‘Tax version of a colonoscopy’: New York cracks down on wealthy out-of-state residents avoiding taxes

Every minute counts

According to the New York State Department of Taxation and Finance, if an individual maintains "a permanent place of abode in New York State for substantially all of the taxable year and spend 184 days or more in New York State during the taxable year,” they are classified as a New York resident for income tax purposes. The department also notes that for this purpose, “any part of a day is a day.”

Bloomberg highlights that if an individual is driving from New Jersey to Connecticut and exits the highway in New York for lunch, that stop counts as an entire day spent in New York.

Jonathan Mariner is one of the people who relocated from New York from Florida. After getting his own residency audit from New York, he created an app called TaxDay, which monitors users’ locations to ensure they do not exceed the number of days that would trigger residency status.

“Even though you have a Florida driver’s license, Florida voting record, Florida home, it does not matter,” Mariner told Bloomberg. “You could be on vacation in New York and they’ll pull you back in.”

There’s a reason why New York is cracking down on wealthy out-of-state residents avoiding taxes: The loss of high earners can impact the state’s income tax revenue.

In an op-ed earlier this year, New York State Comptroller Thomas P. DiNapoli and Heather Briccetti Mulligan, president and CEO of the Business Council of New York State, highlighted the state’s dependence on these high earners for substantial income tax contributions.

“[Personal income tax] is the largest state tax revenue, accounting for more than $60 billion in 2021, and a small set of filers have an outsized impact on revenues. Those with incomes above $1 million were just 1.6% of all filers, but comprised 44.5% of the total liability in 2021,” they wrote.