BILL NUMBER: S3718

SPONSOR: LAVALLE
 
TITLE OF BILL:

An act to amend the tax law, in relation to the definition of a resident
for the purposes of the personal income tax

 
PURPOSE:

To clarify the definition of permanent place of abode for the purposes
of the residency rules under the personal income tax.

 
SUMMARY OF PROVISIONS:

Subparagraph (B) of paragraph 1 of subsection (b) of Section 605 of the
tax law, as amended by section 1 of part o chapter 59 of the laws of
2018, is amended to clarify the definition of a permanent place of
abode.

 
              

JUSTIFICATION:

In February 2014, the New York State Court of Appeals issued its deci-
sion in Gaied v.New York State Tax Appeals Tribunal interpreting New
York's "statutory residency" test for income tax purposes. It clarified
that in order for a person to be taxed as a statutory resident in New
York, that person must, at a minimum, have a residential interest in New
York living quarters. Since that time, however, this decision has been
construed by the Tax Department in a way in which still subjects most
vacation homes to the New York income tax as a New York State resident.

This legislation clarifies the definition of "permanent place of abode"
for the purposes of personal income tax to meet the intent of the Gaid
decision. The usage or ownership of a vacation home will not be suffi-
cient to establish a permanent place of abode for personal income tax
purposes so long as the taxpayer spends less than 90 days a year at the
vacation home and the home is located more than 50 miles from the
taxpayer's primary place of employment in New York and is not used as
the principal residence. This proposal has the benefit of being narrowly
tailored to address usage and ownership of a dwelling in vacation commu-
nities by non-residents.

Vacation home communities heavily depend on out of state residents who
enjoy spending their precious free time and their hard-earned dollars in
New York. It was not the Legislature's intent to include or to classify
as 'residents' those taxpayers who made limited use of vacation homes
located in New York State. Instead, the statutory provisions were added
to the Tax Law in the 1920's to ensure that only those people with no
transitory and abiding connections to New York State be classified as
residents under the Tax Law. Taxpayers with limited use vacation homes
were never supposed to be taxed as 'resident' in New York.

A clear definition of "permanent pace of abode" in Section 605 of the
Tax Law will set in statute consistent policy guidelines with respect to
the rules for personal income tax purposes.

 
LEGISLATIVE HISTORY:

2017-18 S.6860/A.8610;
2013-14 S.3642A/A.4677;

2011-12 S.3998C.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Immediately and shall be applicable to taxable years beginning on or
after January 1, 2020.