senate Bill S3998C

Clarifies the definition of "permanent place of abode" for the purposes of the residency rules under the personal income tax

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 11 / Mar / 2011
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / May / 2011
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / May / 2011
    • PRINT NUMBER 3998A
  • 10 / May / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 02 / Jun / 2011
    • 1ST REPORT CAL.963
  • 06 / Jun / 2011
    • 2ND REPORT CAL.
  • 07 / Jun / 2011
    • ADVANCED TO THIRD READING
  • 24 / Jun / 2011
    • COMMITTED TO RULES
  • 04 / Jan / 2012
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 03 / Feb / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 03 / Feb / 2012
    • PRINT NUMBER 3998B
  • 04 / May / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 04 / May / 2012
    • PRINT NUMBER 3998C
  • 22 / May / 2012
    • REPORTED AND COMMITTED TO FINANCE
  • 05 / Jun / 2012
    • 1ST REPORT CAL.1054
  • 06 / Jun / 2012
    • 2ND REPORT CAL.
  • 11 / Jun / 2012
    • ADVANCED TO THIRD READING
  • 13 / Jun / 2012
    • PASSED SENATE
  • 13 / Jun / 2012
    • DELIVERED TO ASSEMBLY
  • 13 / Jun / 2012
    • REFERRED TO WAYS AND MEANS

Summary

Provides that 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 and the individual stays overnight at such dwelling for no more than ninety days during the taxable year.

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Bill Details

See Assembly Version of this Bill:
A6266C
Versions:
S3998
S3998A
S3998B
S3998C
Legislative Cycle:
2011-2012
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยง605, Tax L

Sponsor Memo

BILL NUMBER:S3998C

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:
Earlier this year, the State of New York division of Tax Appeals
upheld the decision of an Administrative Law Judge that ruled all
income earned by a Connecticut couple who own a second home on Long
Island is subject to New York State taxes. This ruling has sent a
shudder of concern through vacation-home communities across the State
as vacation homeowners relied upon an exemption in the tax
regulations.

Current law states that if you are domiciled in another state, own a
permanent place of abode in New York and spend more than 183 days in
New York, you are a resident for income tax purposes. The tax
regulation, however, excludes camps or cottages suitable and used only
for vacations. In the above referenced case, the family lived in
Connecticut and had a vacation home on Long Island's East End which
they used only five or six weekends a year. The husband worked in New
York City, returning each night Connecticut. They has pad New York
State income tax, but at the non-resident rate because they live in
Connecticut. The ruling determined their Long Island vacation home was
a permanent place of abode in New York and the husband was in the
State more than 183 days between work and vacation. As such, they were
deemed residents of New York State pursuant to provisions of the Tax
Law and held accountable for additional taxes.

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. If left unchanged, the implications of this decision will
surely discourage vacation home ownership in New York causing further
damage to an already struggling housing market and impeding New York's
economic recovery. This legislation amends the Tax Law to expand the
definition of 'permanent place of abode" for the purposes of personal
income tax.

Under this legislation, 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. It also is similar to a proposal that was


under consideration by the Tax Department several years ago when
efforts were being made to exclude vacation homes from classification
as 'permanent places of abode' under New York's residency rules.

This change is being made to clarify existing law. Despite the
decision in the New York Division of Tax Appeals, it is clear that it
was never the Legislature's initial intent to include or to classify
as 'resident's 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.

LEGISLATIVE HISTORY:
New legislation.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
Immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 3998--C                                            A. 6266--C

                       2011-2012 Regular Sessions

                      S E N A T E - A S S E M B L Y

                             March 11, 2011
                               ___________

IN SENATE -- Introduced by Sens. LAVALLE, MARCELLINO, GRISANTI, JOHNSON,
  RANZENHOFER  -- read twice and ordered printed, and when printed to be
  committed to the Committee on Investigations and Government Operations
  -- committee discharged, bill amended, ordered  reprinted  as  amended
  and  recommitted  to said committee -- recommitted to the Committee on
  Investigations and Government Operations  in  accordance  with  Senate
  Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said  committee  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

IN  ASSEMBLY  --  Introduced  by M. of A. THIELE, McLAUGHLIN, D. MILLER,
  WEISENBERG, DUPREY, JAFFEE, MILLMAN, CAMARA -- Multi-Sponsored  by  --
  M. of A. ABINANTI, CONTE, CROUCH, GOODELL, LATIMER, McDONOUGH, PAULIN,
  RAIA, SIMOTAS, TENNEY, TITONE -- read once and referred to the Commit-
  tee  on  Ways and Means -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee --  recommitted
  to the Committee on Ways and Means in accordance with Assembly Rule 3,
  sec.  2  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee -- again reported from  said
  committee  with amendments, ordered reprinted as amended and recommit-
  ted to said committee

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  ASSEM-
BLY, 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09792-04-2

S. 3998--C                          2                         A. 6266--C

eighty-three  days  of the taxable year in this state, unless such indi-
vidual 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 INDIVID-
UAL 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 INDIVID-
UAL STAYS OVERNIGHT AT SUCH DWELLING FOR NO MORE THAN NINETY DAYS DURING
THE TAXABLE YEAR.
  S 2. This act shall take effect immediately and shall be applicable to
taxable years beginning on or after January 1, 2012.

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