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                               Nebraska Supreme Court Advance Sheets
                                        308 Nebraska Reports
                                        HOUGHTON v. NEBRASKA DEPT. OF REV.
                                                Cite as 

308 Neb. 188



                           Thomas and Pamela Houghton, husband and
                            wife, appellants, v. Nebraska Department
                               of Revenue, an agency of the State
                                  of Nebraska, and Tony Fulton,
                                   Tax Commissioner, appellees.
                                                     ___ N.W.2d ___

                                          Filed January 15, 2021.   No. S-20-176.

                 1. Administrative Law: Judgments: Appeal and Error. In an appeal
                    under the Administrative Procedure Act, an appellate court may reverse,
                    vacate, or modify the judgment of the district court for errors appearing
                    on the record.
                 2. ____: ____: ____. When reviewing an order of a district court under
                    the Administrative Procedure Act for errors appearing on the record, the
                    inquiry is whether the decision conforms to the law, is supported by com-
                    petent evidence, and is neither arbitrary, capricious, nor unreasonable.
                 3. Domicile: Intent. To acquire a domicile by choice, there must be both
                    (1) residence through bodily presence in the new locality and (2) an
                    intention to remain there.
                 4. Domicile. All of the surrounding circumstances and the conduct
                    of the person must be taken into consideration to determine his or
                    her domicile.
                 5. Domicile: Intent. To change domicile, there must be an intention to
                    abandon the old domicile.
                 6. ____: ____. To establish a new domicile, the present intention must be
                    to remain indefinitely at a location or site or to make a location or site
                    the person’s permanent or fixed home.
                 7. Judgments: Appeal and Error. In conducting a review for errors
                    appearing on the record, an appellate court will not substitute its factual
                    findings for those of the district court where competent evidence sup-
                    ports those findings.
                 8. Intent: Proof: Circumstantial Evidence. Intent is a question of fact,
                    which may be determined by circumstantial evidence.
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                HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

 9. Domicile. Where a person’s move is to a foreign country, the nature
    of the visa under which admission is granted is an essential inquiry in
    determining the person’s domicile.
10. Domicile: Intent. An individual’s subjective intent is not dispositive of
    domicile if a limited visa of the foreign country is intended to restrict
    his or her intent, for an intent inconsistent with law is unrealistic and
    insufficient to establish a domicile.

  Appeal from the District Court for Lancaster County:
Andrew R. Jacobsen, Judge. Affirmed.

  David S. Houghton, of Houghton, Bradford & Whitted, P.C.,
L.L.O., for appellants.

   Douglas J. Peterson, Attorney General, and L. Jay Bartel
for appellees.

  Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.

   Cassel, J.
                      INTRODUCTION
   This Administrative Procedure Act appeal centers on whether
income taxpayers abandoned their domicile in Nebraska and
acquired a domicile in the United Kingdom (U.K.). The Tax
Commissioner and the district court concluded that the taxpay-
ers did not meet their burden of proof. Although the move to
a foreign country presents an additional, unusual circumstance,
our standard of review drives the outcome. Because competent
evidence supported the district court’s factual findings, we
affirm its judgment.

                       BACKGROUND
                 Nebraska Department of
                    Revenue Proceedings
  In February 2016, the Department of Revenue issued to
Thomas and Pamela Houghton a notice of proposed deficiency
determination for individual income tax for tax years 2012 to
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                 HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

