The New York Tax Appeals Tribunal recently held that a vacation home constitutes a “permanent place of abode” to make taxpayers statutory residents for New York income tax purposes.

The taxpayers, a married couple, were domiciled in New Jersey. The husband was a hedge fund manager who primarily worked out of his New York City office and was in the state for more than 183 days per year. The couple also maintained a vacation home in Northville, where they spent no more than two to three weeks each year.

New York imposes income tax on those not domiciled in the state but who maintain a permanent place of abode in the state and who are present in New York for more than 183 days during the year. The Tribunal held that the husband’s presence in the state combined with the taxpayers’ ownership of a vacation home was sufficient to establish statutory residency in New York.

The taxpayers argued that the Northville home was not a “permanent place of abode” under Tax Law § 605(b)(1) because their primary residence was in New Jersey for the tax years at issue and the vacation home was more than 200 miles from the husband’s office. The Tribunal disagreed, holding that the vacation home qualified as a permanent place of abode because it was suitable for year-round habitation. The taxpayer’s actual use of the residence only for vacation purposes was not determinative. Rather, because the five-bedroom, three-bathroom house had year-round climate control and could be used as a primary residence, it was sufficient to render the taxpayers statutory New York residents for income tax purposes.

In the Matter of the Petition of Coulson, Dkt. No. 827736 (N.Y. Tax Appeals Tribunal, 2021).