Congress Trying To Stop Pointless Telecommuting Tax

from the recognizing-the-times dept

Thanks to the internet and other new technologies, it’s clear that telecommuting can make a lot more sense for both employers and employees these days. While it doesn’t make sense in all cases, the flexibility that telecommuting allows could really help out the economy in a lot of ways. That’s why it was disappointing last year when the Supreme Court refused to hear the case of a Tennessee resident who was being forced to pay New York State taxes because his employer was in New York. He was willing to pay taxes for the amount of time he actually worked in New York, but the state claimed that he wouldn’t have the job if it weren’t for New York, and therefore he needed to pay up. Obviously, that could lead to some very tricky situations for both telecommuting workers and the employers that hire them — and could likely lead to having the same income subject to taxes in multiple states. It’s a blatant grab for money, at the expense of encouraging telecommuting. It appears Congress is now trying to fix the situation with a proposed law that would prevent states from taxing non-residents who telecommute. It seems like a reasonable solution, but such laws have been proposed in the past and never went anywhere. Hopefully, the attention paid to last year’s case will help get this bill moved forward.

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Comments on “Congress Trying To Stop Pointless Telecommuting Tax”

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Don G. says:

Income tax

Tennessee has an income tax. Usually, when one pays a tax such as that demanded by New York, the amount paid is deducted by the resident’s home state from his tax. In this case, I suspect that New York’s aggregate rate is more than Tennessee’s, so Tennessee would net nothing, zero, zilch. I wonder if Tennessee was involved in this case? It clearly has an interest …

J says:

Re: Why did we go offshore

Actually no….As long as the company has a taxable nexus to NY, then the state can and will impose a tax on them and their employees.

Think about all of the companies that are incorporated in Delaware, but do business in the other states. They still have to pay taxes.

Off shore incorporation is generally used to avoid US taxes on international profits.

Scott says:

Re: Let's eliminate income tax entirely

How would this be fair to all the rich people buying $20 million homes and $8 million dollar boats?

Have you no heart, can you not feel the plight of the Wall St. exec who only has a 60′ yacht moored next to all the 80′ ones?

The rich and powerful will never let that happen…..

John W. says:

Re: Let's eliminate income tax entirely

“all of these questions would be so much easier and cheaper to resolve if we were to just eliminate income taxes and go to sales taxes”

Right on Ian!

We’d no longer have to spend time filling out tax forms, we’d collect taxes on all of the illegals out there, and all of our products would become cheaper since the personal and corporate income taxes wouldn’t be embedded in the cost of stuff.

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