NY State has budget problems, so is it any surprise that the NY State Department of Taxation wants to make sure it's getting every single penny from people who spend time in NYC? The NY Times reports, "This year, the state tax department, which collects both state and city income taxes, is adding a new line to 2010 tax forms, asking state residents who own second, or perhaps third and fourth, homes to specify how many days they spent in New York City. A number nearing 183 will be a red flag" and the person could be subject to paying city taxes.
According to the NY Times, "For the New York State Department of Taxation and Finance, and the law, a New York minute counts as a day. Popping into Barneys counts as a New York City day. Same for lunching at Le Bernadin." One hedge fund billionaire, Julian Robertson, was able to prove that he spent more than half the year residing in his Long Island home, thus avoiding "back taxes of $27 million." But on the other hand, a couple who claimed the $470,000 they spent on their East Hampton garden was proof they didn't spend more than half the year in their Park Avenue hotel apartment failed in their efforts to avoid paying $25,000 in NYC taxes. One Connecticut couple who used their local wine store receipts as evidence of Nutmeg State allegiance ending up owing $1 million for their Napeague vacation home.
A NY State Department of Taxation and Finance spokesman said, "I’s not more aggressively auditing people. Our goal is for people to get it right on their tax return when they file it. Our audit program is to identify where people could be doing it wrong and to get them to correct it." Or they could just rent—which is what some people are opting to do.
