C288160; C288161; C294634; C294635

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COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

BARRY S. & ELAINE G. WILLIAMS v. COMMISSIONER OF REVENUE

Docket Nos. C288160, C288161
C294634, C294635 Promulgated:
June 24, 2009

These are appeals under the formal procedure, pursuant to G.L. c. 58A, § 7 and G.L. c. 62C, § 39, from the refusal of the appellee, the Commissioner of Revenue ("Commissioner" or "appellee"), to abate personal income taxes for tax years 2002, 2003, 2004 and 2005.
Chairman Hammond heard these appeals. Commissioners Scharaffa, Egan, Rose, and Mulhern joined him in the decision for the appellee in docket number C288160 (tax year 2002) and in the decision for the appellants in docket numbers C288161, C294634 and C294635 (tax years 2003, 2004, 2005).
These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

Peter L. Paull, Esq. for the appellants.

Celine E. Jackson, Esq. and John J. Connors, Jr., Esq. for the appellee.

FINDINGS OF FACT AND REPORT
On the basis of the Statement of Agreed Facts and exhibits and testimony offered into evidence at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact.
On April 5, 2003, the appellants timely filed a joint Massachusetts Nonresident/Part-Year Resident Tax Return ("Form 1-NR/PY") for the tax year 2002, claiming part-year resident status from January 1, 2002 through April 30, 2002 and reporting a Massachusetts income tax due of $6,541.00. On March 6, 2004, the appellants timely filed a Form 1-NR/PY for the tax year 2003, claiming non-resident status for the entire year and reporting no Massachusetts income tax due. On February 8, 2006, the Commissioner issued a Notice of Intent to Assess ("NIA") to the appellants proposing to assesses $23,087.00 of income tax plus interest for the tax years 2002 and 2003.
The appellants executed a Special Consent Extending the Time for Assessment of Taxes on March 7, 2006. On March 15, 2006, the appellants filed a DR-1-Appeals Form requesting a conference pursuant to G.L. c. 62C, § 26(b). A conference was held on April 12, 2006, between the appellants and a representative of the Commissioner. By letter dated June 21, 2006, the Commissioner determined that the appellants were subject to a Massachusetts resident income tax for tax years 2002 and 2003. On July 11, 2006, the Commissioner issued a Notice of Assessment ("NOA") to the appellants in the amount of $28,113.91 of income tax and interest for tax years 2002 and 2003.
On September 11, 2006, the appellants filed their Applications for Abatement for the tax years 2002 and 2003 with the Commissioner. On February 22, 2007, the Commissioner issued to the appellants a Notice of Abatement Determination denying their requests for abatement for the tax years 2002 and 2003. On April 19, 2007, the appellants timely filed their Petition Under Formal Procedure for tax years 2002 and 2003 with the Board.
For the tax year 2004, the appellants filed Form 1-NR/PY claiming non-resident status for the entire year and reporting no Massachusetts income tax due. For the tax year 2005, the appellants also filed Form 1-NR/PY claiming non-resident status for the entire year and reported no Massachusetts income tax due. On May 12, 2007, the Commissioner issued an NIA to the appellants proposing to assess $13,129 of income plus interest for tax years 2004 and 2005.
On June 16, 2007, the Commissioner received a duly executed Special Consent Extending the Time for Assessment of Taxes for tax years 2004 and 2005. On the same date, the Commissioner also received a DR-1-Appeals Form signed by the appellants requesting a conference pursuant to G.L. c. 62C, § 26(b). Subsequent to the conference, on December 21, 2007, the Commissioner issued an NIA to the appellants for the tax years 2004 and 2005. Subsequently, on January 3, 2008, the Commissioner issued an NOA to the appellants in the amount of $17,375.74 of income tax and interest for tax years 2004 and 2005.
