State Tax Snapshot: New York Residency - Does Any Part of a Day Really Count?

While challenges to New York's definition of a “statutory resident” have been abundant, none of those challenges have directly focused on what it means to spend a “day” in New York, Maria Eberle, of McDermott Will & Emery LLP, explains in this week’s issue of the Bloomberg BNA Weekly State Tax Report.

There are two situations in which an individual may be considered a New York resident (and thus be liable for personal income tax on all of his or her income) (1) the domiciliary and (2) the statutory resident, Eberle writes. New York’s domicile provision is legally straightforward, but the state’s statutory resident provision is rife with undefined terms and far from straightforward in its application, Eberle says. The current definition of a statutory resident is one “who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the taxable year in this state,” Eberle writes.

In interpreting what is meant by “spend[] in the aggregate more than one hundred eighty-three days of the taxable year in this state,” the Department promulgated the following regulatory language:

[i]n counting the number of days spent within and without New York State, presence within New York State for any part of a calendar day constitutes a day spent within New York State, except that such presence within New York State may be disregarded if such presence is solely for the purpose of boarding a plane, ship, train or business for travel to a destination outside New York State, or while traveling through New York State to a destination outside New York State…

While this regulation has been repeatedly upheld by the courts, its broad interpretation by the Department frequently strays egregiously far from the legislative intent—which has not been thoroughly examined until by the Court of Appeals inMatter of Gaied, 2014 N.Y. Slip Op. 01101 (N.Y. Feb. 18, 2014), Eberle says. While there has been a fair amount of activity concerning the meaning of a “day,” there has been little analysis given to the meaning of “spend,” Eberle writes. Does one spend a day in New York when there for only a few hours? Check out Eberle’s article here to find out.

In other developments…

New Report Highlights Need for States to Help Address Income Inequality , by the Center on Budget and Policy Priorities

Guess Which State Has the Highest Liquor Taxes in the Nation , by the Tax Foundation

Inside the New York Budget Bill Part Three: Apportionment , a new report by McDermott Will & Emery

Compiled by Priya D. Nair
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