How to move to a new state…tax compliantly

On August 7, 2026, The Wall Street Journal published an article titled, Was His Home Connecticut or Florida? The Difference Is a $13 Million Tax Bill.

The link above is a free “gift” article that you should be able to read without needing a subscription to The Wall Street Journal. But if it does say you need to pay, try clearing your browser’s cookies and cache and try again. Then the gift article should work without asking for payment. 😊

The article summarizes a pending estate tax issue regarding the estate of the late Jack Anderson, who died in 2015. To make a long story short, Anderson’s executor claimed Anderson’s home at the time of his death was Florida. But the state of Connecticut felt otherwise, and ruled that Anderson’s home was Connecticut, which has a state-level estate tax. Therefore, on Anderson’s estate of $108 million, an estate tax of $13.2 million is due to Connecticut.

There is a lot more info behind the Anderson case, and I’ll summarize it a bit. But for now, I want to say I think this case is a great example of what all is involved in changing the state in which you live, or determining which state is your true home if you split time across multiple states.

Specifically, I want to highlight what all is involved from a state-level tax consideration in determining where you truly live, and therefore which state can impose taxes on your income while you’re alive and/or on your estate after you pass. And this comes down to determining your state of “domicile” and state of “residence.” I’ll explain these two critically important terms in a moment. But for now, the thing to know is that a person’s residence is generally the same as wherever their domicile is…but not always. You’ll see what I mean in a little while. Another important thing to know at this point is that your state of residence determines in which state you have to pay state-level income taxes (if any), whereas your state of domicile determines in which state your estate has to pay state-level estate and/or inheritance taxes (if any).

Since it’s common for people to relocate in retirement, split their time between a primary home and a vacation home, or even live in an RV for a few years and not actually have a physical permanent home somewhere, it’s important to understand the potential income tax, estate tax, and/or inheritance tax implications of moving, particularly if you don’t really move. This article won’t hit on every possible scenario in every state, but it should hopefully at least give you a lot to consider and be aware of.

The Anderson case

Let’s get back to the Anderson story.

Anderson ran a hospital management company, and his estate was valued at $108 million when he died in 2015. As of the time of his death, Anderson owned an oceanfront mansion in Florida, a mountaintop mansion in Arizona, and three condominiums in Connecticut.

From 2006 through his death in 2015, he divided his time between the three states, typically staying five and a half months a year in Connecticut, three and a half months in Florida, and three months in Arizona. All three homes were fully maintained, fully furnished and contained personal possessions. Luxury automobiles were also kept at all three properties.

From 1957 through 1970, Anderson lived in Connecticut. In 1970 he moved to Tennessee. In 1980 he moved to Texas. In 2006 he left Texas and began spending time across the three states mentioned above.

As for the history behind the properties in Connecticut, Arizona and Florida: In 1984 he purchased a 4,000 square-foot condo in Connecticut. In 2010 he purchased a second condo of approximately 3,000 square feet in the same complex. In 2014 he purchased a third condo of approximately 2,000 square feet in the same complex. These are the three condos mentioned above that Anderson continued to own and use up until his death in 2015. One of the condos was used by him personally when he was in Connecticut, the other two were used for guests and health aides.

The Arizona property was purchased in 1989, and the Florida property was purchased in 1991.

According to Anderson’s executor, Anderson built a custom astronomy observatory in the Florida property, and he and his family celebrated Christmas there. He also filed a domicile declaration in Florida, held a Florida driver’s license, was registered to vote in Florida, and maintained local bank accounts in Florida.

He maintained multiple automobiles in both Connecticut and Florida, maintained personal friendships and social connections in both states and had “concierge” medicine, which meant he had access to physicians in both states.

According to the Connecticut tax court, the above facts largely showed that the personal, social, and property connections in Connecticut and Florida were generally equal. As for Anderson’s driver’s license and voter registration in Florida, the court said those things favored Florida as his domicile. However, the court found those items are simple administrative tasks and aren’t as persuasive in determining Anderson’s underlying intent of domicile as much as the fact that Anderson consistently spent most of his time in Connecticut. And notice I used the word “intent.” That’s a crucially important concept in proving your state of domicile. More on that in a bit.

