Pandemic Remote Work Does Not Establish “Employer Necessity” Under New York’s Convenience-of-the-Employer Rule

1. Introduction

Matter of Zelinsky v Commissioner of Taxation & Fin. of the State of N.Y. (2026 NY Slip Op 04251) is an Appellate Division, Third Department decision reviewing (via CPLR article 78, initiated pursuant to Tax Law § 2016) a determination of the New York State Tax Appeals Tribunal sustaining New York personal income tax assessments under Tax Law article 22.

The petitioners, Edward A. Zelinsky and Doris Zelinsky (Connecticut residents), sought refunds for the 2019 and 2020 tax years. Edward Zelinsky, a law professor employed by Cardozo Law School in New York, performed some work in New York and substantial work remotely from his Connecticut home, especially after New York’s COVID-era Executive Order 202.8 compelled remote work “to the maximum extent possible.”

The key dispute was whether Zelinsky’s remote-work days in Connecticut should be allocated away from New York as non-New York workdays, or instead treated as New York workdays under New York’s “convenience of the employer” rule (20 NYCRR 132.18[a]) because the out-of-state work was not required by the employer’s “absolute necessity.”

Petitioners also pressed constitutional claims, arguing that taxing compensation earned while physically working in Connecticut violated the Due Process and dormant Commerce Clauses. The case necessarily revisited petitioners’ earlier loss on similar issues in Matter of Zelinsky v Tax Appeals Trib. of State of N.Y., 1 NY3d 85 (2003), cert denied 541 US 1009 (2004) (“Zelinsky I”).

2. Summary of the Opinion

The Third Department confirmed the Tribunal’s determination and dismissed the petition. It held that:

  • The Tribunal rationally applied 20 NYCRR 132.18(a) and substantial evidence supported its finding that Zelinsky’s Connecticut work during the pandemic was not performed out of the employer’s “absolute necessity.”
  • Executive Order 202.8 required off-campus work but did not require Zelinsky to work specifically from Connecticut; the law school was indifferent to the state from which he taught remotely.
  • Petitioners’ constitutional attacks failed under controlling New York precedents, particularly Zelinsky I and Matter of Huckaby v New York State Div. of Tax Appeals, Tax Appeals Trib., 4 NY3d 427 (2005), cert denied 546 US 976 (2005).
  • Later U.S. Supreme Court cases invoked by petitioners—Comptroller of Treasury of Md. v Wynne, 575 US 542 (2015) and MeadWestvaco Corp. v Illinois Dept. of Revenue, 553 US 16 (2008)—were factually distinguishable and did not undermine the controlling logic.

3. Analysis

3.1 Precedents Cited

A. The Zelinsky line and the convenience rule’s constitutionality

Matter of Zelinsky v Tax Appeals Trib. of State of N.Y., 1 NY3d 85 (2003), cert denied 541 US 1009 (2004) (“Zelinsky I”) is the decision’s anchor. There, New York’s highest court upheld taxation of Zelinsky’s full salary where he worked partly on campus in New York and partly from his Connecticut home; the convenience rule treated his home-work days as New York workdays because the law school did not require him to work from Connecticut.

The Third Department treated Zelinsky I as controlling not only on the regulatory logic (what counts as employer necessity) but also on the constitutional framework. Petitioners’ attempt to recharacterize pandemic-era remote work as fundamentally different did not succeed because the court framed the critical question as site necessity (did the employer require Connecticut?), not remote necessity (was remote work required generally?).

B. The modern convenience-rule framework for nonresident wage apportionment

Matter of Huckaby v New York State Div. of Tax Appeals, Tax Appeals Trib., 4 NY3d 427 (2005), cert denied 546 US 976 (2005), supplied key doctrinal language repeated by the Third Department: courts must analyze why out-of-state work is performed, not merely the “place of performance,” and physical presence outside New York does not by itself require wage allocation away from New York.

Huckaby also provided the decision’s market-oriented view of the dormant Commerce Clause: “nonresidents do not implicate themselves or their employers in interstate commerce merely by working from home,” a proposition used here to resist reframing pandemic remote work as an interstate-commerce event requiring new constitutional outcomes.