2014. Together, the notices identified the total amount of taxes,
interest, and penalties due as $73,477.61.
   The Houghtons protested the income tax deficiency determi-
nation and requested a redetermination that no money was due.
They claimed that the U.K. was their domicile.
   The Houghtons sought to challenge the constitutionality
and validity of a Nebraska regulation. The regulation stated,
in relevant part, that “[a]ny citizen residing outside the United
States (U.S.) whose last domicile within the U.S. was within
Nebraska will continue to be a Nebraska resident until the
person . . . establishes residence as a permanent resident alien
in a foreign country . . . .” 1 The Tax Commissioner declined
to determine the validity of the regulation or to apply it. The
district court likewise did not apply the regulation. During oral
argument to this court, counsel for the Department of Revenue
asserted that the regulation should not be relied upon here, and
we have not done so.
   In 2018, a hearing was held on the Houghtons’ petition
for redetermination of individual income tax. The evidence
consisted of testimony by both of the Houghtons and an audit
supervisor of the Department of Revenue, and documents sub-
mitted by the parties. The evidence established that Thomas
has been in the “payments processing business” since 1987. He
worked for ACI Worldwide until 1997 and again from October
2000 to December 2011. The Houghtons lived in Nebraska
for most of Thomas’ employment with ACI Worldwide. But
on two occasions—from January 1990 to March 1992 and
from December 2000 to October 2004—they lived in the U.K.
During the latter stay, the Houghtons “were headed towards
citizenship when the company requested that [Thomas] move
back to the U.S.”
   Between 2008 and 2011, while residing in Nebraska, the
Houghtons discussed living in the U.K. They decided that
if they moved back to the U.K. for a third time, they would
1
    316 Neb. Admin. Code, ch. 22, § 001.03A (2009).
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                 HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

stay and become citizens. There is no dispute that the
Houghtons were domiciled in Nebraska prior to moving to the
U.K. in 2011.
   In October 2011, Thomas accepted employment with a U.K.
company. The position was permanent rather than an assign-
ment. They moved to the U.K. in December. Pamela testified
that although it was their third time living in the U.K., “[t]his
time it was not as an expat, it was a legitimate job [Thomas]
was taking for long term.”
   In 2012, Thomas received compensation from ACI
Worldwide related to his employment in Nebraska through
December 2011. The Houghtons, who have continued to
employ an accountant in Nebraska to prepare their federal
and state income tax returns, filed a “Special Capital Gains/
Extraordinary Dividend Election and Computation” form with
their 2012 Nebraska tax return. On that form, Thomas signed
beneath the following statement: “I hereby elect to receive the
special capital gains/extraordinary dividend treatment provided
under Neb. Rev. Stat. § 77-2715.09, and declare under penal-
ties of perjury that to the best of my knowledge and belief, the
capital stock described above qualifies for the special capital
gains/extraordinary dividend election.” That statute allows an
election by a “resident individual.” 2
   The Nebraska income tax returns that the Houghtons filed
for tax years 2012 to 2014 listed their address in the U.K. They
computed Nebraska tax using the schedule for nonresidents and
partial-year residents. The Houghtons were taxed as residents
of the U.K. during the tax years at issue. They used a U.K.
accountant in connection with their U.K. income tax.
   When the Houghtons left Nebraska in December 2011, they
retained ownership of two properties in Nebraska. One, pur-
chased in 2004, served as their primary residence until they
moved to the U.K. The other, purchased in June 2011, was
purchased with the intent that it be an investment property.
2
    See Neb. Rev. Stat. § 77-2715.09(1) (Reissue 2018).
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308 Neb. 188

Both were listed as rental property after the Houghtons moved
to the U.K. Thomas explained that at the time of the 2011 pur-
chase, the market was down, which made it a good time to buy
but not a good time to sell. The Houghtons sold both Nebraska
properties in 2017. Thomas testified that the markets made it
“a good time to sell.” The Houghtons also owned real estate in
Georgia and California.
   The Houghtons did not own property in the U.K. Thomas
characterized purchasing property in the U.K. as “compli-
cated.” He elaborated that a purchase of property is generally
on a 99-year lease—which is not attractive—and that free-
holds are difficult to find. Further, moving capital from the
United States into the U.K. is considered a “taxing event” by
the U.K.
   In March 2011, Thomas sought work permission from the
U.K., including a dependency endorsement for Pamela. The
Houghtons obtained a “Tier 2” general visa with a validity date
from July 2011 to August 2014. In April 2014, the Houghtons
received an extension of the Tier 2 general visa with an expira-
tion date of August 2017. In May 2016, the Houghtons applied
for indefinite leave to remain (ILR), which was granted in
June. Thomas testified that a person has to live in the U.K. for
5 years before seeking ILR. Once a person obtains ILR status,
he or she can live in the U.K. for life. After ILR is granted, a
person must wait 12 months before applying to become a U.K.
citizen. The Houghtons complied, and they were sworn in as
British citizens in February 2018.
   An individual seeking to become a U.K. citizen is allowed
to be out of the country for 450 days during a 5-year win-
dow. The Houghtons began keeping a log of all of their travel
“immediately from the time that [they] went over there with
the intent of becoming naturalized citizens.” The record con-
tains a “schedule of absences,” which Thomas testified is
part of the submission for ILR and for naturalization. The
document showed each of the Houghtons’ absences from the
U.K. from 2011 to May 2016, along with the reason for travel
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             HOUGHTON v. NEBRASKA DEPT. OF REV.
                     Cite as 

