Taxes and domicile: Which state can tax you may depend on your dog's home

·Reporter

Mon, February 6, 2023, 2:28 AM GMT+9·4 min read

Which state gets to tax your income may come down to where your dog lives if you relocated. That's what it took for Gregory Blatt, the former CEO of Match.com.

New York claimed Blatt owed $430,065 in income taxes, plus interest and a penalty, for 2009 and 2010, after he took the position. While the company was headquartered in Dallas, Blatt first remained in the Big Apple and traveled to Texas when needed. But eventually he moved to Dallas, leasing an apartment there, buying a Porsche, and dating in the area.

But New York disagreed. The state viewed Blatt's connection with Manhattan and the fact he still had an apartment in the city as proof that he remained domiciled in the state.

"All the facts were 50-50. They fell on a knife's edge," Edvin Givargis, a certified public accountant and state and local tax partner at SAX LLP, told Yahoo Finance. "The deciding factor that caused the tribunal to rule in the taxpayer's favor was the fact that he took his dog with him.”

According to court documents, Blatt testified that moving his cherished senior-rescue dog was at first difficult due to its size, advanced age, and the Dallas' humidity and extreme heat. The fact that he eventually relocated the dog to be with him satisfied the "near and dear" rule to establish his domicile in Texas.

Golden Retriever at Home, sitting in the beautiful big garden of the big mansion house where she lives.

(Photo: Getty Creative)

Blatt’s case — while unique — could be more pertinent after three years of the pandemic and the rise of work-from-home opened up where people could live and earn money — especially as state residency rules stayed the same.

"It is basically the same residency law — it is very old. In most states, it's about 100 years old," Givargis said. "COVID didn't change anything."

And as people relocate to low-tax states like Texas, Florida, and Tennessee, higher-cost states like New York and California can aggressively chase after former residents for taxes long after taxpayers have moved out and on. (These are some of the states that have also sought double taxation on remote workers.)