APPELLATE COURT DISMISSES CONSTITUTIONAL CHALLENGE TO NEW YORK’S STATUTORY RESIDENCY SCHEME -

The New York Appellate Division, First Department, finding that the U.S. Supreme Court’s 2015 decision in Comptroller of the Treasury v. Wynne, does not render New York’s statutory residency scheme unconstitutional, upheld the dismissal of a declaratory judgment action brought by a married couple domiciled in Connecticut. Edelman v. N.Y.S. Dep’t of Taxation & Fin., Nos. 156415/16, 6970, 6971, 2018 NY Slip Op. 04672 (1st Dep’t, June 26, 2018).

Background of New York’s Statutory Residency Scheme. Under New York’s personal income tax laws, individuals who are domiciled outside New York nevertheless may be treated as “statutory residents” of New York—and be subject to New York’s personal income tax on all of their income—if they maintain a permanent place of abode in New York and are present in New York for more than 183 full or partial days during a year. Tax Law § 605(b). Thus, those individuals having a domicile outside New York while also satisfying New York’s statutory residency requirements risk being subject to tax on all of their income in more than one state.