New York’s Statutory Residence Wars: A Ray of Hope?
Under New York State law, a non-domiciliary can be treated as a New York State resident for income tax purposes and taxed on all of his or her income, regardless of the source, if he or she has a permanent place of abode in New York State and spends more than 183 days during the taxable year in the State. The State Department of Taxation and Finance (the Department) says that a "permanent place of abode" is a house or apartment that is capable of being lived in year-round, regardless of the use that a taxpayer makes of it. For example, the Department holds that a person who is clearly domiciled in Connecticut, commutes to a job in New York City (so he is in the State for more than 183 days during the year), and has a summer home in upstate New York that he occupies for one week a year is a New York State resident because he meets the permanent place of abode and the 183-day tests, even though the person's presence in New York for more 183 days has nothing to do with the vacation home.
Many in the state and local tax field believe that the Department is wrong, but up to now the courts have upheld its position. This article, which appeared in the February 18, 2013 edition of State Tax Notes, highlights a new case that offers some hope. Although the Department's position was upheld, two of the five Appellate Division judges dissented and one hopes that the Court of Appeals will adopt the dissenters' reasoning.