In This Issue:

- Department Releases New Nonresident Audit Guidelines to Address Gaied

- Nuclear Power Plant That Produces Steam and Water to Generate Electricity Is Not Eligible for Investment Tax Credit

- ALJ Holds Fixed Monthly Charges for Mobile Voice Services Subject to Sales Tax

- Management Fee Paid to Corporate Partner Held Not Deductible for UBT Purposes

- Patent License Fees for Laser Surgery Procedures Held Not Subject to Sales Tax

- Refund Arising from Fraud Found Barred by Statute of Limitations

- Insights in Brief

- Excerpt from Department Releases New Nonresident Audit Guidelines to Address Gaied:

Four months after the Court of Appeals held in Matter of Gaied v. Tax Appeals Tribunal, 22 N.Y.3d 592 (2014) (discussed in the March 2014 issue of New York Tax Insights), that there was no rational basis for the Department’s position that an individual who maintains a dwelling in New York for others but does not reside in that dwelling nonetheless has a “permanent place of abode” in New York for statutory residency purposes, the Department has updated its personal income tax Nonresident Audit Guidelines (“Guidelines”). The revisions to the Guidelines primarily address the Gaied decision, but also provide other guidance to auditors and to taxpayers.

Revisions Addressing the Gaied Decision. Under New York’s “statutory residency” test, individuals who maintain a permanent place of abode in New York and spend more than 183 days in the State during a year are treated as residents for income tax purposes. The Guidelines have customarily contained a lengthy discussion regarding the statutory residency test. The revised Guidelines now include a summary of Gaied, and state that the Court of Appeals concluded in the case that “for a taxpayer to be maintaining a permanent place of abode, he must have a ‘residential interest’ in the dwelling.”