





The new ruling applies only to people who spend more than 183 days in New York, which would include many out-of-state commuters to the city. For years, New York law stated that these people have to pay taxes on any income they make in this state. But they generally haven't had to pay New York taxes on income they make outside of the state or on their spouses' income if they work elsewhere.






Mr. Pinto ruled that the couple's Long Island vacation home qualifies under the law as a permanent abode because it was suitable for living year-round—whether or not the couple actually stayed in the home wasn't relevant. Under the ruling, if an owner doesn't spend a single a day in a home it could still count toward a permanent residence.

The Napeague, Long Island, house was purchased by John and Laura Barker for $260,000 in 1997, according to court documents. Mr. Barker works in New York City. From 2002 to 2004, the period that was assessed for back taxes, the Barkers said they spent only a few days a year at the Long Island home, usually during the summer.

The appeals court upheld the ruling that it's not the owners' intended use of the house that matters, but whether the home could be used all year long. The court said that the house is approximately 1,122 square feet with heat, electricity, and internet service "making it very habitable and comfortable year round," according to court documents.

The court also said that Mrs. Barker's parents, who sometimes stayed at the home throughout the colder months, were evidence that it was a permanent residence even though the Barkers never used it that way.

The Barkers countered that they used the home only a few days a year, adding that the refrigerator was usually empty, court documents showed. They cited clothing not being stored there as evidence that it was a part-time residence.

"We think the decision is wrong. We are evaluating our options including a continuation of appeals," Mr. Barker said. "We imagine this decision will have a chilling effect on New Your tourism and real estate values among other second and third order effects."

Tax attorneys said they were unlikely to get the ruling overturned.

Write to Craig Karmin at