New York State

Everyone has heard about the affluent, or even not-so-affluent, New Yorkers who have moved to Florida, or to another state,[i] to escape New York’s tax regime, not to mention the cold.

More recently, some of us are encountering New Yorkers who are looking to relocate, not to another state, but to another country.[ii]

Today we’ll consider the New Yorker who is thinking about moving overseas – in no small part because they have had their fill of paying New York taxes[iii] – but who is not willing to give up their U.S. citizenship; they want to maintain their U.S. passport to keep open the option of returning to the U.S. if future circumstances ever warrant such a move.[iv]
Continue Reading When New York Taxpayers Move Overseas

Where is the Economy Heading?

According to the data released Friday by the Department of Labor, the U.S. economy added approximately 528,000 jobs in July, reducing the unemployment rate to 3.5 percent.[i] Although this figure was certainly better than what was expected by many economists, it seems to belie other signs of economic weakness.

Many states, for example, have reported recently that they are experiencing significant declines in estimated tax payments or that they expect declines in revenue from the withholding of personal income taxes.[ii] These developments are being attributed to the performance of the stock market[iii] and to the fact that wages have not kept in step with inflation.[iv]
Continue Reading New York to Taxpayer: “Forget What the Feds Said, You’re a ‘Responsible Person’”

“Summertime and the Living” Isn’t Easy[i]

Summer in the New York Metro Area can be challenging. Some would say it sucks.[ii] It gets really hot. When it rains, it pours – no spritz here. The humidity is oppressive.[iii] Ironically, a forecast of sunny days and clear skies that may draw other “subspecies”[iv] of humans out of their dwellings causes many New Yorkers, instead, to remain indoors, whether it be at home, in air-conditioned shops, or at other artificially cooled venues.
Continue Reading Leaving New York? Can You Prove It?

Escape from New York[i]

According to data released by the IRS earlier this year, the pandemic triggered a “wealth migration” that saw high-tax states like New York lose high-income earners to low-tax jurisdictions such as Florida.[ii]

This weekend, the Wall Street Journal reported that New York’s tax base shrank by $19.5 billion as a result of workers fleeing during a time when lockdown measures allowed employees to work remotely. Other high-tax jurisdictions experienced a similar exodus of workers.

Unfortunately for New York, the migration out of the State began before the pandemic, which does not bode well because, as the Office of the Comptroller recently stated, “the personal income tax is the single largest revenue source for New York, accounting for two of every three tax dollars.”
Continue Reading Statutory Residence in New York: Time to Rethink the “Permanent Place of Abode” Test?

State Finances

Much has been written over the last few weeks about the unprecedented financial cushion that many states have accumulated thanks to federal support prompted by the pandemic and larger-than-expected tax revenue.[i]

However, in the last few days we have started to hear warnings from various sources that state economic forecasts for the remainder of 2022 and for 2023 are likely to be revised downward; for example: “The current global geopolitical crisis, continued uncertainties related to the ongoing pandemic, high inflation, and evolving federal monetary policy could all muddle the revenue outlook for the states.”[ii] Add to that the expiration of federal aid programs, the volatility of the stock markets, and talk of recession.[iii]
Continue Reading Will New York Be Looking At Your Federal Tax Return? Probably

Limited Liability?

Many individual taxpayers who invest in a closely held business, including one organized as a corporation, fail to appreciate there are circumstances in which they may be held personally liable by a state or local taxing authority for the sales tax collected or required to be collected by the business.

In other words, if certain criteria are satisfied, the limited liability protection that an individual shareholder would normally enjoy as a matter of state corporate law, and which they may have assumed – not unreasonably – would shield them from personal responsibility for any and all liabilities of the corporation, including taxes, will be of no avail even where the shareholder has respected the separate legal status of the corporation.[i]
Continue Reading Shareholder Beware: Personal Liability for N.Y. Sales Tax

The 2023 Budget

Last week, the New York Legislature passed the State’s 2022-2023 Budget. The $220 billion Budget reflects an $8 billion increase over last year’s budget (a more than 3 percent jump). It is also $4 billion more than what the Governor had initially proposed. In fact, it is the largest spending bill ever to have been enacted by Albany.

I suppose the explanation is obvious: bolstered by still unspent Federal stimulus money[i] and better than expected tax revenues, the Governor and the Legislature decided to be especially generous to their constituents during this election year.[ii]
Continue Reading The Deduction of Cannabis Business Expenses Following New York’s 2023 Budget

“Yes” to Art, “No” to Tax

Private patronage of the arts. For centuries, artists, museums, and galleries have depended, in no small part, upon the largesse of wealthy families.

Today, as in the past, many of these benefactors are the successful owners or former owners of businesses who can afford to indulge their passion for visual art.[i] Others are investors for whom art represents merely one part of a balanced portfolio.Continue Reading The Rental of Art Between Related Parties: Applying the Resale Exclusion to the N.Y. Sales Tax

Taxes and Snowy Weather?

How many of you awoke Saturday to find that the winter storm about which we had heard so much during the preceding days had lived up to its hype?

What was your first thought? “Fudge,” right? Time to shovel the driveway and clean off the car. Slippery sidewalks and roads. Ultimately, slush.

A few of you may have mused aloud about moving to Florida, perhaps oblivious to the cold that visited that state over the weekend.[i]

I’ll admit that I immediately wondered whether some enterprising individuals would show up, armed with the latest in snow removal technology, to offer their services.

Which brings me to another confession: I tried to recall whether snow removal services were subject to New York sales tax. A quick check and, “sugar” – turns out they are.[ii]
Continue Reading The Liquidation of a Partner’s Interest Under NYC’s Unincorporated Business Tax

1-12-22

Last Week

What a week it was.

It began relatively well, with the Cowboys losing the NFC wild card game, albeit to a California team.[i]

It ended disturbingly, with the Arizona Democratic Party censuring Senator Sinema for having opposed the changes to the Senate’s filibuster rule proposed by Senate Majority Leader Schumer.[ii]

What occurred in the interim was anything but reassuring.
Continue Reading Revised Nonresident Audit Guidelines For New York Statutory Residence