On May 20, 2022, the Kansas Supreme Court ruled that a taxpayer had met his burden of demonstrating that he had changed his domicile from Kansas to Florida. If he were deemed a resident of Kansas, he would have owed over $42 million of back taxes, interest, and penalties, in part from the sale of his restaurant business.
The taxpayer considered Kansas his domicile until 2005, when he decided to retire to Florida. However, he maintained a home in Kansas with a full-time housekeeper. Under the relevant Kansas statutes, one asserting a change of domicile must show (1) a physical presence in a location other than Kansas and (2) an intention to remain in that location, either permanently or indefinitely. The plaintiff met his burden by demonstrating that he registered a vehicle in Florida, obtained a driver’s license, registered to vote, purchased a home, and other evidence that he considered Florida his permanent home.
The State argued that a spousal presumption applied and the taxpayer should be presumed to have the same domicile as his wife, i.e. Kansas. Although the taxpayer’s wife had moved with him to Florida, for the years at issue, she held herself out as a Kansas resident in order to maintain her law license and for other business purposes. However, the court noted that the relevant regulation is ambiguous and, instead, the presumption was likely overcome. The regulation states “the domicile of a person who is married shall be the same as the person’s spouse unless there is affirmative evidence to the contrary, the husband and wife are legally separated, or the marriage has been dissolved.” The court noted that this regulation is ambiguous “as to which spouse may control the other.” Thus, in the court’s view, “if one were to rely on [the husband’s] residency, rather than [his wife’s] in applying the presumption, then one could presume [his wife] was also a Florida resident.” Alternatively, the court held that he had rebutted this presumption with affirmative contrary evidence showing that his wife spent most of her time with him in Florida and also satisfied the criteria for a non-resident.