If a Nebraska-domiciled executive takes a fixed 4-year New York work assignment, using a company apartment and spending more than 183 days a year in New York, is he a New York resident or a nonresident for personal income tax purposes?

Plain-English summary

Petitioner, Charles M. Harper, is domiciled in Nebraska and intends to stay domiciled there. He signed a four-year employment contract with a U.S. corporation headquartered in New York City that also has an office in Omaha, Nebraska. Harper is 66 years old; when the four-year contract term ends - or earlier, if certain performance goals are met - he will retire and return to Nebraska for good. During the contract, he will split his working days between the New York and Nebraska offices, and while in New York he is given the use of a company apartment in New York City. He will spend more than 183 days a year in New York in each year of the contract. At the same time, he keeps deep, ongoing ties to Nebraska: his home there (where his wife continues 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 personal correspondence like credit cards and his passport.

The question was whether Harper counts as a New York resident under the statutory-residency test in Tax Law § 605(b)(1), which taxes someone who is not domiciled in New York but who both maintains a "permanent place of abode" in New York and spends more than 183 days a year there. The Department looked to Reg. § 105.20(e)(1), which explains that a dwelling is not a "permanent place of abode" if it's maintained only during a "temporary stay for the accomplishment of a particular purpose." The regulation gives essentially this exact fact pattern as its own example: an out-of-state-domiciled individual assigned to an employer's New York office for a fixed and limited period, who will return to their permanent location afterward, is not a resident even at 183+ New York days a year, because the New York apartment isn't a permanent abode. The regulation also flags the flip side: if the New York assignment is open-ended rather than fixed, the apartment would be a permanent place of abode, and 183+ days would make the person a statutory resident.

Applying that rule, the Department concluded that Harper remains a nonresident of New York for the entire four-year (or shorter) contract term, because his New York City apartment is not a permanent place of abode - his assignment there is fixed and limited to a set period, after which he will retire and return to Nebraska for good. As a nonresident, he is taxed only on his New York-source income (such as compensation for services he performs in New York), not on his worldwide income. The opinion cites the Department's own prior ruling reaching the same result on a similar fact pattern, "Price Waterhouse, Adv Op Comm T & F, November 9, 1993" (Harper's petition was itself filed through Price Waterhouse), and this same fixed-term-assignment reasoning would go on to be applied consistently by the Department in later advisory opinions addressing comparable temporary New York work assignments.

What this means for you

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

If you're not domiciled in New York but you're sent to a New York office for a set, defined period - a fixed number of years, with return to your home state built into the plan from the start - having a company-provided apartment there and spending more than 183 days a year in New York does not, by itself, make you a New York statutory resident. What matters is that your stay has a defined end point after which you're going home for good, not merely that you happen to spend a lot of days in New York. You'll still owe New York tax on your New York-source income (like the portion of your salary earned for services performed there), but you won't be taxed on your out-of-state or worldwide income the way a resident would be.

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

The dividing line in Reg. § 105.20(e)(1) is whether the New York assignment is for a "fixed and limited period" with an intent to return to the permanent location afterward, or whether it's open-ended. A client with a defined contract term, a stated retirement/return date, and strong contemporaneous documentation of an out-of-state domicile (home, voting, driver's license, bank accounts, estate documents, correspondence address) fits the temporary-stay exception even at high New York day counts. By contrast, if the assignment has no fixed end date - even if the client subjectively plans to leave New York "eventually" - the apartment is treated as a permanent place of abode, and crossing 183 days in New York would trigger statutory residency and worldwide-income taxation. When advising clients on rotational or project-based New York assignments, document the fixed term and the concrete return plan up front, since that's what separates this outcome from full residency.

Common questions

Q: Harper spent more than 183 days a year in New York. Why didn't that make him a New York resident?
A: The 183-day count only matters if it's paired with a "permanent place of abode" in New York. Under Reg. § 105.20(e)(1), a dwelling used only for a temporary stay tied to a particular purpose - here, a fixed four-year work assignment with a planned return to Nebraska - isn't "permanent," so the 183-day threshold never gets triggered against him.