The appellants filed their Applications for Abatement for tax years 2004 and 2005 on January 30, 2008. On March 1, 2008, the Commissioner issued to the appellants a Notice of Abatement Determination denying their request for an abatement for tax years 2004 and 2005. On April 30, 2008, the appellants seasonably appealed the Commissioner's denial of the abatement applications for tax years 2004 and 2005 by mailing Petitions Under Formal Procedure, which the Board received on May 1, 2008.
On the basis of these facts, the Board found that it had jurisdiction to hear and decide these appeals.
Appellants Barry and Elaine Williams both testified at the hearing of these appeals and the Board found their testimony to be credible. Both of the appellants were born in Massachusetts. After meeting in New Bedford and marrying, the appellants built a home at 15 Oak Street, Acushnet, where they resided from 1966 until 2002. On May 22, 2002, the appellants purchased a home at 140 Creek Drive, Port Charlotte, Florida. Mrs. Williams testified that the purchase price of the home was between $390,000 and $400,000. In addition to the two homes, the appellants owned two investment properties in Massachusetts, which they acquired from their parents, and a ski chalet in New Hampshire. The appellants testified that they spend approximately six months in Florida, five months in Massachusetts and one month in New Hampshire.
After the purchase of the Florida property, the appellants returned to their home in Massachusetts where they remained until sometime in October of 2002, only visiting Florida for a few weeks in the summer.
Mr. Williams is a Massachusetts licensed master electrician. He retired from Commonwealth Electric in 1998. He then worked part-time as a wire inspector for the Town of Acushnet. Mr. Williams performed inspections in the spring, summer and fall of 2002. Mr. Williams did not work during tax years 2003, 2004 and 2005.
Mrs. Williams is a Massachusetts licensed registered nurse and social worker. Sometime in 2002, Mrs. Williams obtained a Florida nursing license. For each of the tax years at issue, Mrs. Williams entered into a seasonal contract with St. Joseph's Bon Secours Hospital in Port Charlotte, Florida ("St. Joseph's Hospital"), to work from November to May. According to the appellants' 2002 Federal income tax return, Mrs. Williams received wages from the University of Massachusetts, Boston, Massachusetts; the Old Colony Regional Vocational Technical High School, Rochester, Massachusetts; and St. Joseph's Hospital. For tax years 2003 through 2005, Mrs. Williams received wages only from St. Joseph's Hospital.
On October 29, 2002, having returned to Massachusetts for doctors' appointments, Mr. Williams voted in the Acushnet local town meeting election and, on November 5, 2002, he voted in the Massachusetts state election. Mrs. Williams registered to vote in Florida in November 2002. As of January 1, 2003, the appellants were no longer listed on the Town of Acushnet Residents List. There were no town or state elections in 2003. On April 13, 2004, Mr. Williams registered to vote in Florida. Both appellants voted in the November 2, 2004 General Election in Florida.
Mrs. Williams obtained a Florida driver's license in November 2002. On January 2, 2003, the appellants purchased a 1991 Ford automobile which they registered in Florida. On November 12, 2003, the appellants purchased a 2002 Ford automobile which they also registered in Florida. During the tax years at issue, the appellants also owned a 14-year-old truck, an 18-year-old Cutlass automobile, a recreational vehicle, and a motorcycle. The appellants used these older vehicles when they spent time in Massachusetts and traveled to New Hampshire. The vehicles were garaged in Massachusetts and therefore registered in Massachusetts.
The appellants also owned two boats during the tax years at issue. Both boats were registered in Massachusetts. The smaller boat was transported back and forth between Massachusetts and Florida. The larger boat, however, remained in Massachusetts. Mr. Williams is a lifetime member of the Low Tide Yacht Club in New Bedford where he grew up.
