KPMG: New York State: Appeals court holds vacation home is not permanent place of abode (July 1, 2022)

KPMG has made available for download their article, “New York State: Appeals court holds vacation home is not permanent place of abode”, which discusses the case Matter of Nelson Obus v. New York State Tax Appeals Tribunal, No. 533310. The summary begins as follows:

Under New York law, a non-domiciliary may be considered a New York resident for income tax purposes if such individual maintains a permanent place of abode in New York and spends in excess of 183 days of the year in the state. 

The taxpayers were domiciled in New Jersey but owned a vacation home in New York State. One of the taxpayers spent more than 183 days in New York due to his employment in New York City. The lower court determined that the vacation home constituted a “permanent place of adobe” because the individuals had the right to reside in the home and exercised that right at times during the tax years at issue, albeit sparingly. The lower court thus found that the individuals were New York residents for individual (personal) income tax purposes.

The Supreme Court held on appeal that the lower court’s decision did not have a rational basis. The court reasoned that the purpose of the statute adopting the permanent place of abode test was to discourage tax evasion by New York residents who maintained a voting residence elsewhere but were “for all intents and purposes” residents of New York state. Although the law did not define “permanent place of abode,” regulations defined it as a dwelling place of a permanent nature maintained by the taxpayer. The court noted that to constitute a permanent place of abode there must be a showing that a taxpayer used a dwelling as his or her residence. It is not sufficient to show that a dwelling could be a permanent place of abode.

To see the full article, click here: “New York State: Appeals court holds vacation home is not permanent place of abode”

Posted by Will Frankenberry, Associate Editor, Wealth Strategies Journal.

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