Failure to Abandon Domicile Has Income Tax Consequences

In Acklie v. Nebraska Department of Revenue, 313 Neb. 28 (Dec. 9, 2022), the Nebraska Supreme Court held that the owners of Crete Carrier Corp., a major U.S. trucking company, failed to abandon their domicile in Nebraska for a permanent residence in Florida. 

In 2008, Duane and Phyllis Acklie took a number of actions to demonstrate a change of residence from Nebraska to Florida. Among other things, they obtained Florida driver’s licenses, registered to vote there, became members of various organizations and were approved to obtain a homestead exemption for their Florida residence. But the Acklies also retained connections in Nebraska, where they maintained a golf club membership, kept vehicles registered in the state and made large political contributions.  In 2010, Duane executed a will in Nebraska. In 2013, Duane executed in Florida a codicil to his will, revoking and deleting all references to Nebraska and its laws and substituting Florida instead.

The Acklies challenged the Nebraska Department of Revenue’s determination that they were residents of Nebraska from 2010 through 2014. For Nebraska income tax purposes, a “resident individual” is an individual who’s domiciled in Nebraska or who maintains a permanent place of abode and spends more than six months per year in the state. To change domicile, Nebraska law requires both an intent to abandon the previous state and an intent to remain indefinitely in the new state.  

The Acklies argued that they changed their domicile to Florida in 2008, emphasizing in particular their registration as Florida voters and sworn statements of residency. The court disagreed, citing the need to consider all surrounding circumstances and relaying a presumption in favor of the original state of domicile. The court upheld the district court’s findings that the Acklies spent more time in Nebraska than in Florida each year. More important, however, was the fact that the Acklies used their Lincoln, Neb. residence as a “home base” in their travels; it being the place they departed from and returned to most frequently.