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Yes. There are a bunch of places in SF that give discounts if you are a local.

I'm not sure if that's the same as it being legal. I'd be curious to know of any case law on the matter.

I would suspect yes. Almost every college and university in the US has higher rates for non-state residents.

Also important to note that this is not based on nationality; it is based on state of residence. This higher fee applies to residents of the other 49 US states, as well as international visitors.

I can't read nytimes (not a subscriber) but how are they verifying citizenship?

They likely are only verify residency (via ID or utility bill), so persons of other nationalities but living in NY should get a discount.