The year was 2014 and the New York State Court of Appeals breathed life and a lot of common sense into the New York residency wars. Matter of Gaied v New York State Tax Appeals Tribunal was decided by New York State’s highest court, and it seemed like a new competitor named common sense has finally entered into the residency battles.
As my readers know, there are two ways to be taxed as a resident in New York; either by being domiciled in the State or by being a statutory resident. The statutory residency test involves a mechanical day-count test (more than 183) and requires the maintenance of a permanent place of abode (“PPA”). Unfortunately, until the Gaied decision, determining whether one had a PPA was also viewed somewhat mechanically. To sum up a long line of litigation in one sentence, if you maintained living quarters that were suitable for year-round use, regardless of the use to you as a taxpayer or whether you used the living quarters, you had a PPA.