The Persona (The "Hero"):
Jason moved from NYC to Miami to save $60,000 in taxes after his fintech firm went remote.
Jason, a Senior Software Architect at a Series C Fintech. Jason is a classic high-earner in the "Tech Nomad" era. With a total compensation package exceeding $450k—heavily weighted in RSUs—he realized that living in a high-tax jurisdiction like New York City was costing him nearly $60,000 a year just for the privilege of the zip code. When his company went "Remote-First," Jason saw his exit. He signed a lease in Miami, traded his winter coat for linen shirts, and prepared to enjoy a 13% effective pay raise by eliminating NY State and NYC local taxes.
The Challenge (The "Villain"):
Jason's $35,000 tax nightmare highlights how keeping a New York apartment while living in Florida can trigger aggressive residency audits.
The "Statutory Resident" Trap and the Ghost of Manhattan. The villain in this story isn't a person; it’s the New York Department of Taxation and Finance, arguably the most aggressive audit body in the United States.
Jason made a critical mistake: he kept his West Village apartment "just in case" the Florida experiment failed. He figured as long as he wasn't there, he wouldn't owe taxes. He was wrong. New York law states that if you maintain a "permanent place of abode" in the state and spend more than 183 days (or even parts of days) there, you are a Statutory Resident.
Six months into his Florida life, Jason received a "Notice of Routine Inquiry." New York was looking at his credit card swipes, his cell phone towers, and his NYC apartment's utility bills. They claimed he hadn't truly moved his "Domicile" (his permanent home) and owed New York taxes on all of his income—including his Florida-earned salary and his recently vested RSUs.
The Panic: New York was coming for $35,000 in back taxes, interest, and penalties.
The Analysis (The "Insight"):
Rally saved Jason from a $38,500 tax bill by proving his "center of gravity" shifted to Miami despite his NYC lease.
When Jason approached Rally, he was prepared to give up and pay. He thought his NYC apartment lease was a "smoking gun" that proved he was still a New Yorker.
Rally’s analysis focused on the two-pronged attack New York uses: Domicile vs. Statutory Residency. 1. The Domicile Test: We had to prove Jason’s "center of gravity" had shifted. New York uses the "Teddy Bear Test"—essentially asking, "Where are the items you hold most dear?" 2. The 183-Day Rule: We needed to prove Jason was physically outside of New York for the vast majority of the year with undeniable, granular data.
The Rally Residency Audit Map:
Audit Exposure: $35,000 + 10% penalty.
Weak Point: Sustained utility usage at the NYC apartment.
Strong Point: Jason’s dog, his primary workstation, and his primary vehicle were all in Miami.
The Solution (The "Action"):
Rally won the residency audit by using detailed life-change documentation, location metadata, and abode classification to prove the client's permanent move to Florida.
Rally didn't just file an appeal; we built a Residency Audit Defense File—a 150-page digital fortress that left the auditors with no room to maneuver.
Step 1: The "Teddy Bear" Evidence We helped Jason document the movement of his life. We gathered moving receipts, but more importantly, we documented "life changes":
Healthcare Migration: We showed the termination of his NYC primary care doctor and the onboarding of a new physician in Miami.
Social Connectivity: We pulled records of his Miami gym membership (and his NYC gym cancellation) and even his voter registration and new Florida driver's license.
The "Near and Dear" List: We helped Jason catalog the physical transit of his high-value items (his expensive espresso machine and his workstation) from NY to FL.
Step 2: The Location Data Reconstruction The auditors claimed Jason spent "significant time" in NY. Rally used Jason's Google Maps Timeline, Uber receipts, and credit card metadata to create a day-by-day calendar.
We proved Jason spent only 42 days in New York (visiting friends and the corporate office) and 210 days in Florida, with the remainder traveling internationally.
We cross-referenced "Manhattan swipes" (like a coffee shop) with "Miami swipes" 24 hours later to show clear transit patterns.
Step 3: Defining the NYC Abode We argued that the NYC apartment was not a "Permanent Place of Abode" but a secondary, temporary landing pad for work trips, which—combined with the clear shift in Domicile—negated the Statutory Residency claim.
The Result (The "Win"):
By establishing a Florida "center of gravity" through Rally Defense, Jason successfully defeated a NY audit to save $35,000 and shield all future income from New York taxes.
The New York State auditor reviewed the Rally Defense File. Faced with a day-by-day location log and clear evidence that Jason’s "life" was now anchored in Miami, the state dropped the inquiry.
Tax Saved: $35,000 in New York State and City taxes.
Future Savings: By establishing a "Clean Break" date with Rally’s help, Jason is now shielded from future NY audits as long as he maintains his Miami "center of gravity."
The Relief: Jason kept his 13% raise and can now vest his future RSUs with $0 in New York tax liability.
Are you planning a move to a zero-tax state? Don't leave your RSU/ISO wealth at the mercy of an auditor.
Frequently Asked Questions
1. If I move to Florida but keep my NYC apartment for visits, am I still taxed as a New Yorker?
It depends on how many days you spend there. Under the Statutory Residency rule, if you maintain a "permanent place of abode" in NY and spend more than 183 days (even partial days) in the state, NY considers you a resident for tax purposes. However, even if you spend fewer than 183 days there, you must still prove your Domicile has changed—meaning Florida is now your true, permanent home—to avoid paying NY tax on your worldwide income.
2. What exactly is the "Teddy Bear Test"?
This is the informal name for how auditors determine Domicile. They look at where your "near and dear" items are located. This includes family heirlooms, pets, expensive art, or even your favorite high-end espresso machine. If your "valuable life" is still in a West Village apartment while you’re living in a furnished rental in Miami, an auditor will argue you never truly intended to leave New York.
3. I moved mid-year. How are my RSUs taxed?
This is a major pain point for tech employees. New York and California use allocation formulas. If you were granted RSUs while working in NYC but they vest after you move to Florida, NY will claim a portion of that income based on the number of days you worked in NY from the grant date to the vesting date.
Note: Rally helps you calculate this "Allocation Ratio" precisely so you don't overpay.
4. Does New York really track my cell phone and credit card data?
Yes. In a formal residency audit, the Department of Taxation and Finance can subpoena cell tower records to see where your phone "pinged" and request detailed credit card statements. If you claim to be in Miami but your credit card shows a daily 9:00 AM purchase at a bodega in Manhattan, your residency claim will be denied.
