Babbin v. State Tax Commission

— Proceeding pursuant to CPLR article 78 (transferred to this court by order of the Supreme Court at Special Term, entered in Albany County) to review a determination of the State Tax Commission. Petitioner, born and raised in New York State, is a long-time employee of the Pennwalt Corporation (Pennwalt), which conducts business operations around the world. Petitioner worked for several foreign divisions of Pennwalt, and later returned to New York where he was employed at Pennwalt’s Rochester division. In the latter part of 1972, petitioner was appointed general manager of Pennwalt’s European operations, and in December of 1972, he went to Ireland, where he rented a one-room flat. He later lived in a hotel for a short period, and in February of 1973, he rented a house in the Netherlands to serve as his residence and main office. Petitioner sold his New York home in June of 1973, and his wife and children joined him in the Netherlands with all their possessions. During his stay in the Netherlands, petitioner retained his United States citizenship and he did not take any steps to become a citizen of the Netherlands. He had no written [763] contract with Pennwalt and could be transferred at any time. During 1973, he returned to this country on numerous occasions. After the sale of his New York home, he owned no real property in this country or the Netherlands. On his Federal tax returns, he indicated that his visa was renewable periodically, and also that he had resided in Ireland and the Netherlands. Petitioner remained in the Netherlands until 1976 when he was transferred to Canada. Petitioner filed a New York State nonresident personal income tax return for 1973 which allocated his income as to the days worked within and without the State. The Tax Commission, however, found, after a hearing, that petitioner was domiciled in New York during 1973, that he did not change his domicile to the Netherlands, and, thus, he was taxable on all income wherever earned. Petitioner then commenced this article 78 proceeding seeking to annul that determination. Section 605 (subd [a], par [1]) of the Tax Law defines a resident individual as one "who is domiciled in this state, unless he maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this state”. Petitioner’s basic contention is that he changed his domicile to the Netherlands in 1973. Matter of Bodñsh v Gallman (50 AD2d 457) is virtually identical to the case at bar and dictates its outcome. In Bodñsh, the taxpayer, a long-time resident of New York, entered Pakistan in February of 1970 under a four-year multiple entry visa in connection with his employment. During 1970, the taxpayer returned to this country several times. While in Pakistan, he lived at two separate leased residences. His wife and family remained in New York until July of 1970 when they sold their home and joined him. They remained in Pakistan until January of 1973, when the taxpayer was transferred to London, England. On these facts, we held in Bodñsh that the taxpayer failed to present "clear and convincing evidence showing an intent to change [his] domicile” (p 459). We also noted in Bodñsh that one who intends to make a domicile in a foreign country "ordinarily would obtain an immigration visa” (p 459) as opposed to a four-year multiple entry visa. In the case before us, petitioner’s family continued to live in their Rochester residence until it was sold in June of 1973. Petitioner rented a house in the Netherlands, and entered that country under a restricted visa which was renewable periodically. He returned to this country on numerous occasions. He had no written contract of employment and could have been transferred at any time. He took no steps to become a citizen of the Netherlands. Although none of these factors are themselves controlling, when combined they provided sufficient evidence from which the Tax Commission could rationally conclude that petitioner did not change his domicile to the Netherlands (Matter of Bodñsh v Gallmen, supra, p 459; see, also, 20 NYCRR 102.2 [d] [2]). In order for a domiciliary of New York to escape taxation under article 22 of the Tax Law, he must satisfy all three of the conditions prescribed in section 605 (subd [a], par [1]) (Matter of Oatman v State Tax Comm., 50 AD2d 1015, app dsmd 429 US 1067; 20 NYCRR 102.2 [a] [b]). We reject petitioner’s challenge to the Tax Commission’s interpretation of section 605 (subd [a], par [1]) requiring that all three conditions must be met for an entire taxable year before a domiciliary of New York may be considered a nonresident. In Matter of Lane v Gallman (49 AD2d 963, app dsmd 42 NY2d 823), we found that the interpretation was not "irrational or unreasonable” (p 964). The Tax Commission concluded that petitioner maintained a permanent place of abode in New York for part of the year and did not maintain a permanent place of abode elsewhere for the entire taxable year in question. The record contains substantial evidence to sup [764] port that determination. Determination confirmed, and petition dismissed, without costs. Mahoney, P. J., Greenblott, Sweeney and Main, JJ., concur.