Massachusetts finally gets some tax revenue out of an Amazon purchase
The Supreme Judicial Court ruled today a former executive at an Amazon subsidiary owes the state more than $320,000 - and interest - on Amazon stock he bought and then sold while living in the Back Bay.
Kenneth Dotson, originally a Florida resident, had argued he didn't owe the money on the $5.3 million he made selling the stock because he never intended to stay in Massachusetts and was in the process of moving to Florida.
The court, noting that Dotson had bought a condo in the Back Bay, had his mail delivered there, got a landline phone there, joined a local gym and obtained a subscription to an unnamed Boston newspaper, said he was most definitely a Massachusetts resident when he executed the options and sold the stock. Even though he was in the process of fleeing the state, he had not yet actually taken up residence again in Florida, the court said.
According to the ruling, Dotson was living in Florida when he accepted a job as senior vice president at PlanetAll, a Cambridge-based online calendaring concern. Before he came up, though, the company was acquired by Amazon, which had a history of moving its acquisitions to Seattle. Dotson had no interest in moving there, and decided not to take the job.
However, he changed his mind when Amazon CEO Jeff Bezos called and told him Amazon would be keeping PlanetAll in the Boston area - but just Amazon changed course and did move PlanetAll to Seattle, he'd be remunerated for his trouble.
Sure enough, Amazon changed its mind a couple months after Dotson moved into his new $480,000 Back Bay condo, and sure enough, he decided to quit. Amazon agreed to immediately vest his stock options, and he sold them and then moved to Florida. The court wrote:
Dotson's Massachusetts domicil would continue presumptively until and unless Dotson proved its change. To achieve an abatement, he would have to establish the evacuation from Massachusetts to Florida as of the receipt of the disputed income on January 22, 1999. The evidence did show that by that date he had decided to return to Florida, and had made an offer to purchase a residence in the Fort Lauderdale area.
However, he continued to reside in his Boston condominium until March 7, 1999. He did not complete the purchase of the Florida residence and move into it until March 10. A completed change of domicil demands the concurrence of both physical presence and the requisite state of mind. ... The seller of Dotson's eventual new home did not accept his offer until February 4. Dotson did not close the purchase until March 10. Consequently, he remained a domiciliary of Massachusetts on January 22, 1999. Substantial evidence supported a finding of Massachusetts domicil at the time of receipt of the disputed income.