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Welcome to Florida sign board.New York’s high income tax rates have prompted some high-income taxpayers to relocate to lower-tax states, such as Florida and Texas. Consequently, fiscal revenues in New York have suffered and, not surprisingly, audits of taxpayers asserting a change in domicile have increased. New York conducts roughly 3,000 nonresidency audits annually and has collected approximately $1 billion in revenue between 2010 and 2017 as result of these audits. The Tax Cuts and Jobs Act of 2017 capped the federal income tax deduction at $10,000 for state and local income taxes, which will likely result in an increase in the number of high income taxpayers changing domicile to a low tax state.

This article is intended to provide a legal analysis of change of domicile under New York law and its residency audit process. While this article focuses on relocation to Florida, a state which imposes no personal income tax, issues and analysis are similar in the case of other low-tax destinations.

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