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
Goodbye New York
Late last year, the U.S. Census Bureau released data showing population shifts across the country during 2021.[i] According to this information, New York lost 1.8 percent of its population.[ii]
It appears New York’s experience was not an isolated case. In a report issued earlier this month, the Tax Foundation – relying not only upon the Census Bureau’s data but also upon the data sets of some major moving companies – concluded that “[t]he picture painted by this population shift is a clear one of people leaving high-tax, high-cost states for lower-tax, lower-cost alternatives.”[iii]
Continue Reading Leaving New York – But What About One’s New York Business?
September 2021
What was your month like?
If you’re a transactional professional – a class in which I include those who advise clients on the purchase and sale of businesses and investment assets, as well as those who assist clients in developing and implementing estate plans – it may be that the Earth’s 24-hour day, not to mention your own physical limitations, are preventing you from satisfying all your obligations as thoroughly and as quickly as you would like.[i]
Continue Reading Tax Hikes, Senator Manchin, and Effective Dates – OH MY!
Welcome to the Governor’s office, Ms. Hochul. Unfortunately, congratulations are hardly in order; indeed, a wish for good luck seems much more appropriate.
Continue Reading An Open Letter to the Incoming NY Governor, Kathy Hochul
NH vs MA
Last week, the U.S. Supreme Court denied New Hampshire’s request that the Court exercise its original jurisdiction under the Constitution[i] to hear and resolve a conflict involving the taxation by Massachusetts of income earned by certain residents of the Granite State.[ii]Continue Reading Like a Good Neighbor, New York is Still Free to Tax You – Sorry for the Inconvenience
Not Just Income Tax
Approximately two weeks ago, Gov. Cuomo and the New York State Legislature agreed upon a budget for the State’s 2021-2022 fiscal year. Although most businesses and their owners have understandably focused their attention on the increased personal and corporate income taxes[i] enacted under the budget legislation, there are several other provisions of which they should not lose sight.[ii]Continue Reading N.Y.’s Real Estate Transfer Tax, the 2022 Budget, and Responsible Person Liability
New York’s Governor Cuomo is having a bad 2021. Some may attribute this to his hubris or to karma; others may point to an emboldened, and now veto-proof,[i] progressive State Legislature; many will claim that Mr. Cuomo is paying the price for being out of touch with the electorate. Whatever the reason, his fall from “political grace” has been precipitous, and it has had immediate[ii] consequences for tax policy in New York, as manifested in the $212 billion budget agreement (the “Bill”) that the Governor announced last week.
Continue Reading New York Is Getting Out of the Zone, the Qualified Opportunity Zone, That Is
The New York state budget deal announced yesterday includes a workaround of the temporary federal limit on state and local tax deductions (the SALT cap). The provision was part of Gov. Cuomo’s initial budget proposal in January, and it comes at a time when many Democrats are calling on Pres. Biden to include the elimination of the SALT cap as part of his recently announced infrastructure proposal.
The SALT cap was added to the Internal Revenue Code as part of the Tax Cuts and Jobs Act (TCJA) in 2017. It is scheduled to lapse after 2025. Until then, however, joint filers may not claim more than $10,000 in itemized deductions for state and local tax payments for purposes of determining their federal income tax liability. This can be burdensome for New York residents, especially after the budget’s tax rate increases are enacted.
Last November, the IRS issued guidance in which it described an approved form of workaround based upon an entity-level state tax.
The New York budget provision is modeled on the above-referenced IRS notice, and would allow pass-through businesses to pay taxes at the entity level. The entity-level tax would be offset by a corresponding individual income tax credit.
Continue Reading New York Budget Deal Includes SALT Cap Workaround
According to Justice Learned Hand, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Stated differently, taxpayers have the right to pay only the amount of tax legally due.
Having said that, taxpayers have, over the years, demonstrated varying degrees of aversion to their tax obligations – especially in high-tax states like New York. Those New York taxpayers who are willing to “roll the dice” are hopefully aware of the associated audit risk, but many of them may be ignorant of the exposure they face from New York’s False Claims Act.Continue Reading Thinking About ‘Avoiding’ NY Tax Increases? Then Think About the False Claims Act
Are the rich making enough of a contribution to society? Are they bearing their fair share of taxes? Many New York legislators don’t think so.
Following the elections of November 2020, the State’s Democratic party secured a veto-proof supermajority not only in the Assembly, but also in the Senate.[i] This development was significant because, until then, the State’s chief executive, Governor Cuomo – ironically, also a Democrat – had been the major obstacle standing in the way of tax increases on the State’s businesses and on its wealthier residents.Continue Reading New York is Poised for Some Significant Tax Increases