After obtaining the Florida driver's license and registering to vote in Florida, Mrs. Williams filed a Florida homestead effective for tax year 2003, in which she stated, under the pains and penalties of perjury, that the appellants were permanent residents of, and domiciled in, Florida.
During the tax years at issue, the appellants maintained bank accounts in both Florida and Massachusetts. The Florida account was opened in the latter part of 2002. All of Mrs. William's wages from St. Joseph's Hospital were directly deposited into the Florida bank. According to a review of the appellants' credit card statements for tax year 2002, the majority of purchases occurred in Massachusetts.
The appellants testified that they spend approximately six months in Florida, five months in Massachusetts and one month in New Hampshire each year. Although the appellants' daughters and grandchildren reside in Massachusetts, Mrs. Williams also has a brother and sister who reside in Florida. Mrs. Williams testified that she is a member of St. Charles Borromeo Church in Port Charlotte, Florida, and that when she is in Massachusetts, she attends one of three churches.
Mr. Williams has three doctors in Port Charlotte, Florida. The appellants are members of the Buena Vista Association in their Florida neighborhood and Mr. Williams is a Director of the Buena Vista Association in Florida. Mr. Williams also attends the Florida Elks and Moose lodges with friends. Mr. Williams has a non-resident Massachusetts fishing license and a resident Florida fishing license. Mr. Williams testified that the appellants have built up a circle of friends in Florida. The appellants' wills were prepared in 1995 and list the appellants' address as Acushnet, Massachusetts. Since their move to Florida, however, the appellants have contacted Florida counsel to update their estate planning and reflect their change of domicile.
Based on its subsidiary findings, the Board further found that the appellants remained domiciled in Massachusetts for tax year 2002. Although the appellants purchased a home in Florida in May 2002, they did not, at that time, move there with the intent to remain for an indefinite period of time. To the contrary, after the purchase of the Florida property, the appellants returned to Massachusetts where Mr. Williams continued to work for the town of Acushnet throughout the spring, summer and fall of 2002. After travelling to Florida sometime in October 2002, Mr. Williams yet again returned to Massachusetts on October 29, 2002 for doctors' appointments and also to vote in the local and state elections. Mr. Williams returned to Florida and both appellants traveled back to Massachusetts to spend the Christmas holidays with their daughters who live in Massachusetts.
However, the Board further found that by January 2003, the appellants had changed their domicile to Florida. At that time, the appellants began to develop their economic, social and civic life in Florida. For each of tax years 2003, 2004 and 2005, Mrs. Williams entered into employment contracts with St. Joseph's Hospital in Florida where she agreed to work for a six-month period from November to April. Mrs. Williams also became a member of a local church. The appellants registered to vote in Florida and did so in the 2004 General Election. The appellants both became members of the Buena Vista Association in Florida and also attended the Moose and Elks lodges in Florida with friends. Mr. Williams obtained a resident Florida fishing license. During the tax years at issue, the appellants traveled to Massachusetts for approximately five months of the year to spend time with their daughters but always with the intention to return to their home in Florida.
Accordingly, the Board issued a decision for the appellee in docket number C288160 for tax year 2002 and issued a decision for the appellants in docket numbers C288161, C294634, C294635, granting abatements for fiscal years 2003, 2004 and 2005 in the amounts of $5,894, $5,175, and $17,954, respectively.