All said and done, the court ruled Connecticut was indeed Anderson’s domicile at the time of his death and therefore his estate owes $13.2 million in estate tax. However, the case was appealed and is going back to court on a technicality; that the burden of proof needed to be shown by Anderson’s executor to prove Anderson had redomiciled in Florida should have been lower than what was originally applied in the case. To be determined how this finally plays out.

And in case you’re wondering how Connecticut even knew to question things and look more into Anderson’s domicile: When a nonresident of Connecticut dies and owns real estate within the state, the estate needs to file a formal declaration with the state detailing the property held, its value, and discuss why the person wasn’t actually a resident of the state. This filing is needed because, even as a nonresident of Connecticut, the value of the property within the state could be subject to estate taxes within Connecticut. But in this case, after looking more into Anderson’s domicile fact pattern, the state determined Anderson was domiciled in Connecticut.

The important thing I want to drive home from the Anderson case is that determining someone’s true home, from a tax perspective, isn’t just looking at where someone owns property. It isn’t necessarily where their driver’s license and voter registration are. It isn’t even always where a person spends most of their time. It’s often a larger analysis that considers various things, where no single factor or set of factors drives the decision.

In the case of determining domicile as opposed to residence (I’ll explain the difference in a tad, I swear!), it’s much more a matter of subjective intent, as opposed to black and white objective facts. Which means proving domicile can be a lot more difficult than just taking certain actions and checking certain boxes.

Income taxes vs “death” taxes

Before moving on, I want to give some more detail and distinction between income taxes versus estate and/or inheritance taxes, which are often collectively referred to as “death” taxes. I know most folks are familiar with income taxes and how they work, but I find many people aren’t familiar with estate taxes or inheritance taxes.

Income taxes are taxes someone pays on the income they receive while they’re alive. And income tax returns must be filed every year, assuming a person is indeed required to file a return.

Federally, the U.S. has an income tax. Additionally, most states also impose their own state-level income tax. Currently, all but eight states have a state-level income tax. The states that don’t are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Additionally, Washington state has a very limited income tax, where it only applies to certain capital gains from asset sales.

Separate from income taxes are so called death taxes; taxes that a decedent’s estate might have to pay after the person passes. And there are two potential death taxes; 1) estate taxes and/or 2) inheritance taxes.

An estate tax is a tax levied upon estates over a certain exemption size. For example, the U.S. has a federal estate tax which, for 2026, applies to estates over $15,000,000 per person. If a single person were to die in 2026 with a total estate valued at $16,000,000, their estate would have to pay a federal estate tax of 40% on the $1,000,000 over the $15,000,000 exemption.

For married couples, it’s a bit different at the federal level as the first spouse to die can leave an unlimited amount of estate to the surviving spouse and there would be no estate tax imposed at the time. But there could subsequently be an estate tax imposed when the second spouse dies. That’s beyond the scope of this article though.

Separately, 12 states plus the District of Columbia also impose a state-level estate tax: Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. Each of these states has different rules about the dollar amount of estate size exemption beyond which the estate tax applies, and they each have different estate tax rate percentages. For example, Oregon has the most punitive estate tax exemption threshold, at only $1,000,000. And Connecticut has the highest, aligning with the federal threshold of $15,000,000.

It’s important to note that state-level estate taxes are separate and in addition to federal estate taxes, if any. For example, if a single person in Oregon dies in 2026 with an estate valued at $17,000,000, $2,000,000 of their estate will be subject to federal estate taxes (i.e. $17,000,000 is $2,000,000 over the $15,000,000 federal exemption amount), and $16,000,000 will be subject to Oregon-level estate taxes (i.e. $17,000,000 is $16,000,000 over the $1,000,000 Oregon exemption amount).

Another potential type of death tax is an inheritance tax. Whereas an estate tax applies based on the size of a decedent’s estate, an inheritance tax instead applies based on who inherits the decedent’s estate, and what their relationship was to the decedent.

