If an out-of-state law firm partner signs a fixed 4-year agreement to serve as managing partner of the firm's New York office, keeps offices in both locations, spends over 183 days a year in New York, and uses a firm-paid New York City apartment, is he a New York resident for tax purposes during those four years?

Subject

Whether Mr. A., a partner in a law firm headquartered in State X, will be a nonresident of New York under Tax Law § 605(b)(2) and 20 NYCRR § 105.20(e) for the duration of his four-year agreement to serve as managing partner of the firm's New York office.

Plain-English summary

Mr. A. is a partner in a law firm headquartered in "State X" with offices in other states, including New York, and abroad. He is domiciled in State X and will keep that domicile. He signed a four-year agreement to become the managing partner of the firm's New York office, running its day-to-day operations, and will have an office in New York during that time. But he will also keep substantial management and client-relationship responsibilities in State X, keep an office there, and split his working days between the two locations. When the four years end, he will return to State X to practice law there exclusively.

During the assignment Mr. A. may spend more than 183 days a year in New York. His firm gives him a furnished New York City apartment - leased in his name, but with the firm paying the rent, security deposit, and real-estate commission; he only pays the utilities, as a matter of convenience. Throughout the four years he keeps virtually every traditional marker of his State X domicile: his house there (partly used by his wife), his federal tax return address, his voter registration, leased recreational property, driver's license, vehicle registration and garaging, country-club and social-club memberships, estate documents reciting State X domicile, and his address of record for credit cards and his passport. His grown children live in State X (one is temporarily elsewhere for a two-year degree program but is expected to return), and his significant personal property, such as artwork and collectibles, stays in State X.

The Department held that Mr. A. will be a nonresident of New York for the entire four-year term. Tax Law § 605(b)(1) makes someone a "resident individual" either by being domiciled in New York, or - if not domiciled in New York - by maintaining a "permanent place of abode" in New York and spending more than 183 days a year there (statutory residency); § 605(b)(2) defines a "nonresident" as anyone who is neither of those. Under 20 NYCRR § 105.20(e)(1), a dwelling isn't a "permanent place of abode" if it's maintained only during a temporary stay for a particular purpose - and the regulation's own example is an employee assigned by an out-of-state employer to a New York office for a fixed and limited period who will return to their permanent location afterward: that person isn't a resident even at 183+ days, because the New York apartment isn't permanent. (The regulation contrasts this with an open-ended assignment, where the apartment would become a permanent place of abode.)

The Department applied its own directly-on-point precedent, Charles N. Harper (TSB-A-94(3)I) - a Nebraska domiciliary with a four-year dual-office New York/Omaha employment contract and a company-provided New York City apartment, held not to be a New York resident because the four-year assignment was fixed and limited - along with a similar precedent, Price Waterhouse (TSB-A-93(12)I). Because Mr. A.'s law-firm assignment is likewise for a fixed four-year term after which he returns to State X to practice exclusively, his New York City apartment is not a permanent place of abode. So regardless of spending more than 183 days a year in New York during those four years, he remains a nonresident of New York throughout the entire assignment under Tax Law § 605(b)(2) and 20 NYCRR § 105.20(e).

What this means for you

Professionals on fixed-term, multi-year out-of-state assignments

If your employer sends you to New York on an assignment with a genuine, definite end date - even one lasting several years - and you intend to return to your home state afterward, an employer-provided or employer-paid New York apartment does not automatically make you a New York statutory resident, even if you spend more than 183 days a year there. What matters is that the assignment is fixed and limited in duration and that you actually maintain your ties to your home-state domicile throughout: your house, driver's license, vehicle registration, voter registration, club memberships, estate-planning documents, and mailing addresses for things like credit cards, tax returns, and your passport. The more of these you keep pointed at your home state, and the more concretely your assignment has a defined end and return plan, the stronger your position that the New York apartment is only a temporary stay for a particular purpose, not a permanent abode.

Accountants and tax professionals evaluating statutory-residency exposure for temporary assignees

When assessing whether a client on a multi-year New York assignment risks statutory residency, focus first on whether the assignment has a fixed and limited term with a documented return plan, not just on the number of New York days or the length of the assignment. A four-year term did not defeat the "temporary stay for a particular purpose" exception here, following Harper's identical four-year fact pattern. Also confirm that the client retains substantial ties and responsibilities outside New York during the assignment (here, an office, management duties, and client relationships in State X) and has not abandoned the traditional indicia of domicile - housing, licensing, registration, voting, memberships, and address of record. Where those facts hold up, the New York apartment - even if leased in the client's own name and used 183+ days a year - should not by itself convert the client into a New York resident.