OPINION
Pursuant to G.L. c. 62, § 2, Massachusetts residents are taxed on all of their income from whatever source derived. In contrast, Massachusetts taxes nonresidents only on income from Massachusetts sources. G.L. c. 62, § 5A. A resident is defined as "any natural person domiciled in the Commonwealth." G.L. c. 62, § 1(f).
Although a person may have residences in more than one state, a person can have only one domicile for tax purposes. Reiersen v. Commissioner of Revenue, 26 Mass. App. Ct. 124, 128-29 (1988). Domicile has been defined as "the place of actual residence with intention to remain permanently or for an indefinite time and without any certain purpose to return to a former place of abode." McMahon v. McMahon, 31 Mass. App. Ct. 504, 505 (1991). "Although where a person is domiciled is primarily a question of fact, [citation omitted] the elements to be considered in locating a domicile present a question of law." Reiersen at 124-25. The most persuasive indicators of domicile are the physical, business, social and civic activities of the taxpayer. See Id. at 131.
A change of domicile occurs "when a person . . . is physically present in the place and intends to make that place his home for the time at least; the fact and intent must concur." Reiersen, 26 Mass. App. Ct. at 125 (citing Hershkoff v. Board of Registered Voters of Worcester, 366 Mass. 570, 577 (1974)). Moreover, "[i]t is a general rule that the burden of showing a change of domicil is upon the party asserting the change." Horvitz v. Commissioner of Revenue, 51 Mass. App. Ct. 386, 394 (2001) (citing Mellon Nat'l Bank & Trust Co. v. Comm'r of Corporations and Taxation, 327 Mass. 631, 638 (1951)). See also Commonwealth v. Davis, 284 Mass. 41, 49 (1933) ("The burden of proof that his domicil was changed rested on the defendant because he is the one who asserted that such change had taken place.")
The appellants were both born in Massachusetts and were domiciled here for most of their adult lives. On May 22, 2002, the appellants purchased a home in Port Charlotte, Florida. The appellants argued that, for Massachusetts income tax purposes, their domicile changed at that time. Because the appellants are claiming that their domicile had changed in 2002, they have the burden of proving the change in domicile. Based on the evidence presented, the Board found that the appellants failed to meet their burden of proving a change in their domicile for tax year 2002, but met their burden of proving that they had changed their domicile to Florida for tax years 2003 through 2005.
The appellants testified that subsequent to their purchase of the Florida property, they returned to their home in Massachusetts until the fall of 2002, only travelling to Florida for a few weeks in the summer. During that time, Mr. Williams continued to work as a wire inspector for the town of Acushnet. The appellants then traveled back to Florida in October of 2002. On October 29, 2002 Mr. Williams again returned to Massachusetts for doctors' appointments and, while here, voted in both local and state elections. Mr. Williams returned to Florida and both appellants traveled back to Massachusetts to spend the Christmas holidays with their daughters who live in Massachusetts. Therefore, the Board found that although the appellants traveled to Florida periodically throughout 2002, Massachusetts remained the center of the appellants' social and civic lives at that time. The touchstone of domicile is "'the place where a person dwells and which is the center of his domestic, social and civic life.'" Reiersen, 26 Mass. App. Ct. at 125.
Beginning in January 2003, however, the appellants transitioned the center of their lives to Florida. For each of tax years 2003, 2004 and 2005, Mrs. Williams entered into six-month contracts at St. Joseph's Hospital, working from November through May. Neither she, nor Mr. Williams worked in Massachusetts during or after 2003. In the late part of 2002, Mrs. Williams had registered to vote in Florida, obtained a Florida driver's license and also recorded a Florida homestead effective for tax year 2003. Mrs. Williams attended church regularly at St. Charles Borromeo in Port Charlotte. The appellants became members of the neighborhood Buena Vista Association in their Florida neighborhood, and Mr. Williams was appointed Director. The appellants developed a large circle of friends and attended the local Elks and Moose lodges in Florida with friends. During tax years 2003 and 2004, the appellants registered two vehicles in Florida. In 2004, the appellants voted in the General Election in Florida.
The Commissioner argued that the appellants' continuing ties to Massachusetts, including their children and grandchildren, their home in Acushnet and their investment properties, support a finding that the appellants had not changed their domicile. The Board found that an "appellant's continuing ties to [Massachusetts] do not foreclose a finding of change of domicile: such change does not require that a taxpayer divest himself of all remaining links to the former place of abode, or stay away from that place entirely." Horvitz v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports, 2002-252, 259 (decision on remand, citing Gordon v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1988-367, 375).
On this basis, the Board found that the appellants were domiciled in Massachusetts during tax year 2002. The Board further found that the appellants were domiciled in Florida for tax years 2003, 2004 and 2005. Accordingly, the Board entered a decision for the appellee in docket number C288160, tax year 2002, and a decision for the appellants in docket numbers C288161, C294634 and C294635, and issued abatements for tax years 2003, 2004 and 2005 in the amounts of $5,894, $5,175, and $17,954, respectively.

APPELLATE TAX BOARD

By: _____ ____
Thomas W. Hammond, Jr., Chairman

A true copy,

Attest: ______ _____
Clerk of the Board

 Where, as here, the petitions are filed after the applicable due date, G.L. c. 58A, § 7 provides in pertinent part that "the date of the United States postmark, or other substantiating mark . . . shall be deemed to be the date of delivery."  The envelope containing the Petitions for tax years 2004 and 2005 was postmarked April 30, 2008, the last day for appealing the Commissioner's March 1, 2008 denial.


ATB 2009-629

Barry S. & Elaine G. Williams v. Commissioner of Revenue (June 24, 2009)

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