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The taxpayer, pursuant to N. The taxpayer then petitioned New York for an opinion as to whether he could claim a resident tax credit, under N. Tax Law section , for income taxes paid to New Jersey.

There was no question that the winnings were taxable in New Jersey. The N. Tax Law section 54A a 5 provides that income from N. Tax Law section allows residents a tax credit for taxes paid to another state. Section a would appear to allow the taxpayer a resident credit for N. In ruling against the taxpayer, however, New York relied on Regulation section The New York sources of income and deductions are detailed in N. Tax Law Section b and include items attributable to—. This opinion violates both the spirit and the letter of the law.

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The same income is taxed by both states. By not allowing the resident state credit, New York is effectively subjecting the same income to tax in both states.

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Nowhere does section a provide the limitation in the regulations that the credit is limited to taxes paid on income that meets the N. The statutes support the resident credit for this taxpayer. The Regulations are overly expansive by imposing additional limitations not in the statutes.

Although the courts upheld the regulations as a reasonable interpretation of the statute, they seem to add restrictions not intended by the law. This ruling interprets this to mean that the credit is allowable on income taxed by the other state only if New York would tax nonresidents on similar income, a reasoning that is difficult to accept. At the very least, this opinion should have been distinguished on its facts. It involved a type of income—slot machine winnings—that is not yet currently in New York, but presumably would be taxable in New York if it were to be legalized.

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