Posts by Andrew W. WrightPartner
After years of considering a move from your high-income-tax state (I’m looking at you New York and California) to an income-tax-friendly state (hello Florida), you’ve finally decided to take the plunge. What do you do now? How do you ensure that you change your residence in a way that an auditor looking to collect tax revenue for the Tax Department in your former home state will respect?
My first piece of advice—don’t look to the internet for sophisticated legal advice on this topic.
Last year we published a full-length article in State Tax Notes that discussed the importance of cell phone records in residency audits and did a deeper dive on some of the issues we’ve seen come up in reviewing various cell phone records in these audits. Here is a link to that article: /assets/htmldocuments/2019stn16-4.pdf
Many people experience sticker shock with respect to sales tax and other government-imposed fees (i.e., title fees) when it comes time to purchase or lease a new vehicle.
If you are a regular reader of Administrative Law Judge (“ALJ”) Determinations and Orders issued at New York’s Division of Tax Appeals (“DTA”), you have probably observed the frequency with which ALJ’s dismiss petitions filed by taxpayers based on timeliness issues. For the uninitiated, the DTA’s rules of practice and procedure, which are part New York State’s regulations governing taxation and finance, generally require that taxpayers file a petition appealing an audit determination or conciliation order within 90 days of its issuance. Frequently, taxpayers fail to properly file their petition within this 90-day window. And, absent very unusual circumstances, ALJs who review this issue dismiss those petitions based on these procedural failures. Indeed, dozens of taxpayers have their petitions dismissed by ALJs each year for this very reason.
There are always “traps” in the tax law, where taxpayers unwittingly walk into a tax problem that they didn’t see coming. In the residency area, some taxpayers often got trapped on a move-in or move-out situation, with the Tax Department taking the position that “statutory residency” trumps “domicile.” Thus, a taxpayer who didn’t move into New York until, say, August of a particular tax year still could be taxed as a full-year resident if he or she ran afoul of New York’s statutory residency test (i.e., the taxpayer maintained a permanent place of abode for almost the whole year and spent more than 183 days in the state). Indeed, the Nonresident Audit Guidelines (see page 64) contained a whole section about this.
Guess what? We may have closed this trap!
Fourth of July has come and gone. This year, nonresidents (more on this later) who brought a new boat to New York for the first time were hit with a breath of fresh air—and I’m not talking about the fresh air from [insert any of New York’s many boater-friendly bodies of water]. In years past, nonresidents who purchased a boat outside of New York and later brought that boat into New York were hit with full New York use tax on the purchase price or fair market value of that boat. As part of its 2015 budget, the New York State Legislature amended the sales and use tax rules applicable to boats.