Price Waterhouse asked New York, on behalf of a Nebraska-domiciled employee called Mr. A, whether Mr. A remains a nonresident of New York for personal income tax purposes when a fixed 4-year employment contract requires him to work in New York City and use a company apartment there for more than 183 days a year.

Plain-English summary

Price Waterhouse asked the Department, on behalf of a client anonymized as "Mr. A," whether Mr. A would be taxed as a New York nonresident despite spending a lot of time working in New York City. Mr. A, 66 years old, was domiciled in Nebraska and intended to stay domiciled there. He signed a four-year employment contract with a U.S. corporation headquartered in New York City that also had an office in Omaha, Nebraska. Under the contract Mr. A split his working days between the New York and Nebraska offices, using a company-provided apartment in New York City whenever he was there, and he expected to spend more than 183 days each year in New York. At the end of the four years - or sooner, if certain performance goals were met - he planned to retire and return permanently to Nebraska. In the meantime he kept extensive, concrete ties to Nebraska: his home (where his wife continued to live), his federal tax return address, his voter registration, his driver's license, his estate-planning documents reciting Nebraska domicile, his bank accounts and safe-deposit box, and his address for other personal correspondence.

New York's residency rules turn on two things: domicile, and "statutory residency." Under Tax Law § 605(b)(1), someone not domiciled in New York can still be taxed as a full resident if they (1) maintain a "permanent place of abode" in New York and (2) spend more than 183 days of the year there. Both conditions have to be met - the 183-day count only matters if there's a permanent place of abode in the first place. Reg. § 105.20(e)(1) explains that a dwelling isn't "permanent" if it's kept only for a temporary stay to accomplish a particular purpose, and the regulation gives almost exactly Mr. A's situation as its own example: an out-of-state employee assigned to the employer's New York office for a fixed, limited period, who will return to their permanent location afterward, does not become a resident merely by keeping a New York apartment during that period and spending over 183 days there each year. That person is still taxed only as a nonresident, on New York-source income such as salary for services performed in New York. The regulation contrasts this with an open-ended New York assignment (no fixed end date), where the New York apartment would count as a permanent place of abode and trigger full resident taxation once the 183-day threshold is crossed.

Applying that framework, the Department concluded that Mr. A's New York apartment was not a permanent place of abode, because his New York assignment was for a fixed and limited four-year term after which he would retire and return to Nebraska. As a result, Mr. A remains a nonresident of New York for personal income tax purposes for the whole four-year contract, regardless of how many days over 183 he spends in New York each year, and is taxed only on his New York-source income rather than his worldwide income.

This fact pattern turns out to be a recurring one in the Department's advisory opinions. A later 1994 opinion informally known as the "Harper" opinion involves an almost identical set of facts - a Nebraska-domiciled, 66-year-old employee on a fixed four-year contract with a New York City/Omaha-headquartered corporation, given a company New York City apartment and spending 183+ days a year in New York while keeping strong Nebraska domicile ties - and reaches the same nonresident conclusion. This opinion is itself cited by name in at least one further Department advisory opinion dealing with a similar fixed-term-assignment scenario (a law-firm managing partner on a fixed multi-year out-of-state assignment), which lists "Price Waterhouse, TSB-A-93(12)I" as precedent for treating a fixed-term New York assignment as not creating a permanent place of abode.

What this means for you

Out-of-state executives and professionals on a fixed-term New York assignment

If your employer sends you to a New York office under an assignment with a defined end date - a set contract term, a specific project, or a fixed number of years after which you return home - keeping a New York apartment during that assignment does not by itself make you a New York resident, even if you spend well over 183 days a year there. What matters is that the assignment has a fixed and limited duration and that you will return to your permanent home afterward. It also helps to keep and document concrete ties to your home state, as Mr. A did: your residence, voting registration, driver's license, estate-planning documents, bank accounts, and mailing address for personal correspondence. You will, however, still owe New York nonresident tax on the New York-source income you earn from services performed there.

Tax professionals distinguishing "temporary" from open-ended New York assignments

When advising a client on an out-of-state assignment to a New York office, the threshold question is whether the assignment has a fixed and limited end point. If it does, Reg. § 105.20(e)(1)'s temporary-stay exception keeps the New York dwelling from being a "permanent place of abode," so the 183-day statutory-residency test in Tax Law § 605(b)(1) never gets triggered regardless of day count. If the assignment is open-ended - no defined end date - the New York apartment is treated as a permanent place of abode from the start, and crossing 183 days in New York for that year will make the client a full statutory resident taxed on worldwide income. Documenting the fixed nature of the assignment (contract term, performance-based early-exit triggers, a firm plan to return) is central to supporting nonresident treatment.

Common questions

Q: Why doesn't spending more than 183 days a year in New York make Mr. A a resident?
A: The 183-day count only matters once someone maintains a "permanent place of abode" in New York in the first place. Because Mr. A's New York apartment was kept only for a fixed, limited four-year assignment, it never became a "permanent place of abode" under Reg. § 105.20(e)(1), so the 183-day test in Tax Law § 605(b)(1) never comes into play for him.

Q: What would change if Mr. A's New York assignment had no fixed end date?
A: Under Reg. § 105.20(e)(1), an assignment that isn't for a fixed or limited period means the New York apartment is deemed a permanent place of abode from the outset. In that scenario, spending more than 183 days a year in New York would make Mr. A a full statutory resident, taxed on his worldwide income rather than only his New York-source income.

Q: What New York income is Mr. A still taxed on as a nonresident?
A: As a nonresident, Mr. A is taxable only on his New York-source income, including his salary or other compensation for the services he performs while working in New York. He is not taxed by New York on his non-New York-source income.

