Nonresidents earned more than $90 billion in New York State income in 2014, with approximately $68 billion earned in New York City. In 2014, more than half of New York taxpayers who earned $720,000 or more did not legally reside in New York
Report highlights New York’s increasing role in the national economy and suggests the need for continued study of City, State and Federal tax policies

(New York, NY) – Over the last decade, the share of the nation’s high-income earners who reported income in New York State has grown substantially, fueled by a sharp increase in the number of high-earning nonresidents, according to a new analysis released today by New York City Comptroller Scott M. Stringer. Comptroller Stringer’s report reveals several key findings that provide a new understanding of New York’s economy and the changing composition of its tax base and suggests further analysis should be done to ensure residents and nonresidents are being treated equitably for tax purposes.

“As the center of global finance and other high-paying industries, New York City has long attracted many of the nation’s high-income earners,” Comptroller Stringer said. “Since 2001, the number of high-income individuals who benefit from the New York economy, but live elsewhere, has grown dramatically. The changing nature of our economy demands that we begin to think about how to ensure everyone who pays taxes in the Empire State is treated fairly.”

The Comptroller’s analysis is the first to compile tax collection data from New York State as well as the Internal Revenue Service to shed light on the residence and composition of those who earn income and pay taxes in New York. For tax purposes, individuals who spend less than half the year in New York, even if maintaining a permanent home, are categorized as nonresident taxpayers. Nonresidents in New York City pay a host of taxes including sales tax, property taxes, certain business taxes, and New York State personal income tax on income earned in New York. They are not, however, required to pay City personal income tax.

Major findings of the report include:
In 2013, the proportion of the highest-income Americans making money in New York State was substantial.
In 2013, 43.1% of all taxpayers in the country who made $10 million or more reported New York State income—up from 31.4% in 2001

This growth in very-high-income earners has been driven primarily by nonresident taxpayers.

In 2013, more than 1 in 4 U.S. taxpayers with incomes of $10 million or more reported income in New York State but maintained a primary residence elsewhere—up from 16.8% of U.S. taxpayers in 2001.

By 2014, more than half of all New York taxpayers who reported earning more than $720,000 annually were nonresidents. At incomes above $10 million, nearly two-thirds of state taxpayers file as nonresidents.

In total, nonresidents earned roughly $90 billion in New York State income in 2014, including wages, capital gains on real estate and business income. The Comptroller’s Office estimates that $68 billion of that amount was earned in New York City.
“New York is a global economic hub, with a growing concentration of high-income earners who do not call our state their home. But it’s not just about what’s being earned here, it’s important to understand who is making money, where these individuals come from and what impact the trends we’re seeing will have on our city and state,” Stringer said.

Additional Findings include:
Most nonresident taxpayers are commuters, but average incomes for long-distance nonresidents are higher than those in the tri-state area.

More than 500,000 families from the three states closest to New York – New Jersey, Pennsylvania and Connecticut – earned income in New York State in 2013, an increase of about 30% as compared to 2001. The average incomes for these nonresident New York taxpayers were $189,485, $225,921 and $432,196, respectively.

Some long-distance nonresident taxpayers who earn income in New York State have significantly higher average incomes. For example, in Texas, California and Illinois, the average income for nonresident New York taxpayers was roughly $1 million in each state. The number of nonresident taxpayers from these three states has more than doubled since 2001.

The higher rate of New York taxpayers filing as nonresidents does not suggest that high-income earners are leaving the state.
In fact, the evidence implies the opposite: Since 2002, the percentage of high-income New York State taxpayers with incomes above $1 million has consistently been below the rate for taxpayers earning less than $1 million. In 2014, about 1% of resident taxpayers with more than $1 million moved out of state.

The Comptroller’s report raises several important questions about City, State and Federal tax policies, including issues of tax equity and if greater transparency and disclosure are needed to understand who owns properties and businesses. In addition, the increased role of New York’s economy in national income generation has implications for how investment decisions are made in infrastructure, security and housing.

“As our State and City pursue reforms to create a more fair and equitable tax system, this data must inform the conversation. New York is always changing and our economic growth over the past decade has had both positive and negative implications for those who live, work and raise families here. We must remember those who helped to build our City and ensure that everyone has a share in the economic success of New York,” Stringer said.

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