CHRISTOPHER H. LUNDING, ET AL., RESPONDENTS, v. TAX APPPEALS TRIBUNAL OF NEW
YORK, RESPONDENT, COMM'R OF TAXATION & FINANCE OF THE STATE OF NEW YORK,
APPELLANT.
89 N.Y.2d 283, 675 N.E.2d 816, 653 N.Y.S.2d 62 (1996).
December 18, 1996
(Case Commentary by Editorial Board)
3 No. 260 (1996 NY Int. 238)
Decided December 18, 1996
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
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Andrew D. Bing, for Appellant.
Christopher H. Lunding, pro se, for Respondents.
KAYE, CHIEF JUDGE:
In this combined action for a declaratory judgment and article 78
relief petitioners challenge the constitutionality of Tax Law
631(b)(6), which disallows nonresidents a full deduction for alimony
payments from their New York State income tax liability. The central
question before us is whether Tax Law § 631(b)(6) violates the
Privileges and Immunities Clause of the United States Constitution. We
conclude the statute is constitutional.
Petitioners Christopher H. Lunding and his wife Barbara J. Lunding are
Connecticut residents. In 1990, Mr. Lunding, a partner in a New York
City law firm, derived substantial income from the practice of law in
this State. On their joint New York nonresident tax return filed for
the year 1990, they reported a Federal adjusted gross income of
$788,210, which included an adjustment of $108,000 for the full amount
of alimony that Mr. Lunding had paid that year to his former spouse,
also a Connecticut resident. On their return petitioners adjusted
their New York State gross income by 48.0868% of the alimony
payments-- equaling $51,934--which represented the percentage of Mr.
Lunding's 1990 claimed New York business income.
Relying on Tax Law § 631(b)(6) the Audit Division of the Department of
Taxation and Finance denied the alimony deduction and recalculated
petitioners' New York tax liability, concluding that they owed an
additional $3,724. A Notice of Deficiency in that amount followed.
SNIPPETS:
YORK, RESPONDENT, COMM'R OF TAXATION & FINANCE OF THE STATE OF NEW YORK, APPELLANT.
In this combined action for a declaratory judgment and article 78 relief petitioners
Petitioners Christopher H. Lunding and his wife Barbara J. Lunding are Connecticut residents.
On their joint New York nonresident tax return filed for the year 1990, they reported a
Relying on Tax Law § 631the Audit Division of the Department of Taxation and Finance denied
Petitioners then filed an administrative petition with the Division of Tax Appeals
Specifically, petitioners claimed that the tax which was the subject of the Notice of
The Administrative Law Judge sustained the disallowance, holding that the Tax Appeals
In their exception petitioners conceded that the Tribunal's jurisdiction did not encompass
The Appellate Division converted the constitutional challenge into a declaratory judgment
While recognizing both that this Court had affirmed Friedsam solely on statutory grounds and
While residents and nonresidents with the same total income are taxed at the same rate, the
the numerator of the fraction --the nonresident's New York source income--is not reduced by
Petitioners urge that Tax Law § 631is discriminatory because, without justification, it
In two seminal decisions on State income taxation of nonresidents under the Privileges and
The Travis Court, however, considered an additional provision of the Tax Law that disallowed
Rather, disparity in tax treatment between residents and nonresidents is permissible "in the
the Appellate Division in Matter of Golden considered a Privileges and Immunities challenge
The Appellate Division, again over the dissent of then-Justice Levine, upheld the challenge
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