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The latest shot at New York’s increasingly controversial practice of taxing nonresidents for services performed out of state hinged on an 82-year-old opinion of the Attorney General. And like a variety of other challenges raising concerns ranging from constitutional application to simple fairness, it failed. In the Matter of Thomas L. Huckaby, 817284, an administrative law judge held that New York can properly tax a man who lives and works some 900 miles from New York City and came to the Empire State on eight occasions in each of the two tax years. Unfortunately for Thomas L. Huckaby of Nashville, Tenn., the company he now works for happens to be based in Jamaica, N.Y. Over the past several months, the Division of Tax Appeals has repeatedly addressed the imposition of tax, in various contexts, on people who live and work out of state but have a relationship with an employer based in New York. Consistently, the state’s interpretation of the convenience of the employer test has been upheld. Unlike the others, Huckaby hitched his hopes to a 1919 Attorney General opinion that said the source of income depends on where the work is performed rather than where the person or firm paying for the service is located. But Administrative Law Judge Arthur S. Bray said case law that has developed over the decades renders Huckaby’s argument “spurious.” “The place of performance doctrine is no longer the law of the State of New York,” Bray wrote. Huckaby worked for a company called Multi-User Computer Solutions in Nashville from 1983 to 1991. When the firm underwent a business reorganization, Huckaby, a computer programmer, lost his job. Shortly thereafter, Huckaby was hired by the National Organization of Industrial Trade Unions (NOITU), whose main office is in Jamaica. Huckaby set up a home office in Nashville, did most of his programming work in Nashville, and came to New York occasionally to train NOITU’s staff in the use of new or revised programs. He worked in New York on 59 days in 1994 and 62 in 1995. PERSONAL CONVENIENCE In challenging the imposition of New York tax, Huckaby cited the Attorney General’s opinion and claimed the convenience of the employer test was not meant to be applied to someone who lives way beyond commuting range and whose main place of business is out of state. The Division countered that �631 of the Tax Law requires it to tax nonresident employees who work out of state for their own convenience rather than the necessity of the employer. Bray agreed. “NOITU did not require petitioner to perform his work in Nashville,” Bray wrote. “It would not have objected if he had performed it in New York. Petitioner’s decision to do his programming work in Nashville rather than New York was made for personal reasons.” Bray also rejected the argument that the convenience of the employer test was developed to prevent abuses by commuters. He said it makes no difference that Huckaby lives and works hundreds of miles from New York City. “Since New York residents do not gain a tax benefit from working at home, neither should nonresidents who perform services or maintain an office in New York State,” Bray wrote. Appearing for Huckaby was Peter L. Faber of McDermott, Will & Emery in Manhattan. The Division of Taxation was represented by Jennifer L. Hink.

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