C. Early Third Department convenience-rule applications: necessity vs. convenience

The court canvassed older Third Department decisions that operationalize “employer necessity”:

  • Matter of Fischer v State Tax Commn. of State of N.Y., 107 AD2d 918 (3d Dept 1985), appeal dismissed 65 NY2d 690 (1985): necessity found where employer gained a business advantage from out-of-state work near clients’ construction sites.
  • Matter of Fass v State Tax Commn., 68 AD2d 977 (3d Dept 1979), affd 50 NY2d 932 (1980): necessity found where work required specialized equipment unavailable at the New York office.
  • Matter of Colleary v Tully, 69 AD2d 922 (3d Dept 1979): necessity not established for writing television scripts from out of state.
  • Matter of Kitman v State Tax Commn., 92 AD2d 1018 (3d Dept 1983), lv denied 59 NY2d 603 (1983): necessity not established for composing newspaper columns out of state; also cited for the “absolute necessity” phrasing.
  • Matter of Speno v Gallman, 35 NY2d 256 (1974): necessity not established for telephone-based client work; cited for the rule’s anti-advantage rationale.
  • Matter of Brody v Chu, 141 AD2d 907 (3d Dept 1988): necessity not established for research and scholarly writing out of state.

These cases served two functions: (1) illustrating that “necessity” is a demanding standard tied to employer benefit and operational requirement, not employee preference; and (2) placing scholarly and teaching-adjacent work (research, writing) squarely in the “portable work” category that can be performed “anywhere,” which historically supports taxation by the New York employer-state under the convenience rule.

D. Standard of review and deference to the Tribunal

The court emphasized limited review in tax proceedings and deference to agency factfinding and regulatory interpretation: Matter of Black v New York State Tax Appeals Trib., 41 NY3d 131 (2023) (substantial evidence lens), Matter of Beeline.Com, Inc. v State of New York Tax Appeals Trib., ___ AD3d ___, 2026 NY Slip Op 00175 (3d Dept 2026), and Matter of Schreiber v New York State Tax Appeals Trib., 222 AD3d 1303 (3d Dept 2023).

This framing mattered: petitioners were not merely advancing an alternative reading of the facts; they had to show that the Tribunal’s conclusion lacked rationality or substantial evidence. The opinion treats the pandemic setting as novel, but not as a license to disregard the established evidentiary and deference regime.

E. Dormant Commerce Clause structure and recent New York cases

The court referenced the modern dormant Commerce Clause test through Matter of Walt Disney Co. & Consol. Subsidiaries v Tax Appeals Trib. of the State of N.Y., 42 NY3d 538 (2024), cert denied ___ US ___, 145 S Ct 1125 (2025), and Overstock.com, Inc. v New York State Dept. of Taxation & Fin., 20 NY3d 586 (2013), cert denied 471 US 1071 (2013).

For “external consistency,” it quoted an articulation appearing in Matter of International Bus. Machs. Corp. & Combined Affiliates v Tax Appeals Trib. of the State of N.Y., 214 AD3d 1125 (3d Dept 2023), affd 42 NY3d 538 (2024), cert denied ___ US ___, 145 S Ct 1126 (2025), which itself quotes Zelinsky I. This chain underscored the court’s point: the relevant constitutional vocabulary has been stable in New York’s jurisprudence and already accommodates non-physical-presence taxation where the taxed value is reasonably attributable to in-state economic activity.

F. Petitioners’ U.S. Supreme Court cases distinguished

Petitioners argued that Comptroller of Treasury of Md. v Wynne, 575 US 542 (2015) and MeadWestvaco Corp. v Illinois Dept. of Revenue, 553 US 16 (2008) undermined Zelinsky I and Huckaby. The court rejected this, characterizing Wynne and MeadWestvaco as cases about apportionment of income generated by interstate commercial activity across multiple states, unlike wage income from a New York employer where remote work does not itself create interstate market participation.

3.2 Legal Reasoning

A. The regulatory holding: “off campus” is not “out of state”

The decision’s core move is to separate two propositions that the pandemic can blur:

  1. Remote work was mandatory (because in-person work was dangerous and temporarily prohibited by state emergency order).
  2. Connecticut work was mandatory (because the employer required the employee to work from Connecticut for the employer’s needs).

The Tribunal—and the Third Department—accepted (1) but found substantial evidence lacking for (2). The record supported that Cardozo Law School’s goal was to continue instruction uninterrupted and that it was indifferent to the state from which professors connected by videoconference. Thus, the executive order compelled a change in mode (remote instruction), not a change in required situs (Connecticut specifically).

Because 20 NYCRR 132.18(a) requires “absolute necessity” attributable to the employer, the court treated the pandemic mandate as an external constraint imposed by “the state, not the employer.” That characterization preserved the existing necessity/convenience distinction: Zelinsky’s Connecticut home remained a logical and longstanding site of personal convenience—even if, during the emergency, it was also the most practical site available.

B. The “inextricably intertwined” theme survives the pandemic fact pattern

Echoing Zelinsky I, the court reasoned that Zelinsky’s out-of-state work remained “inextricably intertwined” with his New York employment: his salary and fringe benefits flowed from a New York law school, his professional affiliation was New York-based, and the economic and institutional ecosystem supporting his work remained centered in New York even when lectures were delivered online.

