A New York State administrative law judge (“ALJ”) recently determined that a teacher who became domiciled in New York in December 2014 upon his purchase of an apartment in New York City was also a statutory resident of New York from January through November of the same year. Matter of Joseph Pilaro and Joseph Gorrie, NY St Div of Tax Appeals DTA No. 829204, (Aug. 26, 2021). While ALJ decisions are not precedential, this case nevertheless demonstrates the importance of keeping detailed factual records and introducing all factual evidence available when contesting a residency case in New York.
Facts: In 2014, Joseph Pilaro taught online classes for West Los Angeles College in California and was an assistant professor at Nassau Community College in New York City. Pilaro shared a house in California with his husband, but, from January 1, 2014 through November 1, 2014, Pilaro also rented an apartment in New York City where he stayed when not in California. Pilaro and his husband bought an apartment in New York City on December 3, 2014, at which point they conceded that they were domiciled in New York. For the period between the expiration of his lease and before the purchase of his apartment, Pilaro stated that he stayed with various friends when he was in New York but did not provide additional details. The dispute in the case centered on whether Pilaro was a statutory resident of New York during the period January 2014 through December 2, 2014, prior to his purchase of the apartment.
Decision: To be a statutory resident, a taxpayer must (1) maintain a permanent place of abode in the state or city; and (2) be physically present in the state or city on more than 183 days in a taxable year. Tax Law § 605(b)(1)(B). Further, a statutory resident must maintain his or her permanent place of abode for “substantially all of the taxable year.” 20 NYCRR 105.20(a)(2). The division’s audit guidelines interpret the phrase “substantially all of the taxable year” to mean a period in excess of 11 months.
In determining whether Pilaro maintained a permanent place of abode for substantially all of the tax year, the ALJ found the audit guidelines to be instructive and noted that Pilaro’s residency at his two apartments in New York in 2014 amounted to 11 months exactly, rather than a period in excess of 11 months. Nevertheless, the ALJ ruled against Pilaro because he had not offered any evidence or testimony demonstrating that he did not have a permanent place of abode from November 1, 2014, when his lease expired, until December 3, 2014, when he purchased his apartment. Had Pilaro been able to demonstrate that he exclusively stayed with friends when he was in New York from November 1 through December 2, 2014, and did not maintain a permanent residence, he may have prevailed in asserting that he was not a statutory resident.
The ALJ also rejected Pilaro’s argument that he could not be a statutory resident in the same year he was a domiciliary and permitted the division to include days in which Pilaro was domiciled in New York in the statutory resident day-count.