Residence vs. Domicile
Each State can, and does, establish its own "domicile" requirements. As a general rule, "residence" is treated as the place at which you are temporarily located. Also, as a general rule, "domicile" is treated as the place to which you intend to permanently return. We frequently use these terms interchangeably, but they are significantly different legal terms. Think of the difference in these terms: You may own a house in Ohio and another in Florida, but it is in one, or the other, that you think of the place that you will always return. It is the place where most of your life revolves around.
In all instances, your "domicile" is where you intend it to be. Problems arise, however when each of two, or more, different States want to treat you as having a domicile in their respective State. Why? So that they may tax you, your income, or your assets, or collect more in user fees from you. In order to determine if you are "domiciled" within the State of Ohio, or Florida, each State, (as has the other 48 States) enacted laws to help determine where you really intended your domicile to be.
The starting place in determining where you are "domiciled" is where you say that you are "domiciled." Believe it or not, the taxing authorities in Ohio or Florida, however, do not necessarily believe what you say. They therefore look to your actions, rather than your words. Actions are viewed in two different means: 1) a statutory test, and 2) by a preponderance of the evidence.
The Statutory Tests:
Ohio in ORC section 5747.24 has outlined its rule on determining "domicile." This Statute is located within the statutes for determining income tax liability, but is frequently cited and used in most other areas that require a determination of domicile, as well. Basically, the statute says that if you spend one hundred and eighty-three "contact periods" in Ohio, then you are presumed to be Ohio domiciled. If you have fewer than one hundred and eighty-three and maintain a residence outside of Ohio, you can create an irrebuttable presumption against Ohio residency by filing an a form to the Ohio tax commissioner to that effect.
In Florida, in its Code section 222.17 has set forth its primary method of determining "domicile" by filing a Declaration of Domicile form with the County Clerk of Court, in the county in which you reside that declares Florida to be your domicile ( The Declaration of Domicile is NOT the application for homestead exemption for property tax purposes). Many other statutes refer to this Code section, such as for motor vehicle licenses, or education costs, among others. Separately, Florida in its Code section 198.015 for Estate Tax purposes has determined: "For the purposes of this chapter, every person shall be presumed to have died a resident and not a nonresident of the state: (a) If such person has dwelt or lodged in the state during and for the greater part of any period of 12 consecutive months in the 24 months next preceding death, ..."
There is a statutory presumption that if your are physically located within Florida for six (6) months and one (1) day, then you are presumed to be a Florida resident.
The Preponderance of the Evidence Test:
This test is often times described in the following question:" Where do you intend to have your domicile?". This is also called the "facts and circumstance" test. This means that by looking at all of your actions, where do the facts and circumstances of your actions show that you intended to make your domicile. For Florida, the most important factor is whether or not you filed the "Declaration of Domicile." For Ohio, the most important factor is where you spent your time. If the time element can not be satisfied, then you must rely on all of the other facts and circumstance.
As I think that you can see, the issue tends to be how to stop having Ohio treat you as domiciled in Ohio, and NOT how to have Florida start treating you as domiciled in Florida. You do need to be aware that it is possible to have both States treat you as domiciled in their respective State, and therefore be subject to taxation in both States. Although this is not common, it is possible.
What do you do to change your domicile to Florida, and not have Ohio treat your domicile as being in Ohio?
- New residents are encouraged to apply for a Florida driver’s license within thirty (30) days of moving to the state. The State requires that you obtain a Florida driver’s license within thirty (30) days of gaining employment, enrolling children into school, registering to vote, or filing for the homestead exemption. Some counties will require both a driving test and an eye exam. Other counties will only require the eye exam if you hold a valid driver’s license in another state at the time that you register for a Florida driver’s license. You will need to provide identification in the form of a Social Security card, birth certificate, valid out-of-state driver’s license, voter registration card, or vehicle registration.
- New residents must register their automobiles within thirty (30) days of establishing residence in Florida. Proof of ownership must be shown.
- New residents must obtain No-fault insurance (P.I.P.) On all private passanger vehicles licensed in Florida, and on those of non-residents in the state for more than ninety (90) days.
- Florida residents that own real estate qualify for a homestead exemption on the first $25,000 of value of their home for property tax purposes. The homestead exemption also imposes a cap on the amount of future increases in the "assessed value" for purposes of calculating future tax increases. Taxpayers must file between January 2 and March 1 with County Property Appraiser. This is different form the Declaration of Domicile filed with the Clerk of Courts.
- Florida does not impose State of local income taxes. The State does not impose a individual Intangible Personal Property Tax.
- Boats used in Florida must be registered in Florida at the County Tax Collector’s office, unless the boat has a valid out-of state registration and are located within Florida for less than ninety (90) days.
- To qualify for statewide resident hunting or fishing licenses, you must have resided continuously for six (6) months within Florida.
- Ohio based health insurance carriers frequently require that you change to a Florida based health insurance carrier. Health insurance premiums in south Florida are generally higher than in Ohio.
The fact that Florida recognizes you as a resident, does not necessarily mean that other States may not still try to recognize you as a resident of that other State for it’s own purposes; usually tax related. For example, you may have "moved" to Florida, and then started reporting significant earned income, or taken withdrawals from an IRA or pension, or passed away. Your prior home State may still attempt to classify you as a resident of that State for purposes of their income tax or inheritance/estate tax. Whether or not you are a resident of Florida, or of some other State, becomes a question of where you intended to be your domicile. This become a facts and circumstances type of test. The more contacts that you have with Florida in your daily life, then the clearer is your intent that Florida be your residence. Other indicia of intent includes the following: (and, this is not an exhaustive list)
- File a Declaration of Domicile in the county in which you reside. This is done in the local Clerk of Courts office in the county courthouse. This can be done at anytime during the year.
- Update your Last Wills and Testaments, Trusts, Powers of Attorney, Living Will Declaration and other legal documents to reflect that Florida is now your domicile.
- Obtain a Florida driver’s license.
- Register your cars in Florida, and obtain Florida license plates.
- Register your boat(s) located within Florida, in Florida.
- File your Federal Income Tax Returns in the Atlanta office of the IRS, identifying Florida as your residence.
- File your Florida Intangible Personal Property Tax Return.
- If you own real estate, apply for your homestead exemption for real estate tax purposes. This must be done after January 2 and before March 1.
- Join the local branch of any social or service clubs of which you are a member.
- Register with your local (Florida) church or synagogue.
- Find a local (Florida) doctor, dentist, and make sure that your primary and/or secondary medical insurance is consistent with your Florida residency.
- Find a local (Florida) veterinarian, if you have a pet.
- Open a local (Florida) checking/banking account, and automatic deposits and payments should be from this account.
- Obtain credit cards and/or check cashing cards for the stores that you frequent in Florida.
- Watch your travel patterns, especially with frequent flyer programs. Where are the flights booked from? Where does the frequent flyer program indicate as your home airport?
It is important to note that you do not need to do each and every one of these actions in order to be treated as Florida domiciled. However, when you are relying on a "facts and circumstances" test, the more factors that point to a Florida domicile, the better.