294
Opinion of the Court
Div. 2d 268, 639 N. Y. S. 2d 519 (3d Dept. 1996). According to the court's reasoning, "although a disparity in treatment [of nonresidents] is permitted if valid reasons exist, the Privileges and Immunities Clause proscribes such conduct . . . where there is no substantial reason for the discrimination beyond the mere fact that [nonresidents] are citizens of other States." Id., at 270, 639 N. Y. S. 2d, at 520 (internal quotation marks omitted). Thus, despite the intervening enactment of § 631(b)(6), the court concluded that "there exists no substantial reason for the disparate treatment, leaving as '[t]he only criterion . . . whether the payor is a resident or nonresident.' " Id., at 272, 639 N. Y. S. 2d, at 521 (quoting Friedsam, supra, at 29, 470 N. Y. S. 2d, at 850).
Respondents appealed to the New York Court of Appeals, which reversed the lower court's ruling and upheld the constitutionality of § 631(b)(6). 89 N. Y. 2d 283, 675 N. E. 2d 816 (1996). In its decision, the New York Court of Appeals found that Shaffer v. Carter, 252 U. S. 37 (1920), and Travis v. Yale & Towne Mfg. Co., 252 U. S. 60 (1920), "established that limiting taxation of nonresidents to their in-State income [is] a sufficient justification for similarly limiting their deductions to expenses derived from sources producing that in-State income," and that the constitutionality of a tax law should be determined based on its " 'practical effect.' " 89 N. Y. 2d, at 288, 675 N. E. 2d, at 819. The court noted that "the Privileges and Immunities Clause does not mandate absolute equality in tax treatment," and quoted from Supreme Court of N. H. v. Piper, 470 U. S. 274, 284 (1985), in explaining that the Clause is not violated where " '(i) there is a substantial reason for the difference in treatment; and (ii) the discrimination practiced against nonresidents bears a substantial relationship to the State's objective.' " 89 N. Y. 2d, at 289, 675 N. E. 2d, at 820.
Applying those principles to § 631(b)(6), the court determined that the constitutionality of not allowing nonresidents to deduct personal expenses had been settled by Goodwin v.
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