There is no federal inheritance tax, but five states impose a state-level inheritance tax: Kentucky, Maryland (the only state that has both an estate tax and an inheritance tax), Nebraska, New Jersey, and Pennsylvania.

The easiest way to understand inheritance tax is through an example. I’ll use Pennsylvania:

Any estate value a Pennsylvania-domiciled decedent leaves to a spouse is free from inheritance tax
Any estate value left to a direct descendant and lineal heir (e.g. children, grandchildren, parents) is subject to a 4.5% inheritance tax
Any estate value left to a sibling is subject to a 12% inheritance tax
Any estate value left to nieces, nephews, cousins, friends and others (other than charities; there is no inheritance tax in Pennsylvania on estate value left to a charity) is subject to a 15% inheritance tax

To further this example: if a married person in Pennsylvania dies with an estate valued at $3,000,000, $2,000,000 of which is left to their surviving spouse and $1,000,000 of which is split between their two children, the estate will have to pay a 4.5% estate tax on the $1,000,000 left to the children. There will be no inheritance tax on the $2,000,000 left to the surviving spouse.

For a great summary of each state’s estate and/or inheritance tax information, refer to https://taxfoundation.org/data/all/state/estate-inheritance-taxes/

Domicile and Residence

Finally, the domicile and residence thing! These two words have very specific meanings in the context of state tax matters. Most state taxing authorities consider your residence to be wherever your domicile is. Which means your domicile is extremely important. And there are many things that go into determining your state of domicile, which is especially important if you split your life, assets, and/or time across different states.

While I should ideally start by first explaining what domicile is and then talking about residency (because residency is typically just set to whatever your domicile is), I’m going to go about this in reverse order. And that’s simply because determination of residence is typically a much simpler definition and analysis than determination of domicile.

Jumping right to it, most states define you as a resident of their state if 1) that is your state of domicile, or 2) it’s not your state of domicile but you meet certain objective “statutory” definitions of residency, such as owning real estate in that state AND physically spending more than six months a year in that state. Though note there are often exceptions to the statutory residency thing, such as for people in the armed forces currently stationed in the state.

In the general plain English sense of the word, a person can have multiple residences. For example, maybe your main home is in Connecticut, and you have a snowbird condo you own in Florida where you spend a few months each winter. Both of those properties are your residences, generically speaking, as you live in them at different points of the year.

However, from an income tax perspective, you typically only have one state of residency. This matters because the state in which you’re considered a resident is the state in which all your sources of income are taxed, if the state has a state-level income tax.

Using the example above, assume you’re retired and spend nine months a year in Connecticut and three months a year in Florida. While there could potentially be more to the fact pattern than this, this is otherwise a clear-cut case where you would be treated as a full-year Connecticut resident for income tax purposes. Even though you spend three months a year in Florida, from an income tax perspective, you’d be considered a full-year non-resident of Florida and a full-year resident of Connecticut. As such, Connecticut would tax all your income for year, including IRA distributions you took while you were physically in Florida, dividends you received while you were physically in Florida, etc.

As you can see, although you can have multiple residences in the generic sense of the word, from a state income tax perspective, you can typically only have one formal state of residence at any given time.

There are some exceptions though, where two different states can potentially both claim you as a resident of their state for income tax purposes. In which case both states would tax all your income under their respective income tax rules. Though it’s possible the states might give some you some form of tax credit for the tax you paid to the other state. This is to recognize that it isn’t necessarily fair to fully tax the same dollar of income twice, in two different states.

An example of where you could potentially have two different states of tax residency at the same time is as follows (assuming I’m correctly interpreting and applying each state’s residency rules):

Assume the same facts as the example above; you own a home in Connecticut and live in Connecticut as your primary residence. And you also have the Florida vacation home still.

But now assume you’re still working and not yet retired. So you’re not spending three months a year in Florida in this case. Maybe you only spend a week or two there per year. Instead, you work full-time in New York City, and commute into the city from Connecticut on a daily basis to go to your job. Further assume you also own a small apartment in New York City that you stay at a few days a month to save yourself some commuting time those days in not having to go back and forth to Connecticut.

