Massachusetts taxes all estates exceeding $1 million. Florida and most other states do not. While a recent case involved New York state income taxes rather than estate taxes, a crucial element was location of the taxpayer's dog played in important role in the case of Matter of Blatt.
Gregory Blatt grew up in Massachusetts, but moved to New York for law school at Columbia. He stayed there and became very successful, becoming general counsel of Barry Diller's InterActive Corp. Subsequently, Diller asked him to run Match.com which was located in Dallas and Blatt at first spent his time traveling between Dallas and New York. But in 2009, Blatt moved his dog to Dallas saying in an email to a friend, "Dog is the final step that I haven't been able to come to grips with until now. So, Big D is my new home." He subsequently sold his apartment in New York and registered to vote in Dallas.
Then Diller decided he no longer wanted to be CEO of IAC and convinced Blatt to take on the role. In mid-2011 Blatt moved back to New York.
The question was whether Blatt owed New York state and city income taxes for 2009 and 2010. The tax authorities said yes. Blatt appealed.
On appeal to the State of New York Division of Tax Appeals, the administrative law judge agreed with Blatt that he was not domiciled in New York during 2009 and 2010 and cancelled a tax deficiency notice that had been issued to him for those two years. While the location of the dog was just one factor in the decision, it was a factor. We have a new corollary to the saying, "your home is where your heart is." Your home is where your dog is, which may be the same thing.
While this decision is related to New York state and city income taxes, it's relevant for any taxes. In Massachusetts, which has the lowest threshold for estate taxation in the country at $1 million, the location of the decedent's pets may be a telling factor in determining whether she died domiciled in Massachusetts or in another state with no estate tax.
Interestingly, Blatt seemed to be happier running Match.com and its related dating sites than all of IAC. He's been back running the Match Group since 2013.