Metro-North Commuter Railroad operates commuter trains in both New York and Connecticut and employs workers - on trains, in offices, and along its right-of-way - who perform duties in both states. How does section 7 of the Amtrak Reauthorization and Improvement Act of 1990, which bars a state other than an employee's residence state from taxing a rail employee's compensation if the employee performs 'regularly assigned duties... on a railroad in more than one State,' apply to Metro-North's four categories of employees, and what does 'regularly assigned' mean?

Subject

Issue raised by Petitioner, Metro-North Commuter Railroad, is how the application of the Amtrak Reauthorization and Improvement Act of 1990 affects employees traveling to more than one state during the course of their employment, including the meaning of the term "regularly assigned."

Plain-English summary

Metro-North Commuter Railroad operates commuter trains within New York State and Connecticut and employs workers who perform duties in both states - some on trains, some in offices, and some along the railroad's right-of-way. Many of these employees live in Connecticut. In 1990, Congress passed the Amtrak Reauthorization and Improvement Act (Pub. L. 101-322), which amended 49 U.S.C. § 11504 to bar any state other than an employee's state of residence from taxing a rail employee's compensation if the employee "performs regularly assigned duties... on a railroad in more than one State." The change applies to compensation paid on or after July 6, 1990. Metro-North asked the Department how this new federal rule applies to four categories of its workforce, and what "regularly assigned" actually means.

Metro-North described four employee categories: (A) employees who work on locomotives and travel between states while performing those duties, such as a conductor or engineer on the New Haven Line traveling between New York and Connecticut; (B) employees who perform all of their work in a state other than their home state, returning home only after their duties are finished; (C) employees who perform multi-state duties not on locomotives - the group previously covered by the prior law's separate clause for employees maintaining roadways, signals, communications, and structures, or operating motor trucks from railroad terminals; and (D) employees, such as claims agents or railroad police, who are neither locomotive workers nor roadway/structure-maintenance workers but who do regularly perform duties in more than one state. Metro-North also listed many job titles that might involve multi-state work, including nurses, instructors, safety inspectors, supervisors of various kinds, a Vice President of Operations, a Chief Mechanical Officer, purchasing agents, auditors, and accountants.

The Department held that a New York nonresident employee (under Tax Law § 605(b)(1)) who is paid for regularly assigned duties performed in New York and one or more other states has compensation, paid on or after July 6, 1990, that is not New York-source income and is not subject to New York income tax - even though services were performed in New York. The key term, "regularly assigned," turns on whether the employee's job description requires performing services in at least two states on a systematic basis, regardless of how the employee's time is actually split between locations. An employee with no standard route who is assigned duties in more than one state only randomly is not "regularly assigned" in multiple states. Applying this framework: nonresident employees in categories A, C, and D who are systematically assigned to duties in both New York and Connecticut are exempt from New York tax and withholding on compensation paid on or after July 6, 1990. But employees in those same categories who are assigned duties only randomly - even if their random assignments happen to cross into both states - do not qualify for the exemption, and their New York-performed compensation remains New York-source income under Tax Law § 631(b), fully taxable and subject to withholding. Category B employees, who perform all of their duties exclusively in New York (regardless of where they live), are not multi-state employees at all for this purpose; their compensation is simply New York-source income under § 631(b), with no ARIA exemption question even arising. The Department expressly declined to determine, from job titles alone, whether any particular employee's actual duties are systematic or random - it called that a question of fact beyond the scope of an Advisory Opinion under Tax Law § 171, subd. twenty-fourth, and 20 NYCRR § 901.1(a). Nonresident employees who do owe New York tax must file Form IT-203 and report their New York-source income, and must pay estimated tax if withholding is not otherwise required.

This March 18, 1991 opinion is the Department's original, first-in-time reading of how the Amtrak Reauthorization and Improvement Act applies to Metro-North's workforce, and it is broader than what came later: it recognizes all four employee categories - not just train/engine crews and Maintenance-of-Way workers - as potentially eligible for the exemption if their multi-state duties are systematic rather than random. A companion 1999 "Modified Advisory Opinions" letter later narrowed this reading, limiting the exemption to a smaller set of categories tied to train/engine service and Maintenance of Way work.

What this means for you

Interstate rail carriers with employees who cross state lines

If your railroad employs workers whose regular job duties - as reflected in their job description - require them to work in more than one state on a systematic basis, those nonresident employees' compensation for such work is not New York-source income and is not subject to New York tax or withholding, regardless of what percentage of their time is actually spent in New York. But this protection depends on the assignment being systematic, not just occasional or incidental; keep job descriptions and assignment records that clearly document a standard, recurring multi-state work pattern, since the Department will not resolve this factual question from job titles alone.

