Sources told TMZ Holmes filed the divorce documents in New York because she felt she'd have a better chance of winning sole legal custody of the couple's daughter Suri there than in California.
Cruise, however, is trying to move the divorce proceedings to California -- where the couple has a residence -- because the tax rates are significantly lower, TMZ reported.
The "Mission Impossible" actor has been trying to make it appear as though he and Holmes have not been living in New York, sources told the celebrity news Web site. Meanwhile, Holmes has been using a New York apartment Cruise deeded to her to establish residency in the city.
Man spent 15 hours in jail for plugging electric car into an outlet at a school
Martin Bashir resigns from MSNBC over Sarah Palin comments