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State & Local Tax

Mark Klein's Update

Mark Klein occasionally sends an update to state and local practitioners. If you would like to be on his mailing list, click here to send us your e-mail address.

December 2011 Tax Law Changes

Posted 12/14/11

On December 7, 2011, an extraordinary session of the New York State Legislature, called by the governor, enacted a bill amending various sections of the tax law. This angered some legislators due to the lack of time to review and debate the legislation. In fact, because this was an extraordinary session of the Legislature, the normal 3-day review period was cancelled and the legislation passed the Legislature in one day. The bill was delivered to the governor on December 8, and he signed it on December 9. The bill is intended to help close a $3.5 billion projected deficit in next year’s budget. However, because the legislation is only expected to generate approximately $1.9 billion in revenue, additional cuts in spending or new taxes will be necessary to balance next year’s budget. Click here to read the full article.

New York State Updates Income Tax Nonresident Audit Guidelines

Posted 3/17/10

For the first time in over a decade, New York State has updated and revised its income tax nonresident audit guidelines. These guidelines are generally binding on auditors throughout the State in connection with all residency audits. Although dated March 31, 2009, these guidelines were released just last week.

There are a host of changes from the prior version of the guidelines, the most notable being the re-elevation of family connections to one of the five primary factors. The new guidelines also clearly state that the location of burial plots or where the taxpayer's income tax returns are prepared are "non-factors" and can not be considered when determining domicile.

If you or your clients are involved in a residency audit, this document is required reading. You can get the full text of the new guidelines from the Tax Department's website at http://www.tax.state.ny.us/pdf/2009/misc/residency_guidelines_2009.pdf.

New York Wants to Eliminate the Temporary Stay Rule

Posted 10/16/08

On October 15, New York State announced its intention to eliminate the "temporary stay" exemption from New York State and City income taxes retroactively to January 1 of this year. Under the current rules, a nonresident of New York can acquire living quarters and be physically present in New York for more than 183 days in a calendar year without being subject to resident taxes if the abode is "maintained only during a temporary stay for the accomplishment of a particular purpose." The current exemption is fairly broad and applies to residents of other states as well as to foreign nationals who enter New York under work visas (H-1B).

Under the Tax Department's proposal, these taxpayers have the potential to be treated as New York State/New York City residents if they acquire living quarters within the state and are present for more than 183 days in a calendar year. This rule would force these nonresidents to pay tax to New York on their world-wide income.

This proposal is expected to generate over $45 million in new revenue.

As you can see by clicking here, New York is soliciting public comments on this new proposal. Affected taxpayers or their representatives should make their views known before the end of November.

New Sales Tax Rules Apply to Exempt Organizations

Posted 8/18/08

Pursuant to a little-publicized provision of this year's budget bill, effective September 1, New York State will require tax-exempt organizations to begin collecting sales tax on certain sales. Under the new rules, exempt organizations must collect tax on the following: 

• any lease or rental of tangible personal property 
  
• most utility services 
  
• the maintenance, service, or repair of real property 
  
• regular sales of any property by telephone, mail order (including e-mail), over the Internet, or by other similar "remote" means

Under these new rules, an exempt hospital's lease of radiology equipment to a group of doctors becomes taxable on September 1. Tax also applies to the hospital's charges to doctors for telephone answering services.

Similarly, an exempt museum that regularly sells books, photographs, posters, and other souvenirs through its Web site must begin collecting tax on all New York sales effective September 1.

These new rules apply to nonprofit, charitable, educational, literary, scientific, and religious organizations; armed service posts; Indian nations; and most other organizations that were previously exempt from sales tax collection responsibilities.

Affected organizations must register with the New York State Department of Taxation and Finance by filing Form DTF-17 immediately.

If you have any questions about any of these rules or their application, please contact us.

Filing Extension Update

Posted 4/19/2007

Following the Internal Revenue Service, the New York State Department of Taxation and Finance has extended the deadline for taxpayers affected by the April 16th storm. The new deadline is April 26, 2007. For details, go to www.nystax.gov.

Just When You Thought It Was Over...

Posted 4/17/2007

The New York State Department of Taxation and Finance has just announced that taxpayers directly affected by the April 16 storm have been granted a two-day extension of time to file their New York State personal income tax returns. The new deadline is midnight Thursday, April 19. Affected taxpayers should write "April Storm" on the top center of the front page of their return.

More details can be found on the Tax Department's website: www.nystax.gov.