Railroad employees living in one state and commuting to work in another

If you are a nonresident employee whose entire job is performed in New York, living in Connecticut or another state, this opinion does not help you - your New York-source compensation remains fully taxable, because you are not a multi-state employee under the Act; you simply work in a different state than you live in. The ARIA exemption is aimed at employees whose duties themselves span state lines, not at employees who commute across a state line to a job located entirely on one side of it.

Payroll and tax professionals administering withholding for interstate rail employees

Before treating a nonresident employee's compensation as exempt from New York withholding under the Amtrak Reauthorization and Improvement Act, confirm that the employee's job description - not just an occasional multi-state trip - requires systematic performance of duties in more than one state. Employees assigned multi-state duties only randomly do not qualify for the exemption even if they happen to cross into New York and another state, and their New York-performed compensation remains subject to New York income tax and withholding under Tax Law § 631(b).

Common questions

Q: What does "regularly assigned" mean under the Amtrak Reauthorization and Improvement Act, as the Department interpreted it here?
A: An employee performs "regularly assigned" duties in more than one state if the employee's job description requires performing services in at least two states on a systematic basis, regardless of the percentage of time actually spent at each location. An employee with no standard route who is assigned multi-state duties only randomly does not meet this standard, even if some of that random work happens to occur in more than one state.

Q: Does the exemption depend on how much time an employee actually spends in each state?
A: No. The opinion is explicit that the "regularly assigned" test looks at whether the job description systematically requires multi-state work, not at the percentage of time spent in each location. An employee who is systematically assigned to duties in both New York and Connecticut qualifies for the exemption regardless of that time split.

Q: Are all of Metro-North's employees who happen to work in more than one state covered by the exemption?
A: No. Only nonresident employees in categories A, C, and D (locomotive workers, non-locomotive multi-state workers formerly covered by the roadway/structures clause, and other employees like claims agents or railroad police who regularly work in more than one state) can qualify, and even then only if their multi-state duties are assigned systematically rather than randomly. Category B employees, who perform all of their duties exclusively in New York, are not multi-state employees at all and are simply taxable on their New York-source compensation.

Q: Can the Department determine from a list of job titles which employees are "regularly assigned" to multiple states?
A: No. The Department expressly stated that whether a given employee's duties are systematically or randomly assigned across states is a factual question that cannot be resolved from occupation titles alone, and such factual determinations are outside the scope of what an Advisory Opinion can decide under Tax Law § 171, subd. twenty-fourth, and 20 NYCRR § 901.1(a).

Q: What must a nonresident employee do if their compensation remains subject to New York tax?
A: They must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, and report their New York-source income. If New York withholding is not required on that compensation, the employee must instead pay estimated tax.

Q: Is this the final word on how the Act applies to Metro-North's employees?
A: No. This March 1991 opinion reflects the Department's original, broader reading of the exemption, covering all four employee categories described here. A later, 1999 "Modified Advisory Opinions" letter narrowed this reading, limiting the exemption to a smaller set of employee categories centered on train/engine service and Maintenance of Way work.

Citations and references

• 49 U.S.C. § 11504, as amended by section 7 of the Amtrak Reauthorization and Improvement Act of 1990 (Pub. L. 101-322) - bars any state other than an employee's residence state from taxing compensation of a rail employee who performs regularly assigned duties on a railroad in more than one state, effective for compensation paid on or after July 6, 1990
• Tax Law § 605(b)(1) - defines who is a New York nonresident individual for personal income tax purposes
• Tax Law § 631(b) - taxes a nonresident's New York-source income, including compensation for services performed in New York
• Tax Law § 171, subd. twenty-fourth - limits Advisory Opinions to the facts presented and bars them from resolving factual questions
• 20 NYCRR § 901.1(a) - implementing regulation confirming that Advisory Opinions apply statutory and regulatory provisions to a specified set of facts, not undetermined facts

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1991.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a91_3i.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-91 (3) I
Income Tax
March 18, 1991

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. I910118A

On January 18, 1991, a Petition for Advisory Opinion was received from
Metro-North Commuter Railroad, 347 Madison Avenue, New York, New York 10017.
The issue raised by Petitioner, Metro-North Commuter Railroad, is how the
application of the Amtrak Reauthorization and Improvement Act of 1990
(hereinafter the "Act") affects employees traveling to more than one state during
the course of their employment, including the meaning of the term "regularly
assigned" as applied to the provisions of the Act.
Petitioner operates commuter train service within New York State and
Connecticut. Petitioner employs a number of employees who perform work in both
states, some of whom perform this work on trains and some of whom perform this
work in offices or along Petitioner's right-of-way.
Many of Petitioner's
employees are residents of Connecticut.
Federal Public Law 101-322, the Act, amended various provisions of Title
49 of the United States Code relating to state and local taxation of compensation
paid to employees of interstate rail carriers, interstate motor carriers and
interstate motor private carriers and applies to compensation paid on or after
July 6, 1990.
Section seven of the Act amends section 11504 of Title 49 of the United
States Code with regard to a rail carrier providing transportation subject to the
jurisdiction of the Interstate Commerce Commission under Subchapter I of Chapter
105 of such Title 49 and states, in pertinent part, that:
No part of the compensation paid by a rail carrier. . .to an
employee who performs regularly assigned duties as such an employee
on a railroad in more than one State shall be subject to the income
tax laws of any State or subdivisions of that State, other than the
State or subdivision thereof of the employee's residence ...
(emphasis added),
Petitioner has four categories of employees for which it wants an opinion
as to whether they are covered by section seven of the Act:
A.