Common questions

Q: Doesn't a four-year assignment sound too long to be "temporary"?
A: Not under this line of rulings. What controls is whether the assignment is for a "fixed and limited period" with a genuine return afterward, not its raw length. The regulation's own example and the Harper precedent both involve four-year assignments, and both were treated as temporary because the term was fixed and the individual was set to return to their prior location when it ended.

Q: Mr. A. spent more than 183 days a year in New York and used an apartment there - why didn't that make him a statutory resident?
A: The 183-day/permanent-place-of-abode test in Tax Law § 605(b)(1) only makes someone a resident if both elements are present. Under 20 NYCRR § 105.20(e)(1), a place of abode used only during a temporary stay for a particular purpose - like a fixed-term employer assignment - isn't "permanent." Without a permanent place of abode, the 183-day count alone doesn't create residency.

Q: What indicia of domicile mattered most in this ruling?
A: The Department pointed to Mr. A. keeping essentially every traditional marker of State X domicile throughout the assignment: his house, his federal tax return address, voter registration, leased recreational property, driver's license, vehicle registration and garaging, country-club and social-club memberships, estate documents reciting State X domicile, and his address of record for credit cards and his passport. Keeping an office and substantial management/client responsibilities in State X, and having his children and significant personal property remain there, reinforced that State X - not New York - stayed his true home base.

Q: Would the answer change if Mr. A.'s New York assignment had no set end date?
A: Yes. The regulation expressly distinguishes a fixed and limited assignment from one that is open-ended: if the New York assignment isn't for a fixed or limited period, the New York apartment is deemed a permanent place of abode, and the individual becomes a resident once they spend more than 183 days a year there.

Q: Does it matter that the apartment was leased in Mr. A.'s own name rather than the firm's?
A: No. The Department focused on who bore the economic obligations and the purpose of the arrangement, not the name on the lease. The firm paid the rent, security deposit, and real-estate commission and assumed all obligations under the lease; Mr. A. only paid the utilities as a matter of convenience. Combined with the fixed four-year term, that was consistent with a temporary work apartment rather than a permanent home.

Q: What precedents did the Department rely on?
A: It relied on Charles N. Harper, TSB-A-94(3)I - a nearly identical four-year, dual-office (New York/Omaha) employment arrangement with a company apartment, where the Nebraska domiciliary was held not to be a New York resident - and Price Waterhouse, TSB-A-93(12)I, a similar fixed-term-assignment precedent.

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
• 20 NYCRR § 105.20(e)(1) - a place of abode is not "permanent" if maintained only during a temporary stay for a particular purpose, such as a fixed and limited employer assignment after which the individual returns to their permanent location; contrasted with an open-ended assignment, where the apartment would be a permanent place of abode
• Charles N. Harper, TSB-A-94(3)I (Feb. 7, 1994) - a Nebraska domiciliary's four-year New York/Omaha dual-office employment contract with a company-provided New York City apartment did not create a permanent New York abode because the assignment was fixed and limited
• Price Waterhouse, TSB-A-93(12)I (Nov. 9, 1993) - similar precedent applying the fixed-and-limited-assignment exception

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/income_ao_1994.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/income/a94_15i.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-94 (15) I
Income Tax
January 5, 1995

