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Will I owe New York State taxes if I own a vacation home there?

On Behalf of | Aug 23, 2022 | Tax Controversies |

A vacation home in New York may cause you to owe taxes to the Empire State even if you permanently reside elsewhere. According to Section 605 of the NY State Tax Law, spending more than 183 days in the state during a one-year period could incur a tax liability. The interpretation of what makes a vacation home a “permanent place of abode” could also become an issue.

What might determine if a vacation home reflects a “permanent place of abode?”

As reported by Bloomberg Tax, a recent ruling involving a New Jersey resident who owns a home in upstate New York may pave the way for future tax disputes. The vacation home was, at first, determined to reflect a “permanent place of abode” based on its construction and suitability for year-round use. The owner’s appeal, however, convinced the court that the home was not a PPA.

The owner’s appeal argued that he and his wife spent no more than three weeks per year in the New York home and left no personal items there. The additional fact that the New Jersey resident traveled to his New York City office on a regular basis exceeding 183 days per year did not qualify him as a statutory New York resident. The vacation home was an unlikely “home base” considering its location more than 200 miles from the owner’s Manhattan office.

What options do I have to dispute a NY State tax determination?

As noted on the NY State Department of Taxation and Finance website, individuals owing taxes have a right to dispute any notice or bill they disagree with. If you receive a Notice of Deficiency or a Notice of Determination, you may find that the communication states that you have protest rights. By filing before the specified deadline and following the instructions on the notice, you may dispute the determination.