Is New York’s taxation of statutory residents unconstitutional? Those who follow state and local tax developments (and readers of this blog) may know that Hodgson Russ has been litigating that question in two parallel cases, Chamberlain and Edelman (past coverage here and here). Both cases hone in on whether the U.S. Supreme Court’s 2015 decision in Comptroller v. Wynne upends New York’s prior precedent on this issue in Tamagni v. Tax Appeals Tribunal, requiring a new constitutional analysis. We think so, and that under an analysis consistent with Wynne, the double taxation faced by people domiciled outside of New York but taxed as statutory residents unconstitutionally burdens and discriminates against interstate commerce.
We’re clearly not alone in that view. State Tax Notes just published a comprehensive overview and analysis of the Edelman and Chamberlain cases, concluding unambiguously that New York’s Court of Appeals should overturn Tamagni and declare New York’s taxing scheme unconstitutional. The article, entitled “New York Can’t Ignore Wynne Forever,” can be accessed (behind paywall) here.
Chamberlain and Edelman have made their way through the Appellate Division, and now are at the doorstep of Court of Appeals, which must decide whether to take the appeals. As State Tax Notes’ deputy editor, Jennifer Carr, writes: “Wynne seriously undermined the key rationales of Tamagni, and applying Wynne to New York’s credit for statutory residents leaves little room for concluding anything other than that the statute is unconstitutional.”
We’ll know within the next few months whether the Court of Appeals decides to take on these important appeals.
