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New York Court Says Telecommuters Must Pay NY Tax
hal9000(jr) writes "The Boston Globe is running this
story on an out-of-state programmer working for a New York company who had to pay state taxes. '"New York has the right to tax 100% of a nonresident employee's income derived from New York sources," according to
the 4-3 decision by Court of Appeals. The court relied on a fairness rule called the "convenience of the employer" under law that says a worker's income is taxable if he chooses to live outside the state, as opposed to if he or
she was transferred there.' The dissenting opinion: 'Judge Robert Smith argued that the basis of the majority's decision that all income is taxable is "that the commissioner says it is ... The majority cites no authority at all, and offers no persuasive reason, in support of this new interpretation."'"
By the same logic, it's for my (and all my coworkers') convenience that the Delaware based media company I work for's main office is in NYC and therefore I should ask NYS for a refund for the past 4 years. This is a dangerous precedent. -Mike
Give me the right to vote, and I'll pay your damn taxes. Till then, up yours. I've got tea, you've got a harbor.
So what if, hypothetically, I live in NY and telecommute to Florida? That should mean that 100% of my income is [i]non[/i]taxible by the state of NY, right?
Or is the rule just "if we want your money, we can take it"?
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
Topic says it all, and it's not rhetorical. I'm really curious about this.
File under 'M' for 'Manic ranting'
Do these have to pay the same taxes aswell?
this from the state that raised cigarette taxes then went after people getting them out of state. if the music industry needs to look at its business model, governments need to look at their taxation model - both a looking for all the cash they can get.
always mosh clockwise
He doesn't use NY roads, his kids don't use NY schools, he deosn't get to vote for NY legislators, senators or anything, he doesn't use NY public transport. Why should he pay NY tax?
PS: I am a NY resident myself.
I also think this is going to get appealed to the Federal courts.
I should hope so, this bit got me from the article:
"New York provides the job, New York provides the professional opportunity, and New York should be able to tax that income, even if the employee for his own convenience was working outside of New York state," said Marc Violette, spokesman for state Assistant Solicitor General Julie Mereson, who won the case.
Actually the company provided the job and opportunity and New York had nothing to do with it. As I see it, the employee isn't using NY roads, schools, police or fire services, hospitals, or really any NY public service (which is the reason a state collects taxes, no?), so why should an employee like that have to pay NY state taxes?
Nope, I don't buy into that line at all. If it stands mabye he can send his kids tuition bill to NY marked "payment due"...
When did taxes become a natural law? I thought that taxes were derived from the people of the area where the taxes were used for the purpose of SERVING those paying the tax. It gets kind messy when talking about the Federal Government but it's pretty easy with regards to the States. Especially when one does not reside in the state.
This is just plain wrong. IMO.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Why was this even tried in a state court? It's a case of interstate commerce...wouldn't that fall under federal jurisdiction? The fact that the state court didn't dismiss the case outright, to me, shows their bias and/or incompetence. Anybody have any insight into why a state court would hear this case?
Being taxed on his entire salary seems ridiculous to me.
The state in which he is a resident will allow him to deduct the amount of taxes paid to other states.
That would be tax reciprocity... I know some states only have agreements with bordering states and I'm not sure how those agreements work with differing rates in all. The issue here would be that TN has no income tax on regular employment income so what would you be deducting that tax from?
-Mike
I'd want them to start to have to pay for school, roads, parks, police, etc here in Arizona. That's what your lower-level (as in less than federal) taxes fund. In the case of state taxes it's all state highways, and roads on state lands, the state universities, DPS, and so on. In other words: things I and my community use.
New York helps pay for none of that, regardless of if I work for a company based there or not. Thus, I don't see any possible reason why they need the money. Arizona needs it because living here I use those services. I don't live in NY, they don't need it.
So ya, if they give me the right to vote in state elections, and start sending money back to my state to pay for things, I'll call this fair. Until then, I'm saying it's an issue for federal court.
How does bullshit like this get modded up?
