In a recent article discussing how wealthy taxpayers can survive a state tax audit, The New York Times reports that taxpayers in high tax states like California and New York often assume that spending a minimum of six months plus a day in a lower- or no-tax state is enough to establish residency and avoid taxes in the high-tax state. However, tax authorities such as Pillsbury partner Michael Kosnitzky note that this may not be the best approach.
For instance, in New York, Kosnitzky says, the number of days spent in another state is only one aspect of a five-part test that involves other detailed questions like the size and cost of a home and family and business ties in each state. He also advises those pursuing the residency strategy to play the long game.
“The first one or two years, you shouldn’t come back very much,” Kosnitzky said. “You have to prove that you’ve left. After that, the burden of proof shifts to the state.”