Wealthy Transplants Must Prove That Their Hearts—Not Just Their Wallets—Are in Florida
Tax season is here once again, so we’re resurfacing this 2023 story on the new generation of snowbirds.
On a recent afternoon a prominent society doyenne who splits her time between New York and Palm Beach took a look at the scene down in her winter getaway and noticed a perceptible shift in the casting.
“It used to be the typical older crowd. You know, Wilbur and Hilary Ross eating dinner in 45 minutes flat at the Mark before speeding to Teterboro to take off before the clock struck 12,” she said. Then Covid came. “People who already had Florida homes realized they were naturally spending enough time outside of New York to file as Florida residents. Plus, all these young people who came so their kids could be outdoors got them into the Benjamin School. And suddenly Sant Ambroeus at the Royal Poinciana Plaza isn’t all ladies who lunch—it’s hedge fund guys in Loro Piana quarter zips who can now work from anywhere and chose here.”
Traffic jams on private runways at 11:55 p.m. Apps that track how many days are spent where. Receipts that prove beyond a shadow of a doubt the precise time one entered the Lincoln Tunnel on the way back to Manhattan. These are the new circadian rhythms of New Yorkers turned Floridians—on tax returns, if not in spirit—and evidence of their presence is not just anecdotal. As Steve Rattner recently pointed out with one of his handy charts on MSNBC’s Morning Joe, New York has been steadily losing its share of millionaires to Florida since 2010, and if early census data, real estate prices, and even the dullest powers of observation are any indication, the trend has skyrocketed since the pandemic. That was all well and good until New York nonprofits clocked a more distressing development: With wealthy residents go their dollars, and when Museum of Modern Art stalwarts start writing checks to the Norton Museum of Art instead, more than eyebrows are raised.
“The top 1 percent of earners pay over 40 percent of New York’s income taxes, so not that many have to leave to have a significant impact on all sectors,” says Kathryn Wylde, president and CEO of Partnership for New York City, the nonprofit of choice for local business machers. Alarmed by the permanent flight of high-net-worth individuals, Wylde lobbied hard for policies that would stop the bleeding, including fighting proposed tax increases, and earned the support of some 250 business leaders, including Jamie Dimon and James Tisch.
But it’s not just the tax yields that have people scared. “New York tax collectors are so aggressive,” Wylde adds. “One CEO told me she was dinged for a single call she made on her plane at the Westchester airport just before it took off to leave the state. I’ve heard stories of people moving all their family photographs out of their New York pied-à-terre so it wasn’t deemed their primary residence. There’s a paranoia among high earners.”
The paranoia, it turns out, doubles as prudence. Spending less than 184 days a year in New York is only part of the equation for the Department of Taxation and Finance—the state also wants to make sure you are “domiciled” somewhere other than New York.
“Domicile is a subjective thing. It’s where you consider to be your true home. But because the state department of taxation can’t read minds, they look for evidence that you abandoned New York as your domicile and established it somewhere else,” says Judson Stein, a tax partner at McCarter & English (and, full disclosure, this writer’s very shrewd father). Did you have your 70th birthday party in Manhattan or Palm Beach? Did you go to the Mercedes dealership in Port Washington or Fort Lauderdale? Did you give to the Metropolitan Opera or the Kravis Center for the Performing Arts in West Palm?
“The first thing I ask clients who tell me they want to claim Florida residency is, ‘Do you like Florida? Because you actually have to build a life there.’ ” And while your anniversary fete at the Carlyle or your spot on the Southampton Hospital summer party host committee may seem irrelevant, it may eventually be of interest to the more than 300 auditors who focus on the moves of the one percent. “When a high-net-worth individual claims non-residency in New York yet keeps some New York ties, it warrants a second look,” Stein says. “And the New York State Department of Taxation gives it one.”
Changing your driver’s license is one thing; having to alter the causes you have long supported, the activities that have defined your life as a New Yorker—it’s a tough pill to swallow (even if it can save you seven figures annually). There are those, of course, who are loud and proud about their new Floridian identities, like Citadel boss Ken Griffin, a loyal fan of Governor Ron DeSantis, whose January second-term inauguration party, not coincidentally, was catered by Greenwich Village Italian joint Carbone. (Incidentally, Carbone’s owner, Major Food Group, has opened nine locations in Florida in the last two years.) Griffin’s exodus from Chicago to Palm Beach has his former city’s philanthropic community agog. Illinois’s former wealthiest resident has already moved many of his masterpieces—a Rothko, a de Kooning, a Lichtenstein, and a Pollock among them—from the Art Institute of Chicago to the Norton and donated $8 million to the Cox Science Center and Aquarium in West Palm.
“We’re not sort of in, we’re all in,” Griffin, who pals around Palm Beach with fellow transplants Paul Tudor Jones and former Illinois governor Bruce Rauner, told an interviewer recently about moving his life and business to Florida. Others are more conflicted. “We have plenty of supporters who are moving to Florida to fiscally protect themselves who would be mortified if it came out that they were siphoning their philanthropic dollars away from New York and into Florida,” says a director at a New York museum. “They still want to identify as New Yorkers.” His donors usually manage to stay involved but, he noted, one who recently became a Florida resident declined a board seat due to the optics of taking on such a clearly New York–based position.
“Look, part of it is just that people who have moved are not physically in New York as much to attend fundraisers, so they organically end up supporting less there,” says public relations executive Susan Magrino, who counts herself among those who have found themselves spending a majority of their time at their Palm Beach homes since 2020. Savvier institutions bring their fundraising efforts south in the winter, and top auction houses and galleries set up shop in Palm Beach after Covid hit. “The increase in our donors who live in Florida motivated us to clone our most popular New York programs for the Palm Beach audience,” says Louise Mirrer, president and CEO of the New-York Historical Society.
That sort of outreach doesn’t threaten Ghislain d’Humières, who stepped into good fortune when he arrived as the new director of the Norton two years ago, in the midst of this snowbird surge. “We had a huge increase in donors, particularly young ones, which for me was a dream,” he says. “We had people coming to us, unsolicited, wanting to give millions. They weren’t affiliated with the Norton before, but they arrived as sophisticated donors who understand why we need an endowment.” He has nearly tripled the number of donors in the Norton’s highest giving bracket.
“If you’re calling Florida your residence, it behooves you to be there as much as possible,” says the society doyenne. “You want to support the local charities, you want to support the local hospital. But yes,” she adds in reference to those pesky auditors, “it also doesn’t hurt to be photographed at their fundraisers.”
This story appears in the March 2023 issue of Town & Country. SUBSCRIBE NOW
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