Those moving to Puerto Rico to avail themselves of the tremendous tax benefits of Puerto Rico Act 22 (now Act 60) are all too familiar with the bona fide residency test. In preparation for an IRS residency audit, they know the three prevailing tests: the Physical Presence Test, the Tax Home Test, and the Closer Connection Test. But state residency audits are also prevalent in domestic moves; that is, state audits where taxpayer move from high tax states to low or no tax states. They too must meet residency requirements and state residency audits are on the uptick. Taxpayers seeking to change state residency will need to consider two tests: domicile and statutory residency. Domicile is a question of “intent”. That is, where does the taxpayer intend to live on a regular and permanent basis. The most important factor to establish intent is true substance (over form) — a taxpayer must establish a real and true connection and life in their new state; it should rise above a minimalist connection to life in the new state. Factors that help reflect intent include time, location of family, personal valuables, vehicle registration, voter registration, real property ownership, driver’s license, and social, civil and church connections. To prove intent, be prepared to show such evidence of permanency in the new state. The statutory residency test is a matter of days… literally. It is driven by having more than 183 days of presence in a state with a permanent place of abode. Bank statements, EZ Pass tolls, car rentals, cell phones records, and the like can be used to show actual presence in a particular state.