Legal Issues

by Mike Masnick

Telecommuting May Have Just Become A Lot More Expensive

from the uh-oh dept

Just as it looked like people were finally getting to be okay with telecommuting, the Supreme Court makes the whole process more expensive. Earlier this year we wrote about a programmer who was telecommuting from Tennessee to work for a company based in New York. He paid New York taxes on the portion of his income based on the time that he actually spent in New York, but the state decided that he needed to pay New York state taxes on his entire salary, saying that New York gave him the opportunity for the job, and basically, he owed them for it. While he lucked out because Tennessee has no income tax to add on top of that, telecommuters in other states wouldn't be so lucky -- and might have to pay state taxes in multiple states on their entire salaries. The original telecommuter appealed all the way up to the Supreme Court, but the Court has decided not to hear the case -- meaning states are now free to start taxing out-of-state telecommuters on their entire salaries.

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  1. identicon
    dorpus, 31 Oct 2005 @ 1:55pm

    Per Diem

    That's why you should hop around East Coast states and get half your income tax-free by calling it "per diem". Silicon Valley folk aren't very knowledgeable about this option, because California's too big. If you maintain a residence in one state while working in another, it's considered an economic "hardship".

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

  2. identicon
    Bob, 31 Oct 2005 @ 2:16pm

    No Subject Given

    If you don't live in New York, you don't want to come here. This kind of crap is typical. A few years ago, they were sending NYS tax agents into PA scouting for NY license plates in PA malls. Then they'd contact the owners of the cars trying to collect sales tax on items purchased in PA.

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

  3. identicon
    Roger, 31 Oct 2005 @ 2:17pm

    Non-resident state tax

    Generally, if you live in a state with an income tax and you are liable to another state for taxes on income earned tin that nonresident state, you will get a credit on the home state tax liability.

    Example: I live in NJ but work in NY. I pay tax to NY on my NY-sourced income (though not on my wife's NJ-sourced income or our interest/dividends, etc). On our NJ resident income tax, we get a credit for most of the taxes paid to NY against our NJ tax.

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

  4. identicon
    Anonymous Coward, 31 Oct 2005 @ 2:40pm

    No Subject Given

    What about tech support for every state? I remote control computers in other states all day long. Do I need to fill out 50 tax forms and pay taxes to every state?

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

  5. identicon
    Anonymous, 31 Oct 2005 @ 2:41pm

    Good ol' SCOTUS

    Good ol' SCOTUS; they can't take the time to hear this important case, but they're taking the time to hear that case on Anna Nichole Smith's gold digging.

    Hey, everyone, get the feeling this country isn't yours anymore, if it ever was?

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

  6. identicon
    Anonymous Coward, 31 Oct 2005 @ 2:54pm

    No Subject Given

    Yet another reason to support the Fair Tax.

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

  7. identicon
    effing state tax offices..., 31 Oct 2005 @ 3:36pm

    Re: No Subject Given

    Think that's screwy? I live in VA which sent me a tax bill a few years ago for the time I spent working overseas as a manager for the military retailer AAFES. Apparently they figured I must owe them the money since my tax return for the year in question was filed inside the country (Arizona) shortly after I returned from overseas. I explained when I got the bill, 3 years after I'd filed the return that: VA wasn't my home of record though I'd lived here before going overseas, I wasn't responsible for not taking out any state taxes - my employer was. AND being overseas I had no benefit of any state sevices whatsoever. I was given a choice, either setup a payment plan or have up to my ENTIRE paycheck garnished until the debt was paid. If this wasn't bad enough, when I'd lost my job 3-4 years ago I was denied any state assistance (only time I'd ever asked for it) because I owned a car. I was told that I should sell my car and then I'd be qualified. Even though this areas lack of dependable public transportation would have made it far more difficult for me to get a job with no car.

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

  8. identicon
    dorpus, 31 Oct 2005 @ 4:31pm

    Re: No Subject Given

    Oh yeah, that sounds exactly like the surreal collection bill I got from Loudoun County, VA, 5 years after I lived there. They demanded a "parking fee" of $107 for a car I sold soon after moving to Loudoun County, because parking a car in Loudoun County is a "privilege". 5 years later in California, they sent me a collection bill, but I ignored it.

    Will they send me another bill 5 years later?

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

  9. identicon
    telecomute squirrel, 31 Oct 2005 @ 4:46pm

    why telecomute anywhere in particular

    Just move the whole mess to tennessee, and forget about any new york infrastructure at all. This will eventually be a reason to leave anywhere that does not want to play fair over taxation.

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

  10. identicon
    Anonymous Coward, 31 Oct 2005 @ 5:05pm

    Re: Good ol' SCOTUS

    No, it's just you.

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

  11. identicon
    Anonymous, 1 Nov 2005 @ 1:48pm

    No Subject Given

    Can this be turned around? My company does business in all 50 states.

    Perhaps any/all of my knowledge workers who live in states that have income tax are really telecommuting to states that don't when they work every day. Wow, no taxable salary!!

    And SCOTUS won't here the case...! Bingo, we win!

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

  12. identicon
    Igor B., 4 Jan 2006 @ 4:12pm

    Re: Non-resident state tax


    My question is as follows:

    I live in NYC, and I work in NJ.

    I pay NJ taxes, which are automatically taken away from my paycheck.

    Do I have to pay NY taxes as well?!?

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

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