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

PETITION NO. I940923A

On September 23, 1994, a Petition for Advisory Opinion was received from
Roger Cukras as attorney for taxpayer, Mr. A., Hutton, Ingram, Yuzek, Gainen,
Carroll & Bertolotti, 250 Park Avenue, New York, New York 10177.
The issue raised by Petitioner, Roger Cukras as attorney for taxpayer, Mr.
A., is whether Mr. A. will be a nonresident under section 605(b)(2) of the Tax
Law and section 105.20(e) of the Personal Income Tax Regulations (Regulations)
for the duration of his four year agreement to work in New York State.
Mr. A. is a partner in a law firm which is headquartered in State X and has
offices in other states, including New York, and abroad. Mr. A. is domiciled in
State X and will maintain his domicile there.
Mr. A. has entered into an
agreement with the law firm pursuant to which he will be the managing partner of
the firm's New York office for a period of four years and will have an office in
New York during that time. In this capacity, Mr. A. will be in charge of all
day-to-day operations of the New York office. However, Mr. A. will continue
during this four year period to have in State X substantial management and client
relationship responsibilities for his firm and Mr. A. will continue to have an
office in State X. Upon the expiration of the four year period, Mr. A. will
return to State X and be exclusively engaged in the practice of law there.
During the term of his agreement, Mr. A. will split working days between
his New York office and his office in State X. For some portion of the time Mr.
A. spends in New York, his wife will accompany him. Mr. A.'s agreement with his
firm also provides that when in New York he will have the use of a furnished
apartment located in New York City which is paid for by his firm. The apartment
was leased in the name of Mr. A. but his firm has assumed all obligations under
and in connection with the lease. (All payments, including real estate
commission, security deposit and rent are paid directly by the firm. As a matter
of convenience, Mr. A. pays the utilities for such apartment.) During each of the
four years of the agreement period, Mr. A. may spend more than 183 days in New
York.
With respect to his current domicile in State X, Mr. A. will: (1) keep and
maintain for his sole use his house in State X where his wife will spend a
portion of her time, (2) file his U.S. income tax returns with his address in
State X, (3) vote in State X, (4) lease substantial recreational property in
State X, (5) maintain his driver's license in State X, (6) keep motor vehicles
garaged and registered in State X, (7) retain a resident membership in a country
club in State X and continue in various social clubs in State X, (8) maintain
estate documents reciting State X as his domicile, (9) retain his address in
State X for all other significant personal items such as credit card billings and
passport address.
TP-9 (9/88)

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TSB-A-94 (15) I
Income Tax
January 5, 1995

Mr. A.'s grown children have resided in State X, although one child is
temporarily in State Y for a two year period in conjunction with her husband's
educational program. That child is expected to return to State X. All of Mr. A.'s
significant personal possessions (including art work, other collectibles, etc.)
will be maintained in State X.
Section 605(b)(1) of the Tax Law provides that a "resident individual"
means an individual who is domiciled in New York State or 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 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,
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.
In Charles N. Harper, Adv Op Comm T & F, February 7, 1994, TSB-A-94-(3)I,
the petitioner was domiciled in Nebraska and entered into a four year employment
contract with a corporation with offices in New York City and Omaha, Nebraska.
Petitioner would spend time in both locations and spend in the aggregate more
than 183 days of each of the taxable years in New York State. While in New York
petitioner would be given the use of a company apartment in New York City.
Petitioner would maintain his domicile in Nebraska and at the end of the
contract, petitioner would return to Nebraska. It was held that petitioner's
place of abode in New York City would not be permanent because Petitioner's
employment in New York City would be of a fixed and limited period of four years.

Therefore, the petitioner would not be considered a resident of New York even
though the petitioner would spend more than 183 days of each of the taxable years
in New York. See, Price Waterhouse, Adv Op Comm T & F, November 9, 1993, TSB-A­

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TSB-A-94 (15) I
Income Tax
January 5, 1995

93(12)I.
Herein, Mr. A. is domiciled in State X and will maintain his domicile
there. When Mr. A. entered into an agreement with the law firm to be the managing
partner of the firm's New York office for a period of four years, Mr. A. will
have an office in New York State as well as his office in State X. Mr. A. may
spend in the aggregate more than 183 days of each taxable year in New York. While
in New York, Mr. A. will have the use of a furnished apartment located in New
York City which is paid for by his firm. The apartment was leased in the name of
Mr. A. but his firm has assumed all obligations under and in connection with the
lease. (All payments including real estate commission, security deposit and rent
are paid directly by the firm. As a matter of convenience, Mr. A. pays the
utilities for such apartment.)
Since Mr. A.'s employment in New York City is of a fixed and limited period
of four years, Mr. A.'s place of abode in New York City is not permanent. See,
Pursuant to section
Charles M. Harper, supra and Price Waterhouse, supra.
605(b)(2) of the Tax Law and section 105.20(e) of the Regulations, Mr. A. will
be a nonresident individual of New York State for the duration of his four year
employment contract.

DATED: January 5, 1995

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory 0pinions
are limited to the facts set forth therein.