Domicile versus residency


B

Bruce Nelson

Here is something I haven't seen before:

Taxpayer's job is eliminated in Nebraska, but he is offered
a comparable position with the same company in Texas. He
moves to Texas in Sept 2003 where he leases an apartment. He
renews his Neb driver's license in Feb 2004 and votes by
absentee ballot in November 2004. Early in 2005 he gets a
Texas driver's license and buys a car that is registered in
Texas.

He claims he is a residence of Texas and should not have to
pay tax on his income to Nebraska. But here is the kicker.
He still has two homes in Nebraska (one is a vacation home -
yeah, I know --I wouldn't have a vaction home in Nebraska
either) and his wife and children still live there! And no,
he has not abandoned his wife or children. He is happily
married and wants to let his kids finish high school there.

My immediate reaction is that while he has taken steps to
create residency in Texas, he has not abandoned his domicile
in Nebraska; thus he remains a Neb resident for income tax
purposes. Any thoughts, comments?
 
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K

Katie

Nebraska defines a resident to include every person who is
domiciled in Nebraska. The regulation says that every
person domiciled in Nebraska is a resident, "even while
absent for temporary or transitory purposes." I can't find
much case law in Nebraska on the subject of residence or
domicile (maybe it's just my research service acting up this
morning). It's possible that the language of the regulation
might give this individual a clummock to stand on in the
swamp, viz: My absence is not for temporary purposes,
because I have accepted employment in Texas that has no
fixed termination date. Therefore I am not a resident as
described in the regulation.

I would agree with you that he has not established a new
domicile in Texas, and remains domiciled in Nebraska.
However, if we tweak the facts just a little bit, we might
reach the opposite conclusion. What if the intention of
this family is to make a permanent move to Texas as soon as
the kids are through high school? Suppose they plan to buy
a home in Texas as soon as they can sell their primary home
in Nebraska? Suppose he registers to vote and actually votes
in Texas? (And a vacation home on a lake in Nebraska might
be a pretty good deal if you lived in Texas <G>.) Then
maybe HE has changed his domicile to Texas, while his wife
and kids remain domiciled in Nebraska. It could happen.

Katie in San Diego
 
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A

A.G. Kalman

Katie said:
Nebraska defines a resident to include every person who is
domiciled in Nebraska. The regulation says that every
person domiciled in Nebraska is a resident, "even while
absent for temporary or transitory purposes." I can't find
much case law in Nebraska on the subject of residence or
domicile (maybe it's just my research service acting up this
morning). It's possible that the language of the regulation
might give this individual a clummock to stand on in the
swamp, viz: My absence is not for temporary purposes,
because I have accepted employment in Texas that has no
fixed termination date. Therefore I am not a resident as
described in the regulation.

I would agree with you that he has not established a new
domicile in Texas, and remains domiciled in Nebraska.
However, if we tweak the facts just a little bit, we might
reach the opposite conclusion. What if the intention of
this family is to make a permanent move to Texas as soon as
the kids are through high school? Suppose they plan to buy
a home in Texas as soon as they can sell their primary home
in Nebraska? Suppose he registers to vote and actually votes
in Texas? (And a vacation home on a lake in Nebraska might
be a pretty good deal if you lived in Texas <G>.) Then
maybe HE has changed his domicile to Texas, while his wife
and kids remain domiciled in Nebraska. It could happen.

Katie in San Diego
Okay, Katie.... what's a "clummock"?
 
Last edited by a moderator:
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D

David Woods, EA, ChFC, CLU

Bruce Nelson said:
Here is something I haven't seen before:

Taxpayer's job is eliminated in Nebraska, but he is offered
a comparable position with the same company in Texas. He
moves to Texas in Sept 2003 where he leases an apartment. He
renews his Neb driver's license in Feb 2004 and votes by
absentee ballot in November 2004. Early in 2005 he gets a
Texas driver's license and buys a car that is registered in
Texas.

He claims he is a residence of Texas and should not have to
pay tax on his income to Nebraska. But here is the kicker.
He still has two homes in Nebraska (one is a vacation home -
yeah, I know --I wouldn't have a vaction home in Nebraska
either) and his wife and children still live there! And no,
he has not abandoned his wife or children. He is happily
married and wants to let his kids finish high school there.

My immediate reaction is that while he has taken steps to
create residency in Texas, he has not abandoned his domicile
in Nebraska; thus he remains a Neb resident for income tax
purposes. Any thoughts, comments?
Does he intend to ultimately return to Nebraska?
 
Last edited by a moderator:

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