Shapiro v. State Tax Commission

[192] OPINION OF THE COURT Mikoll, J. The respondent has determined that the petitioners are liable for the taxes on income of $1,020,298 from the sale of securities abroad prior to July, 1971 on the ground that petitioner, Robert M. Shapiro, was a resident of New York State for tax purposes for the entire calendar year of 1971, as defined in section 605 of the New York Tax Law. A tax deficiency of $186,439.20 plus interest since 1971 was assessed. The petitioner lived in England for 16 years prior to his return in July, 1971 to New York State to assume the presidency of Simplicity Pattern Co., Incorporated. He was elected to the office in April, 1971. Petitioner had left New York State with all his personal possessions in 1955. He requested a transfer from Simplicity Pattern Co., Incorporated following the breakup of his marriage. The company transferred him to England where he assumed the position of managing director of Simplicity Patterns, Ltd., the wholly owned English subsidiary of his New York employer. Commencing in 1956, he worked under a contract which provided for successive annual renewals unless terminated by either party on a month’s notice before the end of the year. In 1960, he received a 10-year contract ending in April, 1970 and thereafter was employed without a written contract. While in England he procured a special visa in order to work there, which was renewable annually. In 1959, the English government waived this restriction. He leased a succession of apartments in England on long-term leases. These were furnished by him. At the time of his return to New York in 1971 some five years remained on his last lease. In 1960, he had procured a Mexican divorce from his wife. This divorce was subsequently declared void by a New York court on the ground that the plaintiff was domiciled in England when it was granted. Petitioner did not contest this allegation which constituted the basis for the voiding of the Mexican divorce. His wife subsequently secured a New York divorce. All interest in their New York home was transferred to her. He ultimately married an English citizen with whom he had a son. His son was accepted in an English primary school on petitioner’s assurance that he was in England permanently and it was his intention that his son complete the school. In 1968 he purchased a home in Folkestone, England, in his wife’s name. It was intended to be his retirement home. Meanwhile, his father-in-law lived there. Pe [193] titioner did not vote in the United States since his departure. He paid income taxes in England. During his long absence abroad he made only infrequent business trips to New York and attended two family funerals. He at all times represented that England was his home. Petitioner contends that his conduct during his long stay abroad is totally consistent with his declarations of intent to acquire an English domicile and that he has conclusively established a change of domicile from New York State to England. We agree. A change of domicile requires an intent to give up the old and take up the new, coupled with an actual acquisition of a residence in the new locality (Matter of Newcomb, 192 NY 238). The test of intent with respect to a domicile has been stated as "whether the place of habitation is the permanent home of a person, with the range of sentiment, feeling and permanent association with it.” (Matter of Bourne, 181 Misc 238, 246, affd 267 App Div 876, affd 293 NY 785.) It is established that if there are any facts or reasonable inferences from the record to support the determination of the Tax Commission, the assessment should be confirmed (Matter of Levin v Gallman, 42 NY2d 32). Respondent points to petitioner’s purchase of a property in New York State in 1968, his failure to acquire an immigration visa, his registering his son with the American Embassy, his close ties to Simplicity Pattern Co., Incorporated and his maintenance of bank accounts in New York State as indicative of a continued intention to remain a New York State domiciliary. Although such facts might justify the determination of the Tax Commission in some instances, when taken in the context of all the other facts in this case, and particularly petitioner’s continuous long stay abroad, we conclude that the determination here should be annulled. The determination should be annulled, without costs, the petition granted and the matter remitted for further proceedings not inconsistent herewith.