Lunding v. New York Tax Appeals Tribunal

Christopher Lunding was a Connecticut resident who worked as a lawyer in New York. Christopher was required to make alimony payments to a former wife, who was also a Connecticut resident. In 1990 Christopher and his current wife, Barbara (plaintiffs), filed a nonresident New York income-tax return, which indicated that 48 percent of Christopher’s income was attributable to New York. On their income-tax return, the Lundings deducted 48 percent of Christopher’s alimony payments. This deduction violated New York Tax Law § 631(b)(6), which disallowed nonresident taxpayers from taking an income-tax deduction for alimony payments. New York resident taxpayers, however, were allowed to take income-tax deductions for alimony payments. The Audit Division of the New York Department of Taxation and Finance denied the deduction and assessed a deficiency against the Lundings. The Lundings appealed, arguing that § 631(b)(6) violated the Privileges and Immunities Clause of the United States Constitution by discriminating against nonresidents. The New York Court of Appeals upheld § 631(b)(6), reasoning that alimony payments were personal rather than business expenses and were unrelated to New York. The court concluded that the personal expenses of a nonresident should be deducted in the nonresident’s home state. The United States Supreme Court granted certiorari.