that locality with intent to make it a fixed and permanent
home. Residence simply requires bodily presence as an inhabitant in
a given place, while domicile requires bodily presence in that place
and also an intention to make it one's domicile.
The existing domicile, whether of origin or selection, continues
until a new one is acquired and the burden of proof rests upon the
party who alleges a change. The question is one of fact rather than
law, and it frequently depends upon a variety of circumstances which
differ as widely as the peculiarities of individuals.... In order
to acquire a new domicile there must be a union of residence and
intention.
Residence without intention, or intention without
residence is of no avail.
Mere change of residence although
continued for a long time does not effect a change of domicile,
while a change of residence evidence for a short time with the
intention in good faith to change the domicile, has that
effect....Residence is necessary, for there can be no domicile
without it, and important as evidence, for it bears strongly upon
intention, but not controlling, for unless combined with intention,
it cannot effect a change of domicile....
In this case, Petitioner was a domiciliary of New York State before he
started living on his sailing vessel, the "HERON". The burden of proof is on the
Petitioner to prove that he has effected a change in domicile. In order to
effect a change in domicile, Petitioner must show, pursuant to section 105.20(d)
of the Regulations and the cases cited above, that he has established a residence
at a particular location and that he intends to make that location his new
domicile. Petitioner may intend to give up his New York domicile, but based on
the facts presented Petitioner has not shown that he has established a new
domicile. Therefore, New York State continues to be Petitioner's domicile.
However, Petitioner’s sole abode since he sold his home in Syracuse, New
York, in 1979, has been his sailing vessel, the "HERON". Pursuant to section
105.20(e) of the Regulations, this sailing vessel constitutes a permanent place
of abode under the circumstances presented. When Petitioner began living on the
"HERON", it was situated in Kittery, Maine. It remained there until 1981 when

-4­
TSB-A-98(1)I
Income Tax

Petitioner, and his family, sailed from the United States. To date, the "HERON"
has not returned to the United States. Petitioner states that he returned one
time to the United States for two weeks to settle some personal matters.
Petitioner has not maintained a permanent place of abode in New York State since
he sold his home in 1979 and he has not been present in New York State more than
30 days for any taxable year after 1979.
Therefore, pursuant to section 605(b)(1)(A) of the Tax Law, Petitioner, as
a domiciliary of New York State, has met the requirements to be considered a
nonresident oNew York State.
After 1979, Petitioner has not maintained a
permanent place of abode in New York State for any taxable year, has not spent
more than 30 days of any year in New York State, and has maintained a permanent
place of abode outside New York State. Accordingly, Petitioner is a nonresident
of New York State for personal income tax purposes under Article 22 of the Tax
Law.

DATED: February 2, 1998

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau
The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.