Several weeks ago I blogged about state taxes, and how New York State collects a lot of tax by auditing non-residents who maintain living quarters in that state and also enter New York more than 183 days in a year.
Today's Wall Street Journal has an article (Out-of State Owners Could Face Tax Bill, page A15) that leads the reader to believe that the 183 day rule no longer applies, and that mere ownership of property such as a vacation home is sufficient to trigger New York residence and the obligation to pay New York tax on all of your income. That is not the case. New York law clearly states in order to be a New York resident for tax purposes, New York must be your domicile, or you must maintain New York living quarters and enter the state more than 183 days.
The issue in the Barker case discussed in the WSJ is the exception to the 183 day rule, that is, if the living quarters are not a "permanent place of abode" then you will not be a resident even if you pass the 183 day threshold. The New York regulations provide that a permanent place of abode means "a dwelling place permanently maintained by the taxpayer... However, a mere camp or cottage, which is suitable and used only for vacations, is not a permanent place of abode." In this case, the taxpayer entered NY more than 183 days and unsuccesfully argued that his three story home in the Hamptons did not consitute a permanent place of abode.
I'm sure that the WSJ article caused a lot of unecessary panic. If you want a copy of the case, email me or comment on this blog, including your email address.
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