Abu Dhabi, UAETuesday 12 November 2019

Donald Trump switches residence from New York to sunny, tax-free Florida

US president says he has been treated very badly by politicians in the city where he was raised

President Donald Trump has changed his place of domicile from New York to Florida. AP Photo
President Donald Trump has changed his place of domicile from New York to Florida. AP Photo

President Donald Trump, a lifelong New Yorker, has changed his primary residence to Florida, a move that could benefit his re-election campaign – and his tax bill.

The president said in a declaration of domicile filed in Palm Beach County, Florida, that he has become a “bona fide resident of the State of Florida residing at” his Mar-a-Lago resort in Palm Beach.

He confirmed that filing in a series of tweets on Thursday night, adding, “I cherish New York, and the people of New York, and always will, but unfortunately, despite the fact that I pay millions of dollars in city, state and local taxes each year, I have been treated very badly by the political leaders of both the city and state.”

In the document, dated September 27, Mr Trump said that “I formerly resided at 721 Fifth Avenue” in New York, the address of Trump Tower.

He listed “other places of abode as” 1600 Pennsylvania Avenue NW in Washington – the White House – and his golf resort in Bedminster, New Jersey.

First Lady Melania Trump also changed her state residence to Florida, in a document dated October 3.

Mr Trump’s move was first reported by the New York Times on Thursday. If motivated by tax considerations, it would bolster a point that his political foes have been making for months: his tax overhaul is hurting Democratic-led, high-tax states by prompting the wealthiest residents to move elsewhere. Governor Andrew Cuomo, a Democrat, has called the change “economic civil war”.

“Good riddance, it’s not like Mr Trump paid taxes here anyway,” Mr Cuomo, a Democrat, said in a statement on Thursday night. “He’s all yours, Florida.”

The president, who grew up in Queens and rose to fame as a real estate developer in Manhattan, remains deeply unpopular with voters in his hometown. He lost the heavily Democratic state in 2016, but narrowly won Florida, which remains under Republican control.

Florida will be contested in next year’s election, and becoming a resident of the state could help Mr Trump’s campaign there.

Mr Cuomo and New York City Mayor Bill di Blasio, although rivals, are both longtime Trump critics. And State Attorney General Letitia James has been pursuing a legal case that would allow the US House Ways and Means Committee to see the president’s state tax returns. The state passed a law in July that would allow the panel to ask for the returns.

In any event, Mr Trump could see large tax savings from a residency switch to Florida. New York State and city impose a combined individual income tax rate of nearly 12.7 per cent for top earners. Florida officials have long enticed wealthy people from the north-east with promises of warm sunshine – and zero state income taxes.

The financial hit of state income taxes increased following Mr Trump’s 2017 tax overhaul, which limited the federal deduction for state and local taxes to $10,000 (Dh36,700). The deduction was previously unlimited, allowing some top earners to take deductions worth millions of dollars.

Another New Yorker, the billionaire Carl Icahn is planning to move his home and business to Florida to avoid the Empire State’s higher taxes next year.

New York does not make it easy to leave, however. The state's department of taxation and finance will go to great lengths to keep wealthy residents on their tax lists. New York considers people residents if they maintain a residence there for at least 11 months of the year and spend at least 184 days in the state.

The states’ methods can be aggressive: issuing subpoenas to pore through credit card statements, bank transactions or phone records to track a taxpayer’s location, and sending auditors to interview doormen or confirm doctors’ appointments.

The law in the District of Columbia says that elected officials who work in Washington should claim their home state for tax purposes.

Mr Trump concluded his Thursday night Twitter posts with a farewell to his now-former city and state: “I will always be there to help New York and the great people of New York. It will always have a special place in my heart!”

Updated: November 1, 2019 12:47 PM

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