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Legal Issues

by Dennis Yang

Tue, Mar 29th 2005 6:38pm





New York Tax Collectors Telecommuting To Tennesee

from the the-tax-man-is-a-coming-for-ya dept

As telecommuting becomes a more viable option for the modern day worker (some are even saying that telecommuting is necessary for national security), who better to put a speed bump on the road to progress than the state tax system? Today, the New York Court of Appeals ruled that an out-of-state telecommuter is liable for a full year's worth of New York state income tax. The court's argument is that the state of New York provided the opportunity for the job, and therefore, should be able to tax the full amount of that person's income. Luckily for the telecommuter in question, he resides in Tennessee, which does not have state income tax, so he's not being double taxed. Numerous telecommuters now face that daunting possibility. The court's myopic decision today could end up backfiring -- telecommuters will now be less willing to work for New York companies. Sounds like a case of "taxation without representation", and we all remember what happened the last time that happened.

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  1.  
    identicon
    dorpus, Mar 29th, 2005 @ 7:14pm

    The Vassal States of America

    Hehe... I had a complex tax return this year involving scholarship income and consulting income in multiple states. Since the tax accountant already had to fill out a dozen forms, I did not complicate matters by talking about telecommuting. I pretended I made all my California income while living in California.

     

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  2.  
    identicon
    Freed, Mar 30th, 2005 @ 5:11am

    Nothing new here

    Taxation without representation is nothing new to me. I have to pay a 1% city income tax to Kansas City, MO even though I live across the border in Kansas. This earnings tax measure was implemented by the city many years ago as a way to make easy money when professional athletes' salaries started to crest the million dollar mark. Between the Chiefs and the Royals, this isn't chump change.

    This city tax is in addition to having to file Kansas and Missouri tax returns. Generally I get everything back I pay Missouri since I live and pay taxes in Kansas, but I have no representation or recourse afforded me by the taxes I pay the city. It's a flat tax they just take out of my check, and there's no exemptions. So, I pay as much in taxes in Kansas City, MO as I do in property taxes in the town I live in, but I still can't vote in KC's local elections.

    - Freed

     

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  3.  
    identicon
    Precision Blogger, Mar 30th, 2005 @ 6:18am

    So what exactly IS: telecommuting?

    Suppose I work in Tennessee in a satellite office of a New York Company. I do sales so I'm on the road a lot, and occasionally at my Tennessee office. I communicate with company computers (in NY of course). Do I have to pay NY taxes?

    To put it more simply, if this judgment is correct, how does one determine which employees of a NY company do not have to pay NY taxes? How "out of state" do they have to be, to be exempt?

    Worse, suppose I telecommute for a national company. I have no office of my own, but I do transactions with their remote computers in five states. Do I pay taxes to all five states?
    - Precision Blogger
    http://precision-blogging.blogspot.com

     

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  4.  
    identicon
    S Martin, Apr 2nd, 2005 @ 1:27am

    So let's try this

    Let's see, so If I work for a Tennesse company, but I work in New York, does that mean I am now exempt from the NY income taxes?
    It does have to work both ways doesn't it?

     

    [ reply to this | link to this | view in thread ]


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