If I'm domiciled in New Jersey but buy a fractional, one-eighth ownership interest in a private residential club in New York City, does that ownership alone make me a New York State statutory resident for income tax purposes?

Plain-English summary

Petitioner is domiciled and resident in New Jersey, where he maintains a permanent place of abode. He commutes to a New York City workplace and, for purposes of this Advisory Opinion, is assumed to spend more than 183 days a year in New York. He was considering buying an ownership interest in "The Club," a private, member-owned residential building offering studio, one-, and two-bedroom luxury apartments. Each member owns a one-eighth tenancy-in-common deeded fee interest in one of the residences (recorded and title-insured), plus the furnishings, and can sell or transfer that interest subject to the Club's Declarations and Bylaws.

Ownership in The Club does not translate into unlimited personal use. Each member has a priority right to use a residence for only 45 days a year; beyond that, access depends on a first-come, first-served reservation system - one Annual Visit of up to 7 days, plus additional Reserved Visit (up to 7 days each) and Short-Notice (up to 3 days each) reservations, capped at two Reserved Visits and one Short-Notice reservation outstanding at a time. Day use of amenities is available to owners and their guests, except that the athletic facility is limited to owners or unaccompanied guests actually in residence.

Petitioner asked whether this ownership interest, by itself, would cause him to be "maintaining a permanent place of abode" in New York - the second prong (along with the 183-day count) of the statutory residency test in Tax Law § 605(b)(1)(B). The Department explained that the key question under 20 NYCRR 105.20(a)(2) and case law is whether the taxpayer has free and continuous access to the residence for substantially all of the taxable year (generally more than 11 months), not whether he holds legal title. It contrasted a case where unrestricted access to a room made a taxpayer a statutory resident (Evans) with cases where access limited by scheduling, notice requirements, or shared/rotating use did not (Moed, Knight).

Because Petitioner's use of The Club was capped at a 45-day priority period and further constrained by a first-come, first-served reservation system and other members' competing priority rights, the Department concluded he lacked "free and continuous access" to a Club residence. Accordingly, his ownership interest in The Club would not, by itself, cause him to be deemed to be maintaining a permanent place of abode in New York for income tax purposes.

What this means for you

Buyers of fractional or shared-use New York properties

If you're considering a fractional ownership interest, timeshare, or club membership that gives you access to a New York residence for only part of the year, owning the property does not by itself make you a statutory resident. What matters is whether your actual access is free and continuous for substantially all of the year (generally more than 11 months), not the form of your ownership interest.

Commuters who already meet the 183-day count

Statutory residency requires both prongs of Tax Law § 605(b)(1)(B): more than 183 days present in New York and a permanent place of abode maintained here. Meeting the day count alone (as Petitioner was assumed to do) does not create residency if your only New York living arrangement is a restricted-access one like a club membership subject to priority-use limits and a reservation system.

Common questions

Q: Does owning real property in New York automatically make a nonresident commuter a statutory resident?
A: No. Ownership alone isn't the test; the Department looks at whether the taxpayer has free and continuous access to a residence for substantially all of the taxable year under 20 NYCRR 105.20(a)(2).

Q: How did The Club differ from the rectory room in the Evans case?
A: In Evans, the taxpayer had unrestricted, ongoing access, exclusive use of his room, provided his own furnishings, and regularly used it for his job - even without any legal interest in the property. Petitioner's access to The Club, by contrast, was capped at 45 priority days per year and further limited by a first-come, first-served reservation system, so it lacked that free and continuous access.

Q: Why did the Department compare this case to Moed and Knight instead?
A: In both Moed and Knight, the taxpayers' use of a New York apartment was conditioned on notice, scheduling, or sharing with others, and the Tribunal found no free and continuous access, so no permanent place of abode existed. The Department found Petitioner's Club access - subject to priority-day limits and reservation rules - similarly restricted.

Q: Does this mean the 183-day test didn't matter here?
A: It was simply assumed as a given fact for purposes of the opinion. This ruling only resolved the separate "permanent place of abode" prong; both prongs must be satisfied for someone to be a statutory resident.

Q: Could different usage of the same club produce a different answer?
A: Yes. This is a facts-specific advisory opinion binding only on the Petitioner. A member with materially greater or less restricted access - closer to the unrestricted access described in Evans - could be analyzed differently.