308 Neb. 188

and the number of days involved for each event. The schedule
of absences showed that the Houghtons returned to Nebraska
a number of times during 2012 through 2014, spending as
many as 40 days in 2012 and as few as 14 days in 2014. The
visits were typically family related.
   During the relevant tax years, Thomas possessed driver’s
licenses in Nebraska, California, and the U.K. His Nebraska
license expired in 2015, and he did not take any action to
renew it. The Houghtons “used the Overseas Voting Act”
to vote in the 2012 federal presidential election. When they
moved from Nebraska, they resigned from their country club
and sold their only vehicle. In the U.K., the Houghtons joined
a country club and purchased two vehicles. They took all items
of sentimental value with them to the U.K. They do not have
any Nebraska bank or financial accounts, but they have check-
ing and savings accounts in the U.K.

                      Tax Commissioner’s
                         Determination
   The Tax Commissioner determined that the Houghtons
failed to sustain their burden of proof. He relied on Nebraska
case law concerning domicile. The Tax Commissioner stated
that the Houghtons’ “right to remain within the [U.K.] had
an expiration date” and that because they “did not have the
right to remain in [the U.K.] beyond the expiration of their
restricted work visas[,] there could not have been an intention
to stay beyond that point.” The Tax Commissioner determined
that the Houghtons did not abandon their Nebraska domi-
cile until they established permanent residency in the U.K.
in 2016.
   The Tax Commissioner noted two additional facts. One,
the Houghtons’ retention of their Nebraska real estate until
they obtained ILR status, which led the Tax Commissioner
to remark that if they were “forced to return to the United
States their former residence would serve as a ‘soft landing
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             HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

spot.’” The other was Thomas’ sworn statement of Nebraska
resident individual status in connection with the special cap-
ital gains election in 2012.

               District Court Proceedings
   The Houghtons filed a petition on appeal. They requested
that the Tax Commissioner’s decision be set aside. They also
sought a determination that they were not subject to additional
income taxation, interest, and penalties for tax years 2012
to 2014.

                  District Court’s Judgment
   The district court affirmed the Tax Commissioner’s determi-
nation. The court also relied on Nebraska case law setting forth
how one acquires a domicile by choice.
   The district court determined that the additional facts
noted in the Tax Commissioner’s order supported the Tax
Commissioner’s finding. With regard to the Houghtons’ reten-
tion of their former Nebraska home, the court stated that it
deferred to the Tax Commissioner’s judgment as to credibility
when it found that such retention supported the conclusion
that the Houghtons did not abandon their Nebraska domicile
until after they established permanent residency in the U.K.
The court also agreed with the Tax Commissioner that the
Houghtons’ claim to not be Nebraska residents was inconsist­
ent with the sworn statement by Thomas that he believed he
was eligible for the special capital gains/extraordinary divi-
dend election.
   The district court considered whether the Houghtons’ visas
during the relevant tax years made them incapable of acquir-
ing domicile in the U.K. It observed that the Houghtons’
Tier 2 general visas were valid for 3 years only, that they
contained a specific expiration date, and that the Houghtons
did not apply for ILR during the relevant tax years because
the U.K.’s immigration rules required them to complete a
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                HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

minimum of 5 years of continuous employment before they
became eligible to remain indefinitely. The court determined
that the Houghtons’ “intent to remain indefinitely in the
[U.K.] during those years was inconsistent with [U.K.] law
and was at most ‘an unrealistic subjective intent,’ which is
insufficient to effect a change of domicile from Nebraska to
the [U.K.]”
   The Houghtons filed a timely appeal, which we moved to
our docket. 3

