Don't Mess With Taxes

Those who enter the New York Criminal Courts building are greeted by Thomas Jefferson's words engraved on the façade. The third U.S. president cited "equal and exact justice to all men of whatever state or persuasion" as one of the essential principles of American democracy. (Photo by Carl Mikoy, Flickr Creative Commons)

In September 2019, Donald J. Trump changed his official residence from New York to Florida.

The then-president gave no official reason for the paperwork move. However, one reason likely was the Sunshine State’s lack of a personal income tax.

Though Trump refused to release his federal or state income tax filings to the public, as other presidents and candidates had done for decades, he did on Oct. 19, 2019, declare on Twitter (now X) that even though he had paid “millions of dollars in city, state and local taxes each year,” he had been “treated very badly by the political leaders of both the city and state.”

Now, however, Empire State officials, especially in those in the tax department, might be putting out a welcome mat for Trump, who’s now back in the Big Apple to deal with some legal matters.

In fact, they might even be hoping he extends his stay in their jurisdiction for a while longer.

Trial length tax implications: Since moving to Palm Beach permanently, Trump has periodically popped back into the city. Now he's back in Manhattan for a sustained period for his trial on allegedly falsifying business records.

New York tax collectors would like him to stick around for at least 184 days. That’s the length of time it takes for individuals to be considered New York residents for tax purposes.

Of course, notes New York attorney David Pope, there are other requirements.

The individual must be domiciled in New York, or spend more than 183 days in the state and have a New York permanent place of abode for substantially all the taxable year, writes Piper, who is a state and local tax partner in DLA Piper’s Manhattan office.

“Trump isn’t domiciled in New York, but he owns a residential unit in Trump Tower and feasibly could be in the state for more than 183 days due to his legal problems,” writes Pope in an article published last week in Bloomberg Tax.

“For anyone in a similar position — including executives who are subpoenaed for civil matters that require in-person attendance in New York — these factors add complexity to the state taxation analysis. The question hinges on whether New York considers court appearances, in-person interviews, or even potential incarceration (however unlikely) are exempt for state tax purposes,” adds Pope.

Residency and involuntary stays: Pope’s examination of New York’s resident tax law and how it might produce, under certain circumstances, a tax bill for Trump earns this weekend’s Saturday Shout Out.

The May 3rd article, New York Taxman Should Hope Trump’s Criminal Trial Runs Long, looks at residency tests, involuntary stays within a tax jurisdiction, and how incarceration could figure into a tax bill decision.

And you thought hush money was going to be the only payments of interest during Trump’s alleged election interference trial at 100 Centre Street. There’s always a tax angle.

Trump has spent 11 days in the New York City courtroom so far. Keep an eye on whether it will drag out long enough to trigger a tax bill. You can bet New York tax officials will be counting.

You also might find these items of interest:

• Yankees' Jeter off NY state tax hook
• Trump’s tax travails in trying to escape New York
• Super Bowl rooting reasons and tax residency implications
• Philadelphia man uses selfies tax claim documentation, audit defense against NYC collection effort

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