New York has statutory residency rules whereby if you maintain a “permanent place of abode” in the state AND spend 184 days or more in the state during the year, you are classified as a New York resident for income tax purposes, even though New York isn’t your state of domicile. New York defines permanent place of abode as, “a building or structure where a person can live that you permanently maintain and is suitable for year-round use. It does not matter whether you own it or not.”

In this case, the fact that you own an apartment in the city and are physically in the state at least 184 days a year, you are a resident of New York for income tax purposes. But keep in mind Connecticut also considers you a resident in their state, as that’s your state of domicile. Which means you owe income tax on all your income to both Connecticut AND New York…not cool. Though like I mentioned before, I believe the two states have some sort of tax credit amongst them to account for taxes paid to the other state, so you’re not actually paying each state’s full income tax on the same income.

The analysis here can get tricky with regards to statutory residency. It’s not necessarily black and white. For example, in the case of Obus v. New York State Tax Appeals Tribunal, a person lived in New Jersey and worked full-time in New York City. The person also owned a vacation home in New York, but it was 200 miles north of the city. The vacation home was suitable for year-round use, but he only used it a few weeks a year, for pleasure.

New York tax court originally ruled that Obus was a statutory resident of New York due to his owning the “permanent place of abode” vacation house and spending at least 184 days in the state. However, the decision was subsequently appealed and overturned. The final ruling was that even though the vacation house is technically a permanent place of abode, it’s not realistic to assume Obus could have actually lived there and used it as a place to commute to and from work, considering it was a few hours away from his office location in the city.

But in the example I gave above, where the person lives in Connecticut and owns an apartment in New York City (which is also where he works), I believe it would be found and upheld that the person is a statutory resident of New York, even though he only uses the New York apartment a few weeks a year.

Anyway, enough about residency, let’s now get into domicile…finally! I’ll jump right into a few states’ formal definitions of the word:

“Domicile” is defined by Connecticut as, “the place which an individual intends to be his or her permanent home and to which such individual intends to return whenever absent.”

Similarly, New York defines domicile as “your permanent and primary residence that you intend to return to or remain in after being away (for example, on vacation, business assignments, educational leave, or military assignment).”

Additionally, New Jersey defines it as, “the place where a person has their true, fixed, permanent home and principal establishment, and to which, whenever they are absent, they have the intention of returning.”

Notice all three states use some form of the words intention to return when defining domicile. This is critically important.

Like I mentioned, a person’s residence is usually the same as their domicile, but that’s not always the case. The determination of someone’s residence is typically a black and white definitional thing: it’s 1) your state of domicile or 2) if not your state of domicile, you could be considered a statutory resident. Though the Obus case referenced above shows it’s not always that simple when it comes to statutory residency.

On the other hand, the determination of someone’s domicile is much more dynamic and based on the person’s intent, which could obviously be hard to prove as you can’t get into someone’s head and know definitively what their intent is.

The best way to think about domicile is where you would intend to go home after a vacation, after an extended work trip, after being away at school, after leaving a facility where you received extended medical care, etc.

Another thing to keep in mind with domicile is that you don’t give up your existing state of domicile until you truly and thoroughly establish one in a new state, and fully sever your fact pattern and intention of domicile in the old state. From what I see, this is what tripped up Anderson in his estate’s case; he thought/assumed he had properly established a new domicile in Florida. However, the fact pattern and analysis did not support that. The Connecticut tax court has thus far ruled that Anderson’s intention of where he actually considered home, as of the time of his death, was Connecticut.

And I want to share a related side case about the concept of not shaking off domicile in your old state until you fully and thoroughly demonstrate you’ve established permanent tax ties and domicile with a new state.

In the case of Sanchez v. Commission of Revenue, the Sanchez family lived in Minnesota. They owned a home in Minnesota, worked in Minnesota, paid income taxes in Minnesota, etc. There was no question they were originally domiciled in Minnesota and residents there.

However, upon both retiring from their jobs, the Sanchezes sold their home, bought an RV and planned on traveling the country for a few years. They went to South Dakota (which doesn’t have a state income tax) to get a rent-an-address mailbox, get new driver’s licenses, register their vehicles and get new license plates, register to vote, and open local bank accounts.

