Fass v. State Tax Commission

Main, J.,

dissents and votes to confirm in the following memorandum. Main, J. (dissenting). I respectfully dissent. During the year 1971, petitioner, a New Jersey resident, was majority stockholder and executive officer of five corporations by whom he was employed as editor and publisher of several special interest magazines, and all of these corporations maintained their offices in New York City. Included in petitioner’s duties for the corporations were the testing and analyzing of products in various fields and the examination and photographing of animals, and to perform these varied tasks petitioner, as corporate head and majority owner, equipped himself with specialized facilities located either at his home in Englewood Cliffs, New Jersey, or his farm in Flemington, New Jersey.- For the taxable year 1971, he allegedly worked 60 days outside of New York at one or more of these facitities, and, as a result, when he came to file his New York State nonresident income tax return for 1971, he sought an exemption from taxation for that portion of his income attributable to his 60 work days at his New Jersey home and farm. Rejecting this claim, the State Income Tax Bureau issued a notice of deficiency against petitioner, and, following a subsequent hearing on the matter, its action was sustained by the Tax Commission. This proceeding ensued. Upon an examination of the instant record in light of legal principles firmly established by case law, it becomes clear in my view that the commission’s determination should be sustained. Considering his dominant position within the employer corporations, petitioner was positioned so as to determine where his specialized facilities would be located, and, although he maintains that the necessary facilities *979were not readily available in New York State within the New York City metropolitan area, he concedes that they could have been established within that area and that their actual location in New Jersey was convenient for him. Such being the case, petitioner’s position is indistinguishable from that of the petitioner in Matter of Simms v Procaccino (47 AD2d 149) wherein a Connecticut resident’s income attributable to work' done at specialized facilities at his home was held to be subject to the New York State income tax. In language equally applicable here, we plainly stated as the grounds for our decision in that case that petitioner’s duties did not necessitate that he live outside of New York and that, while suitable facilities for petitioner might have been unavailable in New York, there was no showing that they could not have been set up in this State. With these circumstances prevailing, the petitioner in Simms (supra) was not allowed an exemption for his work time in Connecticut, and a like result should be reached in the present instance. Such a result is also mandated by the decision of the Court of Appeals in Matter of Speno v Gallman (35 NY2d 256) wherein that court adopted a policy that nonresidents were not to be accorded special tax benefits denied to residents of New York State. The court made clear in its decision that where, as here, a resident of this State would be denied an exemption from the income tax for the same work done at his home, a similarly situated nonresident should be treated likewise and not given any unfair advantage. Furthermore, despite the majority’s emphasis to the contrary in the present case, the court in Speno (supra, p 259) additionally indicated that the exemption should be disallowed for all "services” not necessarily performed out-of-State and did not limit the application of the rule solely to work which could have been performed in an employer’s New York office. Accordingly, to further this policy adopted by the Court of Appeals and ensure equal treatment for all, we should confirm the commission’s determination with regard to the present petitioner.