Chapter 5

The Progression of Residency Case Law in California

Let us go through some background information about the meaning and application of residency and domicile in California. Although these topics seem to have a very straightforward meaning, the history of the definition and enforcement of these terms have evolved over time. 

California first defined a “resident” in 1935 when it first established its revenue code. The definition of domicile was also established via the administrative code created by the Franchise Tax Board  (FTB) at this time. 

As first understood, residency was viewed as physically living in California or having a physical presence in California for at least six months. Domicile was viewed as where a taxpayer chose to have their physical home, and also required the important element of intent. There is not much decisional case law on residency or domicile, but we will discuss the primary cases below.

Over time, the concept of domicile has remained pretty consistent. The California cases of Chapman v. Superior Court of Los Angeles County, Whittell v. Franchise Tax Bd., and Noble v. Franchise Tax Bd. sum up the present case law status of domicile in California. In Whittell, the Court of Appeals for the First District held that a taxpayer may have several residences for different purposes including tax, but only one domicile. (See Whittell v. Franchise Tax Bd., 231 Cal. App. 2d 278 (1964)). 

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In Chapman, the Court of Appeals for the Second District held that domicile depends on intent, and that intent should be evaluated by someone’s actions. (See Chapman v. Superior Court of Los Angeles County,  (1958) 162 Cal. App. 2d 421, 426). In Noble, the Court of Appeals for the Second District used the two cases above and held that objective acts showing intent are to be used to determine both residency and domicile.

However, the concept of being a resident for tax purposes has been adjusted over time. Today, RTC §1704(a)(2) defines a resident as somebody who is typically domiciled in the state or who is outside the state for either temporary or transitory purposes. 

There is not much case law on residency, and it is often evaluated under administrative standards by the Franchise Tax Board. The FTB looks at principles from the statute such as the state the taxpayer has their “closest connection” as well as the “identifiable purpose” of the taxpayer’s location during the year. These concepts along with the Bragg factors listed above, serve as the best guidance on the present status of understanding residency in a legal sense.

It is important to remember that the FTB views both residency and domicile as questions of facts. At Brotman Law, we stand ready to assist you in presenting your case.

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