Just because you own property in New York doesn’t mean you have to pay New York taxes, a high court has ruled.
The New York State Court of Appeals declared that tax auditors must prove out-of-state residents use their New York properties as their own homes in order to charge city and state income taxes.
The state is expected to to lose a large share of the $300 million in annual revenue assessed through residency audits, tax lawyers told the Journal, the Wall Street Journal reported.
“It is an important decision that could significantly alter the way New York taxes people alleged to be residents,” said Jack Trachtenberg, a tax lawyer at Reed Smith LLP and former taxpayer advocate, to the Journal. Previously, New Yorkers who lived at least 183 days in the state were considered residents.
The decision is a big win for professionals with second-homes or investment properties in New York City, just as the city is about to hike rates by 3.8 percent for single-family homes and 5.5 percent for co-op owners, as The Real Deal previously reported. [WSJ] – Angela Hunt