You make $1 Billion. You Flee to Florida. Then the Tax Man Comes Knocking.

IMG_3376For more than a decade, Paul Tudor Jones’s home in the Belle Haven district of Greenwich, Connecticut, hosted one of the most elaborate Christmas light shows on the East Coast. Each December, cars snaked through the secluded area, occupants craning necks to get a peek at light-sculpture angels, wise men, and stars as they burst onto the lawn of his Monticello-inspired mansion. Christmas music was even piped into the local FM radio station, including a rendition of “Oh Come All Ye Faithful” by Jones’s daughter Caroline, an aspiring country singer-songwriter.

Given the extravagant holiday tradition, it might be hard to argue that Greenwich is not where Jones’s heart lies — often a key element in determining whether one is domiciled in a state, and therefore must pay its income taxes. So, much to the chagrin of his Christmas display spectators, after Jones bought a $71 million home in Palm Beach, Florida, in 2015 and was seeking nonresidency tax status in Connecticut, he canceled the light show.

Whether or not Jones is required to pay Connecticut income taxes is not, as many people assume, just a question of being in the state for less than half of the year—or no more than 183 days. That in itself requires a taxpayer to keep copious records and serves to meet a “statutory” residency requirement. But nonresidents can also be required to prove that their so-called domicile has changed as well–and that’s where it gets messy. In New York, which other states tend to follow, the nonresidency tax audit guidelines are so obtuse that they take up 128 pages of explanation.

For the full story of the billionaires who’ve fled to Florida to escape the high-tax locales of New York, Connecticut and New Jersey–and how the taxman makes sure it’s legit–please read my story in Institutional Investor.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s