On December 28, the Connecticut Supreme Court confirmed that Connecticut properly could tax income recognized by a nonresident upon the exercise of stock options awarded as part of his compensation for services performed in Connecticut. Jefferson Allen vs. Commissioner, ____ Conn. ___ (December 28, 2016).
The taxpayer had received stock options during two periods when he was employed in Connecticut. Both sets of options were exercised after the taxpayer had become a nonresident. The taxpayer paid Connecticut tax upon each of the exercises and later sought refunds on the bases that the taxation of the options was contrary to Connecticut's own income tax regulations and also violated the due process clause of the federal Constitution.
The Supreme Court noted first that the taxpayer's claim for refund with respect to the initial exercise of options was untimely, as it was brought more than three years from the due date of the return for the tax year in which the options were exercised.Next, the Court considered the taxpayer's contention that under the applicable income tax regulation, income from options was taxable only if the taxpayer was performing services in Connecticut at the time the options were granted as well as the time that the options were exercised. The Court rejected that construction, holding that the regulation required only that the taxpayer be performing services in Connecticut at the time the options were granted. The Court noted that construing the regulation as proposed by the taxpayer could lead to "bizarre results" in that a break of service somewhere between the time that the option was granted and the time the option was exercised would allow a taxpayer to avoid any taxation by Connecticut.
Warren Whitaker, Dina Kapur Sanna and Carl Merino co-authored a 2021 update to the white paper, entitled "U.S. Tax Planning for Non-U.S. Persons, Assets and Trusts - An Introductory Outline."
Of Counsel Michael Pfeifer served on the panel, "Integrated Asset Protection," a webinar hosted by Respada on July 29.
Christopher Voukides is a speaker at the Trusts & Estates End of Year Review 2021 sponsored by the Boston Bar Association on June 21.
Andrew M. Nerney and Stephanie Eassa Rapp co-authored the article, "With Great Powers (of Appointment) Come Great Responsibility," published by WealthManagement.com.
Scott Clark, Chair of Day Pitney’s Multistate Tax Practice, is presenting on a virtual panel at the Anchin Executive Forum titled, “The Changing Shape of Business in New York” on June 9.
Day Pitney was U.S. legal counsel to GSB Capital, LLC in its multi-country launch of the GSB Equity Long Short Fund.
Day Pitney Press Release
Day Pitney Press Release
Andrew M. Nerney and Stephanie Eassa Rapp co-authored the article, “With Great Powers (of Appointment) Come Great Responsibility,” published by WealthManagement.com.
Scott Brian Clark’s arrival to the firm was featured in Reuters’ column, Career Tracker: Lawyers on the Move.