Then they got in their RV and off they went. They spent no time in Minnesota, and similarly spent no time in South Dakota. They were on the road traveling throughout dozens of states.

They didn’t file an income tax return in South Dakota, as South Dakota doesn’t have an income tax. And they didn’t file an income tax return in Minnesota, because they believed they weren’t Minnesota residents anymore. Ultimately, the state of Minnesota ruled otherwise and, after some escalation in the state’s court system, the Minnesota Supreme Court agreed.

The ruling was such that the Sanchezes continued to maintain domicile in Minnesota all the while, because they failed to establish domicile in any other state. Yes, they did a lot of administrative tasks in South Dakota to make it look like they were residents of South Dakota. But the court ruled those things were just that; administrative tasks. They were viewed as a nominal paper trail that didn’t show any real intent of the Sanchezes to truly integrate into South Dakota, to view it as their home they’d return to when their RV time ends, etc.

Minnesota’s definition of residency is what most states use; if you’re domiciled in the state, you’re a resident of the state. And you therefore must pay income tax in the state. Since the Sanchezes were found to still be domiciled in Minnesota, they still needed to pay income taxes in Minnesota.

Determining domicile

Alright, let’s now get into the good stuff; determining domicile.

I’m often asked what is involved in moving to a new state from a tax perspective, particularly for people with property in two different states, and often where they’re from a state with high income taxes and want to relocate to a state with low or no income taxes.

People typically think it’s as simple as buying a property and spending six months and a day in the new state. Or changing your driver’s license and voter registration to the new state. Or filing a federal tax return showing the new state as your new address (Note: this doesn’t mean much in the analysis, as the IRS doesn’t get involved in opining on whether you properly moved for purposes of changing domicile to another state. The IRS still taxes you the same at the federal level, regardless what state you’re in. The issue of state domicile is up to each state to determine. With that said, the fact that the IRS lets you file a tax return showing the other state as your new address holds negligible weight in state domicile analysis).

Each state has their own formal definition and/or determinants with regards to who’s domiciled in their state. I’ll use Connecticut as an example, as Connecticut and the Anderson case are what sparked this whole discussion in the first place.

Section 12-701(a)(1)-1 of the Regulations of Connecticut State Agencies is a very thorough example of rules and considerations people should be aware of when determining domicile. Again, each state’s rules and definitions will be a little different. Furthermore, Connecticut’s are presumably more thorough and stricter than most states, as Connecticut is one of a handful states that is known for being aggressive with enforcing domicile and related tax issues. Nonetheless, Connecticut’s domicile rules are a great example of what often goes into determining domicile.

As I mentioned before, Connecticut regulations formally define domicile as “the place which an individual intends to be his or her permanent home and to which such individual intends to return whenever absent.” This is clearly very broad and vague, as you can see.

The regulations additionally say, “A domicile once established continues until the individual moves to a new location with the bona fide intention of making his or her fixed and permanent home there.”

Additionally, the regulations say, “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 is the case even though the individual may have sold or disposed of his former home.”

This could be hugely important in some cases. Like if you sell your home and move to a new location for a new job, but perhaps it’s only a one-year contract of an assignment. And maybe you have intentions of moving back home after that year as that’s where your extended family is, where you want your teen to finish high school, where your place of worship is, where your long-time social connections are, etc. Simply selling your house and spending a year elsewhere isn’t necessarily enough to sever your domicile in your old state.

The regulations of Connecticut also say, “In determining an individual’s intention in this regard, declarations shall be given due weight, but they shall not be conclusive if they are contradicted by conduct. The fact that an individual registers and votes in one place is important but not necessarily conclusive, especially if the facts indicate that he or she did this merely to escape taxation in some other place.”

These couple of sentences really drive this whole thing home, in my opinion. They are explicitly saying that doing some basic checklist tasks in another state doesn’t alone prove intent; your actions do. And in my opinion as a non-legal professional, Anderson’s conduct - of consistently spending the most time in Connecticut compared to Florida and Arizona - is the nail in the coffin of his conduct evidencing his intentions of viewing Connecticut as his real home.