Citations and references

• Tax Law § 605(b)(1)(B) - defines a "resident individual" as someone not domiciled in New York who maintains a permanent place of abode here and is present more than 183 days in the taxable year
• 20 NYCRR 105.20(a)(2) - a permanent place of abode must be maintained for substantially all of the taxable year (generally more than 11 months)
• Matter of John M. Evans v. Tax Appeals Tribunal, 199 A.D.2d 840 (N.Y. App. Div. 3d Dep't 1993) - unrestricted, free and continuous access to a rectory room constituted maintaining a permanent place of abode
• Matter of Leon Moed (N.Y. Tax Appeals Tribunal, Jan. 26, 1995, DTA No. 810997) - occasional, notice-conditioned access to an estranged wife's apartment was not free and continuous access
• Matter of Craig F. Knight (N.Y. Tax Appeals Tribunal, Nov. 9, 2006, DTA No. 819485) - intermittent, notice-conditioned access to others' apartments did not constitute a permanent place of abode

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_2012.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a12_4i.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-12(4)I
Income Tax
August 28, 2012

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I120308A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
Name Redacted Address Redacted. Petitioner asks whether his ownership interest in a private,
member-owned residential club in New York City (“The Club”) qualifies as Petitioner’s
“maintaining a permanent place of abode” in New York for purposes of determining New York
State residency for New York income tax purposes.
We conclude that Petitioner will not be deemed to be “maintaining a permanent place of
abode” in New York solely by reason of his ownership interest in The Club.
Facts
Petitioner is a domiciliary and resident of New Jersey where he maintains a permanent place
of abode. He regularly commutes to his workplace in New York City and, for purposes of this
Advisory Opinion, is assumed to be present in New York for more than 183 days in each taxable
year.
In addition to his New Jersey home, Petitioner is considering purchasing an ownership
interest in The Club, which offers studio, one- and two-bedroom luxury apartments. Each member
in The Club owns a one-eighth tenancy-in-common deeded fee interest in one of The Club’s
residences. Ownership is evidenced by a real estate deed that is recorded and is guaranteed by a
title insurance policy. Members also own the furnishings and accessories in the residences which
include bedding, linens, kitchen utensils, cookware, flatware and silverware. Like any other form of
real estate in New York, the ownership interest can be sold or transferred by the owner, subject to
The Club and Condominium Declarations and Bylaws.
Each member has a priority right to use a residence for 45 days per year, but there is no limit
to the amount of use. If some members do not use a residence for their 45 days, then other
members may be able to use a residence for more than their 45 allotted priority days. Pursuant to
The Club’s Policies and Procedures, each member may reserve one Annual Visit for up to 7 days
during The Club’s year. In addition, each member may make any number of Reserved Visit
reservations for up to 7 days each and Short-Notice reservations for up to 3 days each throughout
the year, provided that a member may not have more than two Reserved Visit reservations and one
Short-Notice reservation outstanding at any given time. The reservations are given on a first-come,
first-served basis, subject to the other members’ priority rights to use a residence for 45 days.
Additional rules permit an owner to reserve an available residence in a different Club residence
category if no residences are available in such owner’s residence type. Owners and guests
accompanied by an owner have day use of The Club’s amenities and services except the athletic

