Part-time Florida couple must pay Bay State taxes

Residency is always a tricky issues. There are lots of factors to it and if you are contemplating a residency change, it is often helpful to check with an attorney before you do. There could be good and some not so good implications to your estate plan depending on which state.

Stock sale’s timing key to board’s ruling
The Boston Globe
By Todd Wallack
April 6, 2010

Warning to snowbirds: It takes more than a pair of winter homes in Florida to escape the long arm of Bay State tax collectors.

The Massachusetts Appellate Tax Board ruled late last week that the chairman of Timberland Co., Sidney W. Swartz, and his wife owe more than $890,000 in Massachusetts taxes and interest after selling millions of dollars in Timberland stock in 2004, even though they claimed to be Florida residents. Sidney retired as chief executive from Timberland, the trendy outfitter based in Stratham, N.H., in 1998, but remains chairman of the company.

Sidney and Judith Swartz, who spent most of their lives in Massachusetts, owned both a five-bedroom oceanside home in Marblehead and a condo in Brookline at the time of the stock sales. The couple also owned both a six-bedroom oceanside house in Delray Beach, Fla., and a condo near a country club in Boca West, Fla.

The Swartzes argued before the tax board that they had become Florida residents before they sold the stock, in late October and early November 2004. They said they spent less than half the year in Massachusetts — typi cally during the warmer months from May to October and lived in Florida the rest of the year.

But the tax board ruled they were still technically Bay State residents when they cashed in their Timberland stock.

For instance, when the couple bought the Brookline condo on Oct. 13, 2004, to be closer to their children and grandchildren, the deed said they were from Marblehead. And while Sidney Swartz changed his voter registration to Florida on Oct. 14, a few weeks before the stock sales, Judith voted in Marblehead with an absentee ballot in November 2004 and didn’t change her registration to Florida until December 2004.

In addition, the Swartzes continued to use their Marblehead address for many key documents, including their Florida real estate tax bill. And they didn’t obtain Florida driver’s licenses until Dec. 27, 2004, two months after the stock sales.

The board said in its ruling that it found the Swartzes “business and personal financial ties were stronger to Massachusetts than in Florida.’’

Judith Swartz declined to comment.