And what I find most informative about the Connecticut regulations is that they spell out an explicit 28-point checklist they use when assessing whether someone is domiciled there. Additionally, they say the list is not all-inclusive, meaning they may also take into consideration other factors. Obviously not all of these factors will apply to you if/when you move. But I nonetheless find this helpful to share, as it lets us all get inside the heads and thought processes used by at least one state in doing their domicile analysis.

The 28 factors are:

Location of domicile from prior years
Where the individual votes or is registered to vote (casting an illegal vote does not establish domicile for income tax purposes)
Status as a student
Location of employment
Classification of employment as temporary or permanent
Location of newly acquired living quarters, whether owned or rented
Present status of former living quarters; i.e. whether it was sold, offered for sale, rented or available for rent to another
Whether a Connecticut veteran’s exemptions for real or personal property tax has been claimed
Ownership of other real property
Jurisdiction in which a valid driver’s license was issued and type of license
Jurisdiction from which any professional licenses were issued
Location of the individual’s union membership
Jurisdiction from which any motor vehicle registration was issued and the actual physical location of vehicles
Whether resident or nonresident fishing or hunting licenses were purchased
Whether an income tax return has been filed, as a resident or nonresident, with Connecticut or another jurisdiction
Whether the individual has fulfilled the tax obligations required of a resident
Location of any bank accounts, especially the location of the most active checking account
Location of other transactions with financial institutions, including rental of a safe deposit box
Location of the place of worship at which the individual is a member
Location of business relationships and the place where business is transacted
Location of social, fraternal or athletic organizations or clubs, or a lodge or country club, in which the individual is a member
Address where mail is received
Percentage of time (excluding hours of employment) that the individual is physically present in Connecticut and the percentage of time (excluding hours of employment) that the individual is physically present in each jurisdiction other than Connecticut
Location of jurisdiction from which unemployment compensation benefits are received
Location of jurisdiction from which the individual or the individual’s immediate family attend classes, and whether resident or nonresident tuition was charged
Statements made to any insurance company concerning the individual’s residence, on which insurance is based
Location of most professional contacts of the individual and his or her immediate family (e.g. physicians, attorneys)
Location where pets are licensed

Bringing it all together

As you can see, determining and/or changing state domicile can be much more complicated, involved, and subjective than it appears. It’s definitely not as simple as buying a house in a new state and changing your driver’s license, voter registration and bank accounts.

In some cases, moving and adequately changing your domicile is rather straightforward. And that’s because your intention is clear and obvious, thus your related actions follow suit. For example, assume you lived in Illinois your whole life and raised your kids there. Your kids have since grown up and settled in Florida where they’ve started their own families. Further assume you’ve since retired and you want to move to Florida to be near your kids and grandkids. So you sell your house in Illinois and buy a house in Florida a few blocks from one of your kids.

In addition to buying the new house, you also change your driver’s license, auto registration, voter registration and bank accounts. You also join a new place of worship, join new social clubs, etc.

You spend over 330 days a year in Florida and travel a few weeks a year, including occasionally back to Illinois for a week or so to see some friends who still live there.

In this case, the facts clearly support your intention that you now view Florida as your true home; where you plan to return after being away.

But what if you kept your house in Illinois. And you make multiple trips a year back to Illinois where you spend just shy of six months a year (i.e. you spend at least six months and a day in Florida because someone on a YouTube video said that’s all you have to do to prove residency there). And some of your trips back are to visit your long-time doctors there. And you still actively donate to your place of worship in Illinois more than to your place of worship in Florida. And you kept your country club membership in Illinois.

Now the fact pattern isn’t looking so good for you; Illinois would have a solid case that you’ve never given up your Illinois domicile.

In closing, moving states and changing and/or establishing domicile could be a very multifaceted process that has a lot of gray area. Don’t consider this article legal or tax advice. And what I shared here isn’t exhaustive regarding what all you need to consider. But hopefully this article at least gives you a lot of things to be aware of and food for thought if you find yourself moving to a new state, especially if you plan on keeping ties to your old state.

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