Noonan’s Notes Blog

There is a lot of residency guidance out there harping on the importance of taking various administrative steps to change your domicile, like changing your driver’s license, voter registration, vehicle registration, etc.  And while those steps are certainly indicative of a move, they are typically less relevant to the final determination, and often can cause taxpayers to lose focus on what we think can be the most important factor in changing your domicile: where you spend your time.  Indeed, a poor “time factor” can hamstring an otherwise legitimate change in domicile.    

This ...

Earlier this year we reported on a Massachusetts case where a court, (wrongly, we think), determined that a nonresident taxpayer could be taxed on the sale of stock in a business that he founded and ran in the state. Turns out this issue might be contagious……a few months ago, Ohio successfully made a similar argument.  In a Final Determination issued on March 28, 2024, the Ohio Tax Commissioner denied Claimants Dr. Garry Rayant and Dr. Kathy Fields’s $719,492 refund application filed with their amended 2018 Ohio tax return. The Claimants sold 25% of their interest in Rodan & Fields ...

Over the past decade, New York and other states have employed some version of a “False Claims Act” (FCA) to enforce violations of the tax law, and occasionally these cases wade into residency and personal income tax waters. One of the tax jurisdictions is the District of Columbia, and recently they scored a big win in a FCA case.

As states continue to seek increased revenues, especially those high-tax states dealing with a dwindling tax base, we’re starting to see some states take unusual and fairly aggressive positions in tax cases. One recent example we covered involved New York and the enforcement of its “convenience rule” in the Zelinsky case. In November 2023, the Massachusetts Appellate Tax Board issued another doozy, holding in Welch v. Commissioner of Revenue that a nonresident could be taxed on the gain from the sale of stock. (Docket No. C339531 (November 29, 2023)).

A few weeks ago, the Tax Appeals Tribunal issued a decision in a residency case, Matter of Glynn, holding that the Administrative Law Judge’s grant of summary determination was properly granted to the Division of Taxation. This is somewhat unusual for a residency case, as more extensive fact finding is usually necessary to resolve these disputes. And our fellow blogger at Taxes in New York (“TiNY”) had a lot to say about this opinion. A few other thoughts from this corner………

Edward Zelinsky, a Connecticut resident and professor at the Benjamin N. Cardozo School of Law in New York City, recently added another chapter to his New York tax chronicles, once again challenging New York’s convenience of the employer rule. Professor Zelinsky lost his previous battle with New York, Zelinsky v. Tax Appeals Tribunal, 1 N.Y.3d 85 (2003), cert. denied, 541 U.S. 1009 (2004), but this one has a bit of a different twist, as outlined in his 2019 and 2020 petitions for a hearing with the Division.