What's happening
The bill amends the definition of "resident" for New York income tax, narrowing what qualifies as a permanent place of abode.
Why it matters
Narrows the scope of what counts as a “permanent place of abode” for tax residency. meaning some individuals who own or rent a dwelling in New York, but don’t use it as their main home, could avoid being classified as NY tax residents if they meet new criteria.
Provides relief for individuals with secondary homes far from their workplace. if a dwelling is more than 50 miles from their New York job, isn’t their principal residence, and is used less than 90 nights a year, it won’t trigger residency status under state tax law.
Could reduce "surprise" tax bills for out-of-state earners with vacation or weekend homes in New York. , especially those who carefully limit their use of these properties and don't commute to a NY workplace from there.
May impact state tax revenue and tax planning strategies. by allowing more non-domiciled individuals to avoid full-year resident taxation, potentially affecting both high-income taxpayers and the state’s budget calculations.
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Who cares
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Redefine Tax Residency Rules
Plain English, a few words. Used as the page title.
Sponsors
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History
- Referred to investigations and government operations
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Clarify Tax Residency Rules
In Assembly Committee · Ways And Means · Sponsor Fred Thiele
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
S. 6860 A. 8610
2017-2018 Regular Sessions
SENATE - ASSEMBLY
September 1, 2017
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to the definition of a resident for the purposes of the personal income tax
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (B) of paragraph 1 of subsection (b) of section 605 of the tax law, as amended by chapter 28 of the laws of 1987, is amended to read as follows:
(B) 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, unless such individual is in active service in the armed forces of the United States. For purposes of this subparagraph, a permanent place of abode shall not include a dwelling that is owned, leased, or maintained by the individual or the individual's spouse where such dwelling is not used as the individual's principal residence, is located more than fifty miles away from the individual's place of employment in this state and the individual stays overnight at such dwelling for no more than ninety days during the taxable year.
§ 2. This act shall take effect immediately and shall be applicable to taxable years beginning on or after January 1, 2018.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13369-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 Chapter 28 of the Laws of 1987, 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 decision 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 Gaied decision. The usage or ownership of a vacation home will not be sufficient 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 communities 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. This amendment is necessary to clarify the existing law. 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 'residents' in New York.
A clear definition of "permanent place 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
2013-14: A.4677-A/S.3642-A 2011-12: A.6266-C/S.3998-C
Fiscal implications
To be determined.
Effective date
Immediately and shall be applicable to taxable years beginning on or after January 1, 2018.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.