                ASSIGNMENTS OF ERROR
   The Houghtons assign that the district court erred in (1)
determining that their domicile remained in Nebraska because
they failed to prove that they were domiciled in the U.K.
during the relevant tax years and (2) affirming the Tax
Commissioner’s order.

                   STANDARD OF REVIEW
   Any final action of the Tax Commissioner may be appealed,
and the appeal shall be in accordance with the Administrative
Procedure Act. 4 In an Administrative Procedure Act review
proceeding, the district court reviews the agency’s decision de
novo on the record of the agency and may affirm, reverse, or
modify the decision of the agency or remand the case for fur-
ther proceedings. 5
   [1,2] In an appeal under the Administrative Procedure Act,
an appellate court may reverse, vacate, or modify the judg-
ment of the district court for errors appearing on the rec­
ord. 6 When reviewing an order of a district court under the
3
    See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2018).
4
    Neb. Rev. Stat. § 77-27,127 (Reissue 2018).
5
    Kozal v. Nebraska Liquor Control Comm., 

297 Neb. 938

, 

902 N.W.2d 147

    (2017).
6
    Ash Grove Cement Co. v. Nebraska Dept. of Rev., 

306 Neb. 947

, 

947 N.W.2d 731

(2020).
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                  HOUGHTON v. NEBRASKA DEPT. OF REV.
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308 Neb. 188

Administrative Procedure Act for errors appearing on the
record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable. 7

                           ANALYSIS
   Each year, Nebraska imposes a tax on the entire income of
every resident individual. 8 As relevant here, a “[r]esident indi-
vidual” is “an individual who is domiciled in Nebraska . . . .” 9
Thus, the critical issue in determining whether the Houghtons’
entire income was subject to taxation is whether they were
domiciled in Nebraska.
   [3,4] The requirements to establish domicile are well estab-
lished. It is universally held that to acquire a domicile by
choice, there must be both (1) residence through bodily pres-
ence in the new locality and (2) an intention to remain there. 10
All of the surrounding circumstances and the conduct of the
person must be taken into consideration to determine his or
her domicile. 11
   Although we have not addressed domicile in connection
with an income taxation case, the parties do not suggest that
we attribute a different meaning or requirements for estab-
lishing domicile in this context. The discussion most fre-
quently arises in the context of jurisdiction for dissolution
of marriage. 12 But we have repeated the same requirements
 7

Id. 8

     See Neb. Rev. Stat. § 77-2715(1) (Reissue 2018).
 9
     Neb. Rev. Stat. § 77-2714.01(7) (Reissue 2018).
10
     In re Estate of Craven, 

