California residency determinations have evolved significantly over the past two decades. In 2003, the State Board of Equalization's Appeal of Bragg (2003-SBE-002) established what became known as the "Bragg factors" - a fairly comprehensive list of 19 considerations for determining residency status. While thorough, this framework provided no explicit guidance on how to weight these factors against one another, leaving that critical determination to the discretion of individual auditors and administrative law judges.
In 2020, the Office of Tax Appeals introduced a more structured approach in Appeal of Mazer (2020-OTA-263P), organizing the Bragg factors into three distinct categories. This framework has since been applied in subsequent precedential decisions, including Appeal of Beckwith (2022-OTA-332P) and others. The three-category approach doesn't eliminate any of the original Bragg factors, but rather provides an organizational structure that may reveal how these factors should be weighted against one another.
The Three Categories
The Mazer framework groups the 19 Bragg factors into three categories:
1. Registrations and Filings with a State or Other Agency This includes items like homeowner's property tax exemption, automobile registration, driver's license, voter registration and participation history, and the address used and state of residence claimed on federal and state tax returns.
2. Personal and Professional Associations This category encompasses the state of the taxpayer's employment, children's school, bank and savings accounts, memberships in churches or social organizations, professional services (doctors, dentists, accountants, attorneys), business interests, professional licenses, and ownership of investment real property.
3. Physical Presence and Property This includes location and values of residential real property, where the taxpayer's spouse and children reside, telephone records showing origination points of calls, origination points of checking account and credit card transactions, and the number and purpose of days spent in California versus other states.
The OTA Weighs in on Weighting and a Logical Framework Emerges
The Appeal of Bracamonte (2021-OTA-156P) notes an established principle regarding how these categories should be weighted, stating that "physical presence is a factor of greater significance than mental intent and the formalities that tie one to a particular state." This suggests that the three categories are not equally weighted, with physical presence carrying the most weight.
If we accept that physical presence is the most important factor but follow the established principle that it is not alone determinative of residency, we can derive a logical framework for how these three categories interact.
Physical presence plus preponderance of evidence in one other category should result in a finding for that state. If a taxpayer demonstrates they were physically present primarily in their new state AND has the preponderance of either their registrations/filings or their personal/professional associations pointing to that state, they should logically prevail in establishing their residency there. The opposite cannot be true - if a single category could outweigh physical presence combined with another category, then physical presence would not be the most important factor.
Further, we can infer that the preponderance of evidence in the other two categories combined can outweigh physical presence alone. If both registrations/filings and personal/professional associations predominantly point to California, a taxpayer can be found to be a California resident even with limited physical presence in the state. This is not merely theoretical - it's exactly how the temporary or transitory purpose doctrine operates in practice.
Why This Framework Makes Sense
This weighted framework aligns with well-established residency concepts. The Franchise Tax Board has successfully assessed individuals as California residents despite those individuals spending years physically residing in another state or country. The argument: their absence from California was temporary or transitory because all their connections - their registrations, their professional associations, their family ties - remained anchored in California.
From the state's perspective, this makes practical sense. Physical presence can be circumstantial and may not reflect true intent or permanent ties. Someone might spend 200 days in Nevada for business reasons while maintaining their real home, their family, their doctors, their accountants, and their professional licenses all in California. The preponderance of evidence in the registrations/filings and personal/professional associations categories would overwhelm their physical presence in Nevada.
Conversely, significant physical presence in California doesn't automatically mean residency if the preponderance of evidence in the other two categories points elsewhere. If you've established clear documentation in both your registrations/filings and your personal/professional associations pointing to your new state, those two categories together can outweigh even substantial California physical presence.
It's worth noting that while the three-category framework provides better structure than analyzing 19 separate unweighted factors, some ambiguity remains regarding how contradictory factors within a single category should be weighed against each other. The framework reduces uncertainty but doesn't eliminate it entirely.
Practical Implications
Understanding this framework has significant implications for both residency planning and audit defense. For those planning a move out of California, the goal should be establishing clear preponderance of evidence in at least two of the three categories - ideally all three. For those facing audits, understanding how the categories interact can help focus your documentation and arguments on the factors that matter most.
The evolution from Bragg's 19 factors to this three-category framework with implied weighting represents meaningful progress in understanding how California evaluates residency. While administrative law judges still exercise discretion, this framework provides a more structured foundation for that analysis.