Q: What if Harper's New York assignment hadn't had a fixed end date?
A: The regulation states the opposite result directly: if the assignment to the employer's New York office is not for a fixed or limited period, the New York apartment is deemed a permanent place of abode, and spending more than 183 days a year in New York would make the individual a resident for personal income tax purposes.

Q: Does Harper owe no New York tax at all as a nonresident?
A: No - he's still taxable as a nonresident on his New York-source income, including the salary or other compensation his employer pays him for services he performs in New York. What he avoids is New York tax on his non-New York-source income (i.e., he isn't taxed as if all his worldwide income were New York income).

Q: Why did the Department discuss Harper's Nebraska ties (home, voting, driver's license, bank accounts, estate documents) if the case turned on the "permanent place of abode" test rather than domicile?
A: Those facts establish that Harper is domiciled in Nebraska, not New York, which is the threshold question under Tax Law § 605(b)(1) - the statutory-residency test (permanent place of abode plus 183+ days) only applies to someone who is not domiciled in New York in the first place. His maintained Nebraska ties confirm his domicile never shifted, so it fell to the permanent-place-of-abode analysis to determine whether he was pulled into New York residency anyway.

Q: Is this a one-off result, or does the Department apply this fixed-term-assignment reasoning consistently?
A: The opinion itself relies on an earlier, nearly identical Department ruling for the same employer and fact pattern ("Price Waterhouse, Adv Op Comm T & F, November 9, 1993"), and the Department went on to apply this same "fixed and limited period versus open-ended assignment" distinction in later advisory opinions addressing comparable New York work assignments for out-of-state-domiciled taxpayers.

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 both maintains a permanent place of abode in New York and spends more than 183 days of the year there (the statutory-residency test)
• Tax Law § 605(b)(2) - defines a "nonresident individual" as anyone who is not a resident or a part-year resident
• Reg. § 105.20(e)(1) - a dwelling is not a "permanent place of abode" if maintained only during a temporary stay for a particular purpose; gives a fixed-term out-of-state work assignment as its own example of the exception, and states the contrary rule for open-ended assignments
• Price Waterhouse, Adv Op Comm T & F, November 9, 1993 - the Department's own prior opinion applying the identical fixed-term-assignment analysis, cited as authority in this opinion

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_3i.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-94 (3) I
Income Tax
February 7, 1994

STATE OF NEW YORK
COMMISSIONER OF TAXATION ANDFINANCE
ADVISORY OPINION

PETITION NO. I931213C

On December 13, 1993, a Petition for Advisory Opinion was received from
Charles M. Harper, c/o Price Waterhouse, Attn: John J. Fielding, 1177 Avenue of
the Americas, New York, New York 10036.
The issue raised by Petitioner, Charles M. Harper, 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.
Petitioner 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 its principal executive in New York City. The corporation
also maintains an office in Omaha, Nebraska. Petitioner's employment contract is
for a period of four years. Petitioner is currently 66 years old and when the
contract period 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 Petitioner plans to retire, resign his employment and return to Nebraska
at that time.
During the term of his contract, Petitioner 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 Petitioner will spend more than 183 days in New York.
With respect to his current domicile in Nebraska, Petitioner 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 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...
TP-9 (9/88)

-2­

TSB-A-94 (3) I
Income Tax
February 7, 1994

[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 employer'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 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
suchindividual 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, Petitioner 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. Petitioner 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.
Petitioner 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, Petitioner 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, Petitioner will be a nonresident individual of
New York State for the duration of his four year employment contract because
Petitioner will not maintain a permanent place of abode in New York State during
such period. Petitioner's place of abode in New York City is not permanent
because Petitioner's employment in New York City is of a fixed and limited period
of four years. See, Price Waterhouse, Adv Op Comm T & F, November 9, 1993.

DATED: February 7, 1994

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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