September 8, 2022

New York Ownership Timeline: Impact on Residency

By Barry Halpern, Partner, Tax & Business Services & Lisa Haime, Senior Manager, Tax & Business Services

New York Ownership Timeline: Impact on Residency State & Local Tax

The New York State Tax Appeals Tribunal has reversed an August 26, 2021, Administrative Law Judge’s decision on residency as it relates to the consideration of a permanent place of abode for statutory tax residency purposes.

In the Matter of Joseph Pilaro, the New York State Tax Appeals Tribunal determined that the taxpayer did not maintain a permanent place of abode in New York State for more than 11 months, as required by New York regulations and tax guidelines1, and therefore, the taxpayer could not be treated as a statutory resident for New York State income tax purposes.

The original 2021 decision found that the taxpayer maintained a permanent place of abode in New York for at least 11 months and met the requisite day count, and, therefore, was determined to be a New York statutory resident. The decision cited that the taxpayer rented an apartment in New York City from January 1, 2014, through November 1, 2014, and then owned an apartment in New York City beginning December 3, 2014; thus, it determined that the taxpayer maintained a permanent place of abode in New York City for an aggregate period of 11 months.

The New York State Tax Appeals Tribunal disagreed with the lower Court’s ruling, stating that the taxpayer maintained a permanent place of abode in New York City only for the period January 1, 2014, through November 1, 2014. With regard to the period beginning December 3, 2014, the Tax Appeals Tribunal rejected the notion that maintaining (ownership of) a residence is sufficient for it to be considered a permanent place of abode. Further, relying on the precedent established in the Matter of Obus, as the taxpayer did not reside at the purchased apartment from December 3, 2014, through December 31, 2014, such residence cannot be considered a permanent place of abode during that period. As the Court found that the taxpayer maintained a permanent place of abode in New York City for only 10 months and one day, the New York State Tax Appeals Tribunal reversed the decision of the Administrative Law Judge.

For additional information on tax residency, contact Barry Halpern at barry.halpern@marcumllp.com, Lisa Haime at lisa.haime@marcumllp.com, or your Marcum tax professional.

Source

  1. New York State Department of Taxation and Finance updated the guidelines to provide that beginning in 2022 a taxpayer only needs to maintain a permanent place of abode for a period exceeding ten months, not eleven months, for statutory residency purposes.