265 Neb. 41

, 

654 N.W.2d 196

(2002).
11

Id. 12

     See, e.g., Rozsnyai v. Svacek, 

272 Neb. 567

, 

723 N.W.2d 329

(2006);
     Huffman v. Huffman, 

232 Neb. 742

, 

441 N.W.2d 899

(1989). See, also,
     Lasu v. Lasu, 

28 Neb. Ct. App. 478

, 

944 N.W.2d 773

(2020); Metzler v.
     Metzler, 

25 Neb. Ct. App. 757

, 

913 N.W.2d 733

(2018); Catlett v. Catlett, 

23 Neb. Ct. App. 136

, 

869 N.W.2d 368

(2015).
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for ­domicile in election-related cases, 13 probate matters, 14 and
matters concerning medical expenses. 15
   [5,6] To change domicile, there must be an intention to
abandon the old domicile. 16 To establish a new domicile, the
present intention must be to remain indefinitely at a location
or site or to make a location or site the person’s permanent or
fixed home. 17
   The Houghtons had the burden of proof 18 to show that they
possessed the intent to abandon their Nebraska domicile and
remain indefinitely in the U.K. “One’s testimony with regard
to his intention is, of course, to be given full and fair con-
sideration, but is subject to the infirmity of any self-serving
declaration, and may frequently lack persuasiveness or even be
contradicted or negatived by other declarations and inconsist­
ent acts.” 19
   The Tax Commissioner and the district court recited the
same basic principles regarding establishment of a domicile.
And they agreed that the relevant facts largely were not in
dispute. Both the Tax Commissioner and the district court
determined that the Houghtons failed to meet their burden
of proof.
13
     See, State v. Jensen, 

269 Neb. 213

, 

691 N.W.2d 139

(2005); Krajicek v.
     Gale, 

267 Neb. 623

, 

677 N.W.2d 488

(2004); State v. Jones, 

202 Neb. 488

,
     

275 N.W.2d 851

(1979); Dilsaver v. Pollard, 

191 Neb. 241

, 

214 N.W.2d 478

(1974).
14
     See, In re Estate of Craven, supra note 10; In re Estate of Meyers, 

137 Neb. 60

, 

288 N.W. 35

(1939).
15
     See, Gosney v. Department of Public Welfare, 

206 Neb. 137

, 

291 N.W.2d 708

(1980); County of Kearney v. County of Buffalo, 

167 Neb. 117

, 

91 N.W.2d 304

(1958).
16
     In re Estate of Craven, supra note 10.
17
     See, In re Estate of Craven, supra note 10; Metzler v. Metzler, supra
     note 12.
18
     See Neb. Rev. Stat. § 77-2781 (Reissue 2018).
19
     Dist. of Columbia v. Murphy, 

314 U.S. 441

, 456, 

62 S. Ct. 303

, 

86 L. Ed. 329

(1941).
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   [7] Our decision is driven by our standard of review.
Importantly, our review is not de novo. Instead, we review the
district court’s order for errors appearing on the record. In con-
ducting such a review, we will not substitute our factual find-
ings for those of the district court where competent evidence
supports those findings. 20
   [8] The record supports the district court’s factual find-
ings. Intent is a question of fact, which may be determined
by circumstantial evidence. 21 The Houghtons’ 2012 tax return
shows that Thomas claimed to qualify for an election that is
available only to a “resident individual,” 22 i.e., someone “who
is domiciled in Nebraska or who maintains a permanent place
of abode in this state and spends in the aggregate more than
six months of the taxable year in this state.” 23 The record also
demonstrates that the Houghtons did not sell their former home
in Nebraska until 2017. These factors do not demonstrate an
intent to abandon their Nebraska domicile.
   [9,10] The court’s factual findings as to the Houghtons’ visa
status are also supported by the record. The evidence showed
that the Houghtons’ Tier 2 general visas were valid for 3 years
with a specific expiration date. It also showed that they could
not apply for ILR during the relevant tax years. “Where a
person’s move is to a foreign country, the nature of the visa
under which admission is granted is an essential inquiry in
determining the person’s domicile.” 24 An individual’s subjec-
tive intent is not dispositive of domicile if a limited visa of
20
     See Ash Grove Cement Co. v. Nebraska Dept. of Rev., supra note 6.
21
     See, e.g., In re Interest of Gabriella H., 

289 Neb. 323

, 

855 N.W.2d 368

     (2014); In re Dissolution & Winding Up of Keytronics, 

274 Neb. 936

, 

744 N.W.2d 425

(2008); State v. Kennedy, 

239 Neb. 460

, 

476 N.W.2d 810

     (1991).
22
     § 77-2715.09(1).
23
     § 77-2714.01(7) (emphasis supplied).
24
     28 C.J.S. Domicile § 21 at 79 (2019). See, also, Comptroller of the
     Treasury v. Mollard, 

53 Md. App. 631

, 

455 A.2d 72

(1983).
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the foreign country is intended to restrict his or her intent, for
an intent inconsistent with law is unrealistic and insufficient
to establish a domicile. 25 The district court determined that
the Houghtons’ intent to remain indefinitely in the U.K. dur-
ing the tax years at issue was inconsistent with U.K. law. The
record contains competent evidence to support this finding,
and the court’s decision conforms to the law.