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Income Tax
August 28, 2012

facility (Athletic Facility) in The Club which is available to owners or unaccompanied guests only
when they are in residence. The Club has a right to limit day use, and as such, day use of The Club
is subject to availability and priority usage rights assigned to owners and/or guests lodging at The
Club.
Analysis
Section 605(b)(1)(B) of the Tax Law defines a “resident individual” as an individual who is
not domiciled in this state but maintains a permanent place of abode in this state and spends in the
aggregate more than one hundred eighty-three days of the taxable year in this state, unless such
individual is in active service in the armed forces of the United States. In order for a taxpayer to be
considered maintaining a permanent place of abode, the taxpayer must maintain the abode for
substantially all of the taxable year (generally considered to be more than 11 months). 1
Whether or not the taxpayer has free and continuous access to a place of abode is a primary
consideration in determining if the taxpayer maintains a permanent place of abode for substantially
all of the taxable year. In the Matter of John M. Evans v. Tax Appeals Tribunal of the State of
New York et al., 199 A.D.2d 840 (N.Y. App. Div. 3rd Dep’t 1993), the Appellate Division affirmed
the Tribunal’s determination that the taxpayer’s unrestricted right to use a room in a rectory
constituted maintaining a permanent place of abode, despite the fact that the taxpayer had no legal
right or relationship to the property. While the Tribunal recognized that the determination of
whether a taxpayer is maintaining a permanent place of abode is based on a variety of factors, the
Tribunal ultimately found that the taxpayer’s use of the residence constituted maintaining a
permanent place of abode, because the taxpayer contributed to the household expenses, had
exclusive use of his room, provided his own furnishings and personal effects, regularly used the
residence for a long-standing period of time to access his full time job, and had unlimited access to
his room and other rooms in the residence.
Conversely, in the Matter of the Petition of Leon Moed (Tax Appeals Tribunal, January 26,
1995, DTA No. 810997), the Tribunal found that the petitioner did not maintain a permanent place
of abode in New York as a result of his ability to occasionally stay at his wife’s New York City
apartment after their marital separation, when she was in residence and with prior notice to his wife.
Unlike Evans, the Tribunal found no evidence of a shared rental. The wife paid all the expenses on
the apartment. There was no evidence indicating any connection between the petitioner’s informal
marital separation agreement to pay money to his wife and his ability to use the apartment, and no
connection between his purchase of some furniture for the apartment prior to their separation and
his subsequent use of the apartment. Because the petitioner did not have “free and continuous
access to the apartment,” the Tribunal found that he did not maintain a permanent place of abode in
New York for the tax years in issue.
In the Matter of Craig F. Knight (Tax Appeals Tribunal, November 9, 2006, DTA No.
819485), the Tribunal concluded that the factors found significant by the Appellate Decision in
Evans were lacking in Knight. Mr. Knight was domiciled in New Jersey but worked in New York.
1

20 NYCRR 105.20(a)(2).

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He had access intermittently to both an apartment rented and maintained by another individual and
also a two-bedroom apartment rented to the business in which he worked. With regard to the
individual’s apartment, Mr. Knight could not access the apartment without prior notice; he did not
maintain clothing, personal articles or furniture in the apartment; he did not have a dedicated room
to which he had free and continuous access; he did not use the residence for daily attendance at his
full-time job; and he did not share in the expenses of maintaining the apartment. The Tribunal also
found that the factors in Evans were not present for Mr. Knight’s use of the business’s apartment,
except to the extent that he bore a proportionate share of the expenses by reason of being a part
owner of the business. The business apartment was used intermittently by the three members of the
business, each of whom had a key, and there was no agreement among them as to the usage. Thus,
the petitioner was found not to be maintaining a permanent place of abode.
In the case at hand, Petitioner’s right to use a residence is subject to the Club’s Policies and
Procedures, which restrict his access. Although there is no absolute limit to the amount of use, each
member has a priority right to use a residence for only 45 days per year. The reservations are given
on a first-come, first-served basis, subject to the other members’ priority rights to use a residence
for 45 days, and members are limited in the number of reservations they may make at any given
time. Owners and guests accompanied by an owner have day use of The Club’s amenities and
services except the Athletic Facility which is available to owners or unaccompanied guests only
when they are in residence. The Club has a right to limit day use, and as such, day use of The Club
is subject to availability and priority usage rights assigned to owners and/or guests lodging at The
Club.
Petitioner is one of many people using the residence at The Club and, with the exception of
an Annual Visit and priority days, use of the residence is awarded on a first-come, first-served basis.
His access is circumscribed by The Club’s Policies and Procedures. Like the taxpayer in Moed,
Petitioner did not have “free and continuous access to the apartment” and thus he did not maintain a
permanent place of abode in New York for New York income tax purposes solely by reason of his
ownership in The Club.

DATED: August 28, 2012

NOTE:

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts
set forth therein and is binding on the Department only with respect to the person or
entity to whom it is issued and only if the person or entity fully and accurately describes
all relevant facts. An Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific time period at
issue in the Opinion. The information provided in this document does not cover every
situation and is not intended to replace the law or change its meaning.