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Paul and Nancy Jacobs



In July 2000, the Taxpayers filed an amended 1998 New Mexico personal income tax return seeking a refund of income tax withheld from compensation paid to the Taxpayers during tax year 1998. The Department denied the refund and the Taxpayers protested, contending that they changed their residence and domicile from New Mexico to Texas in mid-1998. Based on this assertion, they filed their 1998 New Mexico return as nonresidents and allocated all of their 1998 income to Texas. Held:  The Taxpayers’ desire to move to Texas was never coupled with the actions necessary to abandon their domicile in New Mexico and establish a new domicile in Texas.  The Taxpayers were domiciled in and residents of New Mexico on December 31, 1998.  The Taxpayers were required to allocate all compensation to New Mexico on their 1998 PIT-1 return.  Protest denied.