Any telecommuting fpDevelopers watching this?

[Ron Kracht]

Kenneth Brody wrote:

>Quoting Walter Vaughan (Wed, 30 Mar 2005 07:20:46 -0500):
>
>  
>
>>Seems the state of New York thinks that it has nexis[0] if you remotely
>>perform work  for a company located in NY. While at first glance this is
>>a reasonable request of the state, it's probably apply to independent
>>contractors soon.
>>
>>
>>    
>>
>http://yro.slashdot.org/yro/05/03/29/2347245.shtml?tid=98&tid=123&tid=103&tid=17
>
>Given that New York is claiming that it has the right to tax 100% of
>the income derived while working for the New York company, are they
>also saying that they cannot claim any tax on people who are in New
>York but work for companies elsewhere?  (Yes, I know it's a rhetorical
>question.  We all know that they want to tax both sides.)
>  
>

If you read more detail about the decision there are a couple important
qualifiers.

1) You must be an employee of the company - not just someone doing work
for  the company.
2) You must be living out of state for your convenience not for the
convenience of your employee.

The arguments raised and the laws and the logic used to support the
ruling seem to me to  preclude it from being used for consultants.

>As someone else mentioned, if New York is claiming it can tax it, and
>you know the worker's home state is claiming it as well, people are
>going to be double-taxed.  Sounds like one of those times when a
>federal court really does need to get involved.  Either it's the
>place where the worker is physically located, or it's where the work
>is being "done".  (And they need to define how one determines where
>the work is being "done" in this age of networked systems.)
>
>  
>
This is not a new situation and it's not unique to NY.  20 years ago I
lived in NY and worked from home for a company in New Jersey.  NJ taxed
that income as though I lived in NJ.  NJ didn't care if I commuted or if
I telecommuted or if I  only went into the office for a few hours a week
- I earned the money in NJ and they were going to tax it.  NY also taxed
that income but gave me credit for the taxes I paid to NJ.  Although it
does make filing your taxes an even bigger pain it becomes a more
significant issue when the state of residence does not credit taxes paid
to the state of employment.