Q: Does keeping strong ties to Nebraska matter to this outcome?
A: The opinion notes Mr. A's Nebraska home, voter registration, driver's license, estate documents, bank accounts, and mailing address as part of the facts, but the Department's conclusion turns specifically on the fixed, limited nature of the four-year New York assignment under Reg. § 105.20(e)(1) - not on a general domicile analysis, since Mr. A's Nebraska domicile was not itself in dispute.

Q: Does an early exit tied to performance goals change the analysis?
A: No. The contract allowed Mr. A to retire and return to Nebraska early if certain performance goals were met, but the assignment was still bounded by a maximum fixed term of four years with a defined return to Nebraska, which is what kept the New York apartment from becoming a permanent place of abode.

Citations and references

• Tax Law § 605(b)(1) - defines a "resident individual" as someone domiciled in New York, or someone not domiciled in New York who maintains a permanent place of abode there and spends more than 183 days of the year in New York
• Tax Law § 605(b)(2) - defines a "nonresident individual" as anyone who is not a resident or part-year resident
• Reg. § 105.20(e)(1) - a place of abode is not "permanent" if maintained only during a temporary stay for the accomplishment of a particular purpose, including a fixed-and-limited out-of-state employer assignment to a New York office

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1993.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a93_12i.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-93 (12) I
Income Tax
November 9, 1993

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

PETITION NO. I930824A

On August 24, 1993, a Petition for Advisory Opinion was received from Price
Waterhouse, 1177 Avenue of the Americas, New York, New York 10036.
The issue raised by Petitioner, Price Waterhouse, is whether, under the
following set of facts, a taxpayer is treated as a nonresident for personal
income tax purposes under section 605(b)(2) of the Tax Law.
The taxpayer, Mr. A, is domiciled in the state of Nebraska and will
maintain his domicile there. He has entered into an employment contract with a
United States corporation which has is principal executive office in New York
City. The corporation also maintains an office in Omaha, Nebraska. Mr. A's
employment contract is for a period of four years. Mr. A is currently 66 years
old and when the contractperiod terminates, he will retire, resign his employment
and return to Nebraska. In addition, if certain goals are achieved prior to the
end of the contract Mr. A plans to retire, resign his employment and return to
Nebraska at that time.
During the term of his contract, Mr. A will split working days between his
New York office and his office in Nebraska. When in New York he will be given
the use of a company apartment located in New York City. During each of the
years Mr. A will spend more than 183 days in New York.
With respect to his current domicile in Nebraska, Mr. A will: (1) keep his
Nebraska home where his wife will continue to live; (2) file his US income tax
return with his Nebraska address;
(3) vote in Nebraska;
(4) maintain his
Nebraska driver's license;
(5) maintain Nebraska estate documents reciting
Nebraska as domicile; (6) retain all significant bank accounts and his safety
deposit box in Nebraska; (7) retain his Nebraska address for all other personal
items such as credit card billings and his passport address.
Section 605(b)(1) of the Tax Law provides that a resident individual means
an individual who is domiciled in New York State or who is not domiciled in New
York State but maintains a permanent place of abode in New York State and spends
in the aggregate more than 183 days of the taxable year in New York State.
Section 605(b)(2) of the Tax Law provides that a nonresident individual
means an individual who is not a resident or a part-year resident.
Section 105.20(e)(1) of the Personal Income Tax Regulations provides as
follows:
A permanent place of abode means a dwelling place permanently
maintained by the taxpayer, whether or not owned by such taxpayer
... [A] place of abode, whether in New York State or elsewhere, is
not deemed permanent if it is maintained only during a temporary
stay for the accomplishment of a particular purpose. For example,
TP-9 (9/88)

-2­

TSB-A-93 (12) I
Income Tax
November 9, 1993

an individual domiciled in another state may be assigned to such
individual's employer's New York State office for a fixed and
limited period, after which such individual is to return to such
individual's permanent location. If such an individual takes an
apartment in New York State during this period, such individual is
not deemed a resident, even though such individual spends more than
183 days of the taxable year in New York State, because such
individual's place of abode is not permanent. Such individual will,
of course, be taxable as a nonresident on such individual's income
from New York State sources, including such individual's salary or
other compensation for services performed in New York State.
However, if such individual's assignment to such individual's
employer's New York State office is not for a fixed or limited
period, such individual's New York State apartment will be deemed a
permanent place of abode and such individual will be a resident for
New York State personal income tax purposes if such individual
spends more than 183 days of the year in New York State. The 183­
day rule applies only to taxpayers who are not domiciled in New York
State.
Herein, Mr. A is domiciled in Nebraska and has entered into a four year
employment contract with a corporation with offices in New York City and Omaha,
Nebraska.
Mr. A will spend time in both locations and will spend in the
aggregate more than 183 days of each of the taxable years in New York State. Mr.
A will maintain his domicile in Nebraska and when in New York City he will be
given the use of a company apartment located in New York City.
When the
employment contract expires in four years, or less, Mr. A will retire, resign his
employment and return to Nebraska.
Pursuant to section 605(b)(2) of the Tax Law and section 105.20(e) of the
Personal Income Tax Regulations, Mr. A will be a nonresident individual of New
York State for the duration of his four employment contract because Mr. A will
not maintain a permanent place of abode in New York State during such period.
Mr. A's place of abode in New York City is not maintained by him and it is not
permanent because Mr. A's employment in New York City is of a fixed and limited
period of four years.

DATED: November 9, 1993

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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