Employees who perform work on locomotives and who travel between
states while performing such duties.
For example, a railroad
conductor or engineer who works on Metro-North's New Haven Line
performing duties on a locomotive, who travels back and forth from
New York to Connecticut during the performance of his or her duties.

B.

Employees who perform all of their work in a state other than their
residence returning to their resident state only when their duties
are finished.

TP-9 (9/88)

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TSB-A-91 (3) I
Income Tax
March 18, 1991

C.

Employees who perform duties, not on locomotives, in more than one
state, who were previously covered by the section of the law which
covered employees: "maintaining roadways, signals, communications
and structures or in operating motor trucks from railroad
terminals."

D.

Employees, such as claims agents, railroad police, etc., who do not
perform their duties on locomotives and are not employees
"maintaining roadways, signals, communications and structures or in
operating motor trucks from railroad terminals" but who do regularly
perform their duties in more than one State.

The following is a partial list of occupations that may require an
individual to perform work in more than one state for Petitioner.
nurse
instructor
safety inspector
material/storehouse
supervisor
Vice President of Operations
janitor
station supervisor
custodial supervisor
yardmaster
Chief Mechanical Officer

mechanical supervisor
mechanical inspector
purchasing agent
engineering supervisor
construction supervisor
transportation
supervisor
trial officer
traveling auditor
revenue accountant
revenue supervisor
marketing manager

If an employee of Petitioner is not a resident of New York State for
personal income tax purposes under section 605(b)(1) of the Tax Law, and such
employee is paid compensation for regularly assigned duties performed in New York
State and one or more other states, the compensation paid on or after July 6,
1990 does not constitute income derived from New York State sources and is not
subject to New York State income tax, even though the employee performed services
in New York State.
When applying the provisions of the Act for New York State income tax
purposes, such an employee is considered to be performing "regularly assigned"
duties in more than one state if such employee's job description requires the
employee to perform services in at least two states on a systematic basis
regardless of the percentage of time spent at each location. If an employee has
no standard route and is assigned duties in more than one state on a random
basis, that employee would not be considered to be performing "regularly
assigned" duties in more than one state.
Accordingly, with respect to New York nonresident employees referred to in
categories A, C and D above, the employees who are regularly assigned to perform
duties both in New York State and Connecticut, the compensation paid on or after
July 6, 1990 for the performance of such duties will not be subj-ect to New York
State income tax. Therefore, such compensation paid on or after July 6, 1990 is
not subject to New York State withholding requirements.
With respect to New York nonresident employees referred to in categories
A, C and D who are assigned duties on a random basis, even if duties are
performed in New York State and Connecticut, such employees shall not meet the

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TSB-A-91 (3) I
Income Tax
March 18, 1991

requirements of section seven of the Act exempting such employees from New York
State income tax. The compensation paid to such an employee on and after July 6,
1990 for duties performed in New York State constitutes income from New York
sources pursuant to section 631(b) of the Tax Law. Such compensation is subject
to New York State income tax and New York State withholding requirements.
With respect to the New York nonresident employees referred to in category
B who perform their duties exclusively in New York State, the compensation paid
on or after July 6, 1990 for the performance of such duties constitutes income
from New York State sources pursuant to section 631(b) of the Tax Law. Such
compensation is subject to New York State income tax and New York State
withholding requirements.
The determination of whether an employee is "regularly assigned" duties to
be performed in New York State and one or more other states cannot be made from
the occupation titles listed herein. Such question is a factual matter not
susceptible of determination in an advisory opinion. An advisory opinion merely
sets forth the applicability of pertinent statutory and regulatory provisions to
a ,'specified set of facts".
Tax Law, §171, subd twenty-fourth, 20 NYCRR
901.1(a).
It should be noted, that New York nonresident employees who receive
compensation subject to New York State income tax are required to file Form IT­
203, Nonresident and Part-Year Resident Income Tax Return, and report to New York
any items on income derived from or connected with New York sources. If tax is
not required to be withheld, estimated tax is required to be paid.

DATED: March 18, 1991

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.