New York State had treated a person who is not domiciled but maintains a “permanent place of abode” for more than 183 days in a taxable year as a resident for income tax purpose. The state tax department had interpreted permanent place of abode as a house or apartment that is capable of being used as a residence even though the person does not actually use it so.

The highest court of New York recently held that in order for a house to be treated as a permanent place of abode for income tax purpose, the person must use the house as his residence. Following the Court of Appeals’ decision, the state tax department changed its ‘statutory residence rule’ and decided that only a place that was in fact used by the taxpayer as a principal residence could constitute a “permanent place of abode” within the meaning of the statute.

See NYS Tax Department Reverses Position on Statutory Residence Rule, Peter Faber, jdsupra.com

Posted by Jin Keol Park, Associate Editor, Wealth Strategies Journal