Many Americans fed up with steep state income taxes are packing their bags for tax-friendlier destinations like Florida, Nevada, Tennessee, or Wyoming. While the move might make financial sense, it’s not as simple as changing your address and calling it a day.

Thanks to the 2017 tax law, which capped state and local tax deductions at $10,000, more people have been motivated to ditch high-tax states such as New York, California, New Jersey, and Connecticut. But these states aren’t letting go of their taxpayers easily. In response to the exodus, they’ve stepped up residency audits in an effort to keep collecting income taxes from former residents.

What Actually Makes You a Resident?

Many people assume that buying a home in a low-tax state automatically severs ties with their previous state of residence. But that’s not how it works—especially in the eyes of tax authorities.

Let’s say a couple moves from New York to Florida but returns to New York every summer to visit family. Or a former New Jersey resident buys a retirement home in South Carolina but still spends time at a vacation house in upstate New York. In either case, the original state might claim that these individuals are still technically residents—and therefore still owe income taxes.

How States Decide If You Still “Live” There

To determine whether you’re still a resident for tax purposes, states like New York look at more than just where you get your mail. They apply two key tests: the statutory residency test and the domicile test.

• Statutory Residency Test (New York):

  • Did you maintain a “permanent place of abode” in New York for more than 11 months?

  • Did you spend more than 183 days in New York during the year?

New Jersey and Connecticut follow similar rules, typically using one full year to define a “permanent abode.”

• Domicile Test (New York):
  Tax auditors will examine several lifestyle and personal factors to determine your true home base, such as:

  • Is your out-of-state home larger and more valuable than the one in New York?

  • Where are your most prized possessions?

  • Where do your children go to school?

  • Where do your family and close relatives (like grandchildren) live?

The Burden Is on You

Importantly, the responsibility to prove a change in residency lies with you—not the state. Simply owning a condo in Florida won’t cut it. You’ll need clear, consistent evidence that you genuinely moved.

That means keeping detailed records of how many days you spend in each state. Phone GPS records, credit card receipts, and even calendar entries can all serve as proof. State tax agencies can even subpoena your cell phone records to confirm your location on specific dates.

The Odds Are Against High Earners

High-income individuals are prime targets for residency audits—and most don’t win. Consider these facts from the New York State Department of Taxation:

• Over the last five years, New York has conducted more than 3,000 residency audits annually on high-income individuals.

• The average audit recovered about $140,000 per taxpayer.

• In total, these audits have reclaimed $1 billion in lost tax revenue.

• Nearly every wealthy person who changed domicile was audited.

Moving to a low-tax state might save you money, but it comes with strings attached. If you’re planning a move, consult a tax advisor and make sure you have the documentation to prove where you truly live. Otherwise, your tax bill might end up following you—no matter where you go.