Posted on 02/01/2021 8:25:19 AM PST by NohSpinZone
Can a state collect income tax from nonresidents working remotely for in-state businesses? Massachusetts, New York and some other states claim they can, and now New Hampshire is asking the Supreme Court to protect its citizens from this tax grab.
Tens of millions of Americans have been working from home during the pandemic, including an estimated 2.1 million who used to commute to the office across state lines. Enter Massachusetts, which in April adopted an emergency regulation declaring that nonresidents employed in the state before the pandemic must still pay its 5% income tax even if they are working remotely.
(Excerpt) Read more at wsj.com ...
I really hope New Hampshire wins because California will be all over this and impose their own taxes on employees who got out but still work for CA companies.
It’s a new type of “unitary tax.”
At one time (don’t know if its still true) Cali had a corporate tax which was based on all income, not just income earned in the state.
If I am living in New Hampshire and working remotely for a Massachusetts company, then how would MA have any knowledge of who I am and how much I owe in taxes?
ANSWER: Because my employer is located in Massachusetts and processes the payroll there.
These employers could get around this problem very easily by establishing a minimal corporate presence in New Hampshire and paying these employees through that separate entity.
Smart. It might come to that. Or the SCOTUS can grown a brain and reinforce the idea that, in America, there is no taxation without representation.
Yep I bet the California Franchise Tax Board is expecting me to pay California Taxes on earnings from an online school I’m teaching at. Not only am I not in California, but I’m not in the USA at present.
There was something similar when the sinfully greedy governors such as Gretchen Whitmer in Michigan got into position to be able to tax the Michigan residents for Amazon and other online purchases to their homes in Michigan.
Remember, no one at that time was doing work & business in Michigan, had a MI address, or dealt within the state for any transaction. So what was the tax for? A person bought an item made in say, Iowa, and shipped from Ohio, but arrives at their home in Michigan. And now the courts ruled the state CAN tax with local sales tax. A shame.
There was a court delay about “having a presence within the state” that led to some token warehouses of Amazon to appear. Amazon also wanted to crush any lingering brick and mortar local small businesses, too.
This is good news. We need to encourage every state to be jealous of money and power possessed by other states and federal gov.
This moves the corruption/power to more local situations. Divide and conquer. Divide is only half the battle, don’t forget the conquer part.
Your example will be a fascinating one for sure. Let’s take it one step further: What about employees who are citizens of foreign countries? Are they going to pay state income taxes too?
Yes, there are cases where "taxation without representation" is legitimate. Income taxes are paid in the jurisdiction where you work, regardless of whether you live there or not.
When Democrats pack the Courts they’ll be able to tax people living in Red States...
You know, they have “sooooo much respect for the Constitution” and our laws... (except they’ll throw them all out to get their hands on cash that isn’t theirs...)
Words are cheap - actions matter...
A. Where do you live?
B. Where do you work?
Income is taxed at the place where it is earned. If you live in another state your home state may require you to file a tax return and report the income, but in my case the "home" jurisdiction gave credit for the taxes paid to the other jurisdiction -- so the taxpayer often owed nothing to the "home" state.
Simple example using round numbers and no deductions ...
1. You live in Connecticut.
2. You work in New York.
3. You earn $100,000/year.
4. New York's state income tax rate is 5%. You pay New York $5,000.
5. Connecticut's state income tax rate is 4%. You file your Connecticut tax return and report your $100,000 as income, but you also report that you've paid $5,000 to New York.
6. Your Connecticut tax liability of $4,000 is offset (and then some) by the $5,000 you've already paid to New York.
While it happens, and it's legal, it still smarts because, well, you have no representation.
Yep I bet the California Franchise Tax Board is expecting me to pay California Taxes on earnings from an online school I’m teaching at.
Then move to the jurisdiction where you work. Or work somewhere else.
Hi.
Methinks we don’t throw the tea into the harbor this time, but the politicians that suggest such tyranny.
5.56mm
When democrats pack the Courts they'll make it 'legal' for New York City to impose an income tax on Florida residents. Florid residents who have never worked or even visited New York.
When democrats pack the Courts they'll make it 'legal' for New York City to impose an income tax on Florida residents. Florida residents who have never worked or even visited New York.
OK. Let me know when that happens.
Or, just move their corporate presence outside of Massachusetts.
They could move it to a tax freindly state such as Nevada, Texas, or Florida, or even off shore.
No reason to subject your employees who work online to more taxes than necessary.
Also could you vote in the the company’s home state Elections? You know no taxation without representation........
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