Background
Edward Zelinsky is a law professor at Cardozo Law School in New York City who has lived in Connecticut for decades. His dispute with New York over the income he earns while working from home is one of the longest-running challenges to New York’s “convenience of the employer” rule — the principle, codified in 20 NYCRR 132.18(a), that a nonresident employee’s out-of-state workdays are treated as New York workdays unless the employer specifically requires the work to be done outside New York. In 2003, the Court of Appeals upheld New York’s taxation of Zelinsky’s entire 1994–1995 salary, finding that his choice to work from Connecticut served his own convenience, not any necessity of Cardozo.
The same dispute resurfaced for 2019 and 2020 — now with a powerful new argument. During COVID-19, Governor Cuomo’s executive order mandated that nonessential businesses implement full remote work. Zelinsky, like virtually all Cardozo faculty, taught from his Connecticut home for most of 2020. He filed nonresident New York income tax returns allocating a portion of his salary to Connecticut and claiming refunds. The Division of Taxation denied the claims. The Tax Appeals Tribunal sustained the denial, finding that the pandemic executive order did not constitute “employer necessity” under the convenience rule. Zelinsky then commenced a CPLR Article 78 proceeding in the Third Department, arguing that a state-ordered work-from-home mandate is categorically different from voluntary remote work, and that taxing his Connecticut income violated the dormant Commerce Clause and Due Process Clause of the U.S. Constitution.
The Court’s Holding
The Third Department affirmed the Tax Appeals Tribunal and dismissed the petition. On the statutory question, the court agreed that the COVID executive order required Cardozo to implement remote instruction — but it did not require Zelinsky to work specifically from Connecticut. The law school was “indifferent to the state from which faculty delivered videoconference lectures.” No evidence showed that Cardozo obtained any business advantage from Zelinsky working in Connecticut rather than, say, from a New York location. The court drew a decisive line: “A temporary but grave public health emergency, not ‘employer necessity’ as previously defined, explains why Zelinsky worked remotely.” Because Zelinsky had established his Connecticut home for his own convenience long before COVID, that home remained his choice of remote-work site — not a requirement imposed by Cardozo. The Tribunal’s determination was supported by substantial evidence and survived rationality review.
The court then rejected both constitutional challenges. On the dormant Commerce Clause, it reaffirmed settled New York precedent: a nonresident who works from home does not thereby implicate herself or her employer in interstate commerce. New York’s tax was fairly apportioned because Zelinsky’s salary derived entirely from New York employment. On due process, the court found the requisite minimal nexus intact — Zelinsky continued to benefit from his Cardozo affiliation, the school’s institutional support, and the broader New York legal and academic market. The court also declined petitioners’ invitation to treat post-pandemic Supreme Court decisions (Wynne and MeadWestvaco) as undermining Zelinsky I or Huckaby, distinguishing those cases as involving interstate commercial activity, not individual remote employment.
Key Takeaways
- COVID-era government work-from-home mandates do not automatically satisfy the “employer necessity” exception to New York’s convenience of the employer rule under 20 NYCRR 132.18(a).
- A pandemic executive order requiring remote work leaves NY income tax liability intact when the employer was indifferent to the employee’s out-of-state work location.
- The dormant Commerce Clause and Due Process Clause do not bar New York from taxing the full salary of a nonresident employee whose income flows entirely from a New York employer, even if most physical work occurred elsewhere.
- The Third Department explicitly left further reform of the convenience rule to the Legislature and the Tax Commissioner — not the courts.
Why It Matters
This decision effectively closes the book on pandemic-era constitutional challenges to New York’s convenience rule. For the large number of employees who relocated from New York to Connecticut, New Jersey, or elsewhere during COVID while retaining New York employers — and who filed refund claims on the theory that state mandates required their out-of-state presence — the ruling is a significant setback. The convenience rule remains fully intact, and the employer’s indifference to remote-work location is fatal to the necessity argument.
New York is one of a small number of states that applies a convenience-of-the-employer rule, and it is among the most aggressive in doing so. Employers with New York-based operations should ensure that out-of-state employees understand their continued New York withholding obligations unless the employer can document a specific business need for out-of-state work. Tax practitioners representing clients who filed COVID-era refund claims based on the government-mandate theory should reassess exposure, and any such cases pending before the Division of Taxation or the Tax Appeals Tribunal should be evaluated against this decision.