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Noonan’s Notes Blog is written by a team of Hodgson Russ tax attorneys led by the blog’s namesake, Tim Noonan. Noonan’s Notes Blog regularly provides analysis of and commentary on developments in the world of New York and multistate tax law. Noonan's Notes Blog is a winner of CreditDonkey's Best Tax Blogs Award 2017.


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Supreme Court Denies Cert in Wynne Cases

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It appears we’ve reached the end of the line on our “Wynne” cases. On October 7, 2019, the Supreme Court of the United States declined to hear our appeals in Edelman v. Department of Taxation and Finance and Chamberlain v. Department of Taxation and Finance. In both cases, we argued that New York’s statutory residency taxing scheme, which subjected taxpayers who qualified as dual residents of New York and Connecticut to double taxation, was unconstitutional and in violation of the Commerce Clause. As we reported earlier this year, the New York State Court of Appeals previously declined to hear the taxpayers’ appeals in April 2019.

After the cert petitions were filed in June 2019, five other tax organizations joined the fight by submitting friend-of-the-court “amicus” briefs supporting the petitions. So there seemed to be a lot of positive momentum and we remained hopeful that the Court would take up the cause. But, alas, it was not to be.

The taxpayers are obviously disappointed that the Supreme Court declined to take the cases, especially in light of all the support we received from the organizations who filed amicus briefs and from the practitioner community generally. Of course, the Court receives thousands of certiorari petitions every year, so it obviously cannot take every case. Still, as has been speculated by some commentators, the New York decisions could have the more nationwide effect of limiting the impact of the dormant commerce clause analysis applied by the U. S. Supreme Court in its 2015 Comptroller v. Wynne decision. It’s also important to note that, in its brief opposing the grant of certiorari, one of the arguments made by the State of New York was that even if the double-taxation issue in the cases merited the Supreme Court’s attention, it would be better for the Court to “allow the issue to percolate in the lower courts” before addressing the issue itself.

So perhaps the book is not completely closed on the issue. As we continue to represent taxpayers facing double taxation as a result of dual-residency classifications, we’ll be sure to keep a close eye on developments in other states or in the Court itself that perhaps resurrect the issues we faced here. And of course, as New York continues to enforce its statutory residency provisions in thousands of audits, we can expect further developments in the law, related to how far those requirements can actually extend. We continue to have cases testing the boundaries of what it means to maintain a “permanent place of abode” (with cases like we discussed in this post) and what should properly constitute a “day” in New York, especially with the proliferation of cell phone data in these audits, as we wrote about here. So controversy about New York’s statutory residency rules is not about to subside.

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