New York continues to aggressively argue that taxpayers are New York residents. In the recent Tax Appeals Tribunal Case of Obus and Coulson the Tribunal affirmed the deficiency against the taxpayers. The State argued they were “statutory residents” even though the taxpayers maintained that they lived in New Jersey and were only required to file New York income tax returns as non-residents.

In Obus, the taxpayer husband worked in New York City. The taxpayers purchased a vacation home in New York about 200 miles north of New York City. Although the New York home was only used for vacations, because the taxpayers were in New York over 183 days and had a permanent place of abode in New York state, they are deemed statutory residents.

This case is a reminder as to how carefully the residency and non-residency requirements of states with income or death taxes needs to be reviewed. In some cases, careful pre-planning can avoid being subject to a state’s tax on residents.