Appeal of Bragg

Appeal of Bragg (2003-SBE-002): How California Determines Residency for Tax Purposes

What This Case Is About:

In Appeal of Bragg (2003-SBE-002), the California State Board of Equalization addressed whether a taxpayer, Stephen D. Bragg, had successfully changed his residency from California to another state (Arizona) for income tax purposes. Although Bragg claimed to have relocated, the Board found that he still had strong and consistent ties to California, meaning he was still a resident under California law and subject to state income tax.

This case remains one of the most cited residency decisions in California tax law and introduced what are now known as the “Bragg Factors”—19 key factors the state uses to determine whether a person has truly left California or is still a resident.

Key Takeaways from the Bragg Decision

Burden of Proof

The taxpayer has the burden of proving that they have changed their domicile and that their presence in California is only “temporary or transitory.” Simply owning property or spending time out of state is not enough.

The 19 Bragg Factors

These are the 19 factors used by the Board to evaluate whether a taxpayer is still a California resident. No single factor is controlling—the state evaluates the totality of your circumstances.

1. Homeowner’s Property Tax Exemption
   • Did the taxpayer claim the California homeowner’s exemption, indicating a primary residence?
2. Automobile Registration
   • Where are the taxpayer’s vehicles registered?
3. Driver’s License
   • Which state issued the taxpayer’s driver’s license?
4. Voter Registration and Voting Participation
   • Where is the taxpayer registered to vote, and where have they actually voted?
5. Tax Return Filings
   • What address is listed on state and federal tax returns, and which state does the taxpayer claim as their residence?
6. Employment
   • Where does the taxpayer work? Are they employed or running a business in California?
7. School Attendance by Children
   • Where do the taxpayer’s children go to school? Enrollment in California schools is a strong residency indicator.
8. Bank Accounts
   • Where are the taxpayer’s bank and financial accounts located?
9. Memberships
   • What social, religious, and professional organizations is the taxpayer a member of, and where are they located?
10. Professional Services
    • Where does the taxpayer receive services like medical, legal, or dental care?
11. Business Interests
    • Does the taxpayer own or manage businesses or investment property in California?
12. Affidavits from Third Parties
    • What do people close to the taxpayer say about their residence and ties?
13. Residential Property Ownership and Use
    • Where does the taxpayer own property? Where is it used as a primary residence?
14. Spouse and Children’s Residence
    • Where do the taxpayer’s spouse and children primarily live?
15. Telephone Records
    • Where do most of the taxpayer’s phone calls originate or end?
16. Credit Card and Bank Transaction Locations
    • Where are most of the taxpayer’s financial transactions taking place?
17. Time Spent in California vs. Other States
    • How many days per year does the taxpayer spend inside versus outside California?
18. Purpose of Time Spent in California
    • Are the visits to California for temporary reasons (e.g., vacation), or for ongoing obligations like business or family?
19. Intent Shown Through Actions
    • Do the taxpayer’s actions (not just their words) show a clear intent to abandon California as their primary home?

Outcome of the Bragg Case

The Board found that Mr. Bragg had not taken sufficient steps to cut his ties with California. Despite having a residence in Arizona, he continued to maintain multiple homes and business interests in California, spent significant time in the state, and did not adequately demonstrate intent to permanently relocate.

He was therefore found to still be a California resident and liable for California state income taxes.

Why This Case Matters

If you’re moving out of California to reduce your tax burden, the Bragg case is a cautionary tale. California aggressively audits high-net-worth individuals and business owners claiming non-residency. The FTB will evaluate all aspects of your lifestyle to determine if your move is real—or just on paper.

Need Help Proving You’re No Longer a California Resident?

Our firm specializes in California residency and domicile planning. Whether you’re preparing to relocate or are under audit, we can help you build a strong case based on the Bragg Factors and ensure you avoid costly mistakes.

Contact us today to schedule a consultation.