A New York State Administrative Law Judge has held that an individual who retired as chief financial officer of Colgate-Palmolive headquartered in New York City in order to immediately move to Paris to be with his wife, a French domiciliary with whom he rekindled a relationship after more than 40 years apart, was no longer a New York City domiciliary. Matter of Stephen C. Patrick, et al., DTA Nos. 826838 and 826839 (N.Y.S. Div. of Tax App., June 15, 2017).

Mr. Patrick was for many years a Connecticut domiciliary. Following his separation and eventual divorce from his first wife, he had briefly moved to and acquired an apartment in New York City, where he held a demanding executive position as CFO of Colgate-Palmolive. After he searched for and located his childhood girlfriend, who was now living in Paris, they decided to marry. Their initial plan was for Mr. Patrick to divide his time between New York and Paris, where his wife lived. However, it soon became apparent that they did not want to be apart for extended periods, and he decided to retire early from his executive position at Colgate-Palmolive at considerable financial cost. He flew to Paris the very next day after his retirement in 2011. He thereafter filed New York State nonresident returns, but the Department took the position that he remained a New York City domiciliary and assessed New York State and City income tax on that basis. A hearing followed, at which Mr. and Mrs. Patrick each testified in considerable detail.

The ALJ held that Mr. Patrick became a Paris domiciliary following his retirement and move to Paris to live with his wife. The ALJ based his decision largely on Mr. Patrick's "credible" and "unequivocal" testimony that following his retirement and move to Paris, Mr. Patrick thereafter considered Paris, where he purchased a home to live with his wife, to be his true home. Among other things, Mr. Patrick paid French taxes as a resident, and obtained the French equivalent of a Green Card. He retained no business ties to New York City, notwithstanding his service on the board of directors of a corporation that occasionally met in New York. None of his adult children lived in the New York metropolitan area.

Mr. Patrick did, however, retain a New York City apartment, and continued to spend considerable time in New York City, much of which was for treatment of a serious medical condition. The ALJ held that this did not negate his clear intent to make Paris his home. Therefore, the ALJ found that Mr. Patrick was no longer a New York City domiciliary and could not be taxed as a New York State and City resident.

The taxpayer was represented by Craig B. Fields, Irwin M. Slomka, and Kara M. Kraman of Morrison & Foerster LLP.