                         CONCLUSION
   The district court’s decision that the Houghtons failed to
prove they were domiciled in the U.K. during the tax years at
issue conforms to the law, is supported by competent evidence,
and is neither arbitrary, capricious, nor unreasonable. Because
we find no errors appearing on the record, we affirm the judg-
ment of the district court.
                                                    Affirmed.

   Miller-Lerman, J., concurring in the result.
   I concur in the result reached by the court which affirms the
district court’s affirmance of the order of the Tax Commissioner
which found a tax deficiency in the tax returns of the Houghtons
for 2012, 2013, and 2014. However, I believe the district court
unreasonably found that the taxpayers’ election to receive the
special capital gains/extraordinary dividend treatment under
Neb. Rev. Stat. § 77-2715.09 (Reissue 2018) in 2012 was pro-
bative of their residential status in 2013 and 2014. But because
the 2012 election was merely a secondary reason upon which
the Tax Commissioner relied in reaching its finding that the
taxpayers were residents of Nebraska in all 3 years, the district
court’s erroneous finding was not consequential.
   Section 77-2715.09(1) provides:
      Every resident individual may elect under this section
      to subtract from federal adjusted gross income, or for
25
     28 C.J.S., supra note 24; Comptroller of the Treasury v. Mollard, supra
     note 24.
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      trusts qualifying under subdivision (2)(c) of this section
      from taxable income, the extraordinary dividends paid on
      and the capital gain from the sale or exchange of capital
      stock of a corporation acquired by the individual (a) on
      account of employment by such corporation or (b) while
      employed by such corporation.
   For tax year 2012, the taxpayers signed “Form 4797N,”
which provides: “I hereby elect to receive the special capi-
tal gains/extraordinary dividend treatment provided under
Neb. Rev. Stat. § 77-2715.09 and declare under penalties
of perjury that to the best of my knowledge and belief, the
capital stock described above qualifies for the special capi-
tal gains/­extraordinary dividend election.” As noted, under
§ 77-2715.09(1), only Nebraska residents may elect to receive
special capital gains treatment. But § 77-2715.09(2)(a) pro-
vides that “[e]ach individual shall be entitled to one election
under subsection (1) of this section during his or her lifetime
for the capital stock of one corporation.”
   The fact that taxpayers took the election in 2012 is proba-
tive of their residency in 2012. However, because the election
was not available to taxpayers in 2013 and 2014 by virtue of
§ 77-2715.09(2)(a), no logical inference based on taking the
election in 2012 can be imposed on tax years 2013 and 2014.
   In its order, the district court found that the claim of taxpay-
ers that “they were not Nebraska residents during the relevant
tax years is inconsistent with [Thomas] Houghton’s sworn
statement made on the Form 4797N.” (Emphasis supplied.)
Given the statutes, this finding is not warranted.
   Taxpayers took the one-time claim in 2012, which supports a
finding that, for tax purposes, they were residents of Nebraska
in 2012. But in 2013 and 2014, they cannot be faulted for not
taking an election to which they were not entitled and no infer-
ence should be drawn from their forbearance from taking an
unavailable election.
   Taking the election in 2012 tells us nothing about the tax-
payers’ claim of residential status in 2013 and 2014, much
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less that their inaction was inconsistent with their claim of
Nebraska residency in 2012. But, in any event, because the
Tax Commissioner only referred to the 2012 election as an
additional fact after having already found Nebraska residency
for all 3 years based on other evidence, the district court’s ulti-
mate conclusion to affirm the Tax Commissioner’s order was
not error.