C. The 2020 allocation mechanics: why 20 NYCRR 132.4 did not apply

Petitioners attempted to invoke 20 NYCRR 132.4 (allocation where services are performed wholly within or wholly without New York), but the court relied on the Tribunal’s rational determination that Zelinsky performed services both within and without New York in 2020 (he worked on campus 24 days from January to March 2020), triggering 20 NYCRR 132.18 instead.

The court also rejected an attempt to treat March–December 2020 as a “separate taxable period,” distinguishing Matter of Hayes v State Tax Commission, 61 AD2d 62 (3d Dept 1978), where a meaningful mid-year change in employment circumstances occurred (retirement and new consulting work), unlike the continuity of Zelinsky’s job here.

D. Constitutional reasoning: continuity with Zelinsky I and Huckaby

Dormant Commerce Clause. The court held that the dormant Commerce Clause was not meaningfully implicated because Zelinsky’s remote work did not convert him or Cardozo into participants in interstate commerce in the relevant constitutional sense. Even if it were implicated, the court concluded that taxing the full salary satisfied “external consistency” because the compensation was derived from New York employment and New York’s approach does not require rigid physical presence (citing South Dakota v Wayfair, Inc., 585 US 162 (2018)).

Due Process. The court applied the minimal-connection/rational-relation test: there must be a “minimal connection between the taxpayer and the state,” and the tax must be rationally related to values connected with the state. It found those connections persisted in 2019 and 2020, notwithstanding reduced physical presence during the pandemic. The opinion also reiterated that the tax need not bear an exact relation to services individually consumed by the taxpayer.

3.3 Impact

This decision crystallizes a pandemic-specific application of New York’s convenience rule: a government-imposed remote-work mandate does not, without more, satisfy the “employer necessity/absolute necessity” requirement to treat out-of-state days as non-New York workdays. The relevant necessity inquiry remains employer-centric and site-specific.

Likely implications include:

  • Audit and refund posture for 2020-era returns: Nonresident employees seeking New York refunds for pandemic remote-work periods face a high burden to show the employer required work to be performed in the other state (not merely that the employee had to work remotely).
  • Evidence expectations: Taxpayers will need documentation showing that an employer obtained a concrete business advantage from, or operationally required, the employee’s out-of-state location (e.g., client-site proximity, jurisdiction-specific facilities, specialized equipment constraints), not just generalized COVID restrictions.
  • Constitutional stability in New York courts: The decision signals strong adherence to Zelinsky I and Huckaby notwithstanding evolving national debates over remote-work taxation. The court explicitly relegated broader policy reforms to the Legislature and agency rulemaking.

4. Complex Concepts Simplified

  • “Convenience of the employer” rule (20 NYCRR 132.18[a]): If a nonresident works for a New York employer and works some days outside New York, New York still treats those out-of-state days as New York workdays unless the employer required the out-of-state work (i.e., it was the employer’s necessity, not the employee’s preference).
  • “Absolute necessity” / “employer necessity”: A demanding standard: the employer must need the employee to work at that out-of-state location for business reasons (not simply tolerate it, allow it, or be indifferent to it).
  • “Substantial evidence” review: The court does not decide the facts from scratch. It asks whether the agency’s conclusion was a reasonable one that the agency could reach on the record.
  • Dormant Commerce Clause: A doctrine that limits state laws that discriminate against or unduly burden interstate commerce, even when Congress has not enacted a statute on the issue. Here, the court viewed nonresident remote work for a New York employer as not, by itself, the type of interstate market activity that triggers heightened scrutiny.
  • Due Process (state taxation): Requires a minimal connection between taxpayer and state and a rational relationship between the tax and state-conferred benefits/opportunities. Physical presence helps, but is not the only way to show connection.
  • “External consistency” (tax apportionment): A practical test asking whether a state taxed only the portion of value reasonably attributable to in-state activity. The court held Zelinsky’s salary was attributable to New York employment, even though some labor occurred elsewhere.

5. Conclusion

The Third Department’s decision confirms that New York’s convenience-of-the-employer rule remains robust in the pandemic context. Even where COVID-era public orders made on-campus work impossible, the decisive question is whether the employer required the employee to work from the out-of-state location. A mandate to work remotely is not the same as an employer-driven necessity to work in another state.

Constitutionally, the court treated the case as governed by Zelinsky I and Huckaby: remote work for a New York employer does not inherently implicate interstate commerce in a way that defeats New York taxation, and due process is satisfied so long as the taxpayer’s employment relationship and benefits remain meaningfully connected to New York. The opinion ends by acknowledging ongoing policy debate but locating any reform with the Legislature and the administering agency—not the courts on substantial-evidence review.