## Facts

- Edward A. Zelinsky, a Connecticut resident, worked as a law professor for a New York City law school.
- During 1994–1995, he commuted to New York about three workdays per week and worked from his Connecticut home on other days preparing exams, writing recommendations, and doing research and writing.
- When classes were not in session and during a 1995 sabbatical, he worked exclusively from Connecticut.
- On joint New York nonresident returns for 1994 and 1995, Zelinsky apportioned his salary by allocating to New York only the portion corresponding to days he physically worked in New York.
- New York issued deficiency notices asserting that his entire salary was New York-source income under the “convenience of the employer” rule, treating his Connecticut workdays as New York workdays because the at-home work was not required by the employer.
- Connecticut also taxed the portion Zelinsky allocated to Connecticut and did not provide a credit for New York tax, creating potential double taxation.
- Zelinsky challenged the assessments and sought a refund for tax paid on salary earned during his sabbatical, arguing the rule’s application violated the Commerce Clause and Due Process Clause.

## Issues

1. Whether taxing all of a nonresident’s salary from a New York employer under the convenience-of-the-employer rule violates the Commerce Clause’s fair apportionment requirement when some work is performed outside New York.
2. Whether taxing that salary violates the Due Process Clause because the income earned while physically outside New York allegedly lacks a sufficient connection to New York and results in unfair multiple taxation.

## Decision

- The New York Court of Appeals affirmed the administrative determination sustaining the deficiency assessments.
- The court held New York’s application of the convenience-of-the-employer rule to treat the full salary as New York-source income did not violate the Commerce Clause.
- The court held the tax did not violate the Due Process Clause because Zelinsky’s employment and work relationship had sufficient connections with New York and the tax was rationally related to New York-provided benefits and protections.

## Legal Principles

- A state may tax a nonresident’s income derived from or connected with in-state sources, including wages from an in-state employer.
- Under the convenience-of-the-employer rule, out-of-state workdays of a nonresident employee are treated as in-state workdays unless the employer requires the out-of-state work as a necessity rather than the employee’s preference.
- A state tax affecting interstate commerce is valid under the Commerce Clause if it satisfies the Complete Auto test, including fair apportionment assessed through internal consistency and external consistency.
- The Commerce Clause does not require a taxing state to adjust its rules to eliminate multiple taxation caused by another state’s independently chosen, otherwise valid tax regime (including a residence state’s decision not to grant a credit).
- Due process permits taxation where there is a minimum connection between the taxpayer and the state and a rational relationship between the tax and values connected to the taxing state; regular in-state employment and receipt of state benefits can satisfy this nexus even if some related tasks occur elsewhere.

## Conclusion

New York could tax a nonresident professor’s entire salary paid by a New York employer under the convenience-of-the-employer rule, because the employment was New York-based and the at-home work was not employer-required; the resulting exposure to double taxation did not, on these facts, violate the Commerce Clause or the Due Process Clause.


Zelinsky v. Tax Appeals Tribunal of the State of New York, 1 N.Y.3d 85, 801 N.E.2d 840 (N.Y. 2003)