## Facts

- William and Joy Pratt were domiciled in Idaho beginning in July 1987 and remained Idaho domiciliaries until some time in 1991.
- William Pratt worked for a bank in Boise, Idaho, until his employment ended on May 3, 1991.
- On May 3, 1991, William received a termination check for $63,450.
- The Pratts intended to move from Idaho to Clarkston, Washington.
- In March 1991, the Pratts traveled to Clarkston to look for housing but did not find a place to live.
- In April 1991, the Pratts located housing in Clarkston, but it was not available for lease until June 1, 1991.
- The Pratts moved to Clarkston on May 31, 1991.
- When the Pratts received the May 3, 1991 termination check, they resided in Boise, their vehicles were registered in Idaho, and each held an Idaho driver’s license.
- Idaho law required part-year Idaho residents to pay Idaho income tax on taxable income from all sources received during the portion of the year they were domiciled in Idaho.
- On their 1991 return, the Pratts treated the May 3, 1991 termination payment as received as nonresidents and did not include it in Idaho taxable income.
- The Idaho State Tax Commission concluded the Pratts were still domiciled in Idaho on May 3, 1991 and assessed additional Idaho income tax and interest.
- On judicial review, a magistrate held the Pratts had not met their burden to prove their domicile changed by May 3, 1991, noting the record lacked evidence showing when their intent to become Washington residents was to take effect.
- The district court affirmed, and the Pratts appealed to the Idaho Supreme Court.

## Issues

1. Whether the Pratts proved they changed their domicile from Idaho to Washington before May 3, 1991, so the termination payment was received while they were Washington domiciliaries and not taxable by Idaho as income received during Idaho domicile.
2. Whether the Pratts’ April 1991 trip to Washington and stated intent to relocate created a genuine dispute on domicile sufficient to overturn the Tax Commission’s assessment.

## Decision

- The Idaho Supreme Court affirmed the district court’s decision affirming the magistrate.
- The court held the Pratts remained domiciled in Idaho on May 3, 1991.
- Because the termination check was received while the Pratts were Idaho domiciliaries, Idaho could tax the payment under its part-year resident rules, and the assessment of tax and interest was upheld.

## Legal Principles

- Idaho taxes part-year residents on taxable income from all sources received during the part of the year the taxpayer is domiciled in Idaho.
- A change of domicile requires a concurrence of: (1) intent to abandon the current domicile, (2) intent to acquire a specific new domicile, and (3) physical presence in the new domicile.
- The existing domicile continues until a new domicile is established under the required elements.
- The party asserting a change of domicile bears the burden of proving the change and fixing when it occurred.
- Preparations to move, a temporary visit to the proposed new state, or an intent to relocate at a later date do not, without more, establish that domicile changed as of an earlier date—especially when objective ties (such as residence, driver’s licenses, and vehicle registration) remain in the former state at the time income is received.

## Conclusion

The Idaho Supreme Court upheld the Tax Commission’s tax and interest assessment because the Pratts did not prove that, by May 3, 1991, they had both the required intent and physical presence in Washington to complete a change of domicile; they were still living in Boise with Idaho indicia of domicile when the termination check was paid, making the payment taxable by Idaho as income received during Idaho domicile.


Pratt v. State Tax Commission, 920 P.2d 400 (1996)