Were you born yesterday? The term "activist judge" has been around long before the Bush administration.
The judges are supposed to interpret the constitution. Period. They are not tasked with "protecting the minority from the majority" or any other purpose you dreamed up. I'd suggest reading the constitution some day. The task of protecting the minority from the tyrrany of the majority goes to the constitution and the rules set in place for amending it.
The term activist judges applies to judges who rule based on what THEY think the law should be - not on what it is. The task of amending the constitution and making laws belongs to the legislature who is elected for this specific purpose. Specific rules have been defined in the constitution for how this should be done. The judiciary is not entrusted with this responsibility.
Just because you like the decisions a particular set of judges make, doesn't make it right or constitutional.
Mmmm.. Donuts
You very clearly have no idea what you're talking about. +5 insightful means that apparently the mods are newcomers to the term activist judge as well.
An activist judge is one that, rather than ruling based on local, state, or federal laws, or on the constitution, bases his or her ruling on something else. Usually, this amounts to "because I want it to be so" or "we think it makes us look good." Gay marriage is just one of these cases. So is the taxation case that started this topic. It is not based on local, state, or federal laws, and it is not based on the state/federal constitution.
In the MA case, the judges issued a ruling REQUIRING that the state legislature write a law legalizing gay marriage. This is a very clear violation of separation of powers. The court does not have the right to write laws, any more so than the governor has a right to decide trials. Furthermore, and most importantly, no branch of government has the right to exert direct control over the activities of another. The court had no basis in the MA constitution, which it cites, for its decision. They plucked a passage from the article, and have intentionally misrepresented what was written in order to justify their agenda-based decision. (The constitution was not intented to extend marriages to gay couples - just look at who wrote it.) This is similar to a semi-recent case in which the supreme court cited laws and constitutions of other nations to justify a ruling. 'Nice try.'
the judiciary branch is increasingly the only branch of government that an average person can actually use to get anything accomplished.
No, the average person does not necessarily want the rulings of an activist judge. Gay marriage was on the ballot in 11 states in 2004. It lost in ALL of them. Very clearly the "average" person does not want it in their state. While the judiciary -- working mainly through JURIES, not judges -- is a check upon the misbehavoir of the various branches of government (including, hopefully, itself), the government still exists to serve and implement the will of the majority.
The NY case is one in which the state's tax collector egregiously overstepped its rights to taxation. The NY tc should not have jurisdiction over the monies earned via telecommuting. What's next? Charging income tax for people who route their VPN packets through NY, on their way from NH to FL? The dissenting judge is correct and I hope the case is overturned.
Taxation Without Representation
It's really that simple. I am not sure why the courts cannot understand it. Any third grader in a history lesson can understand that.
Other than having a job in Anytown, USA:
I would think that any of the founding fathers would not stand any of this ridiculousness. It was a foundation of a revolution.
Of course, I may be a little facetious, but taxation is just out of control.
Whew! I feel a little better.
Coderz 4 Life
So, do you get to vote in both states?
No taxation without representation and all that jazz...
all the best,
drew
FreeMusicPush If you want to see more Free Music made, listen to Free
You may not get back as much as the full time resident but you are still using NY's infrastructure.
False. The state of New York does not own the phone lines, cables, or IT infrastructure that makes this possible. In fact, the state of New York already taxes the entities who do own these things.
You also get an benefit from telecommuting (less commuting time to office, lower property taxes, etc..).
Irrelevant and misleading. The state of New York gets a greater benefit of you not causing wear and tear on the infrastructure actually owned by the state (roads, bridges, schools, libraries, etc) while you generate revenue for a corporation based in and taxed by the state of New York, revenue which adds to the state tax coffers.
Finally, if its so wrong, why not just work in your home state (answer: you'll get a salary you'd probably never be able to get in your home state).
The point is that the person in question is working in his own state. For example, I have a friend who works for a company based in the state of New York with employees many different states. Many of those states believe (correctly, I believe) that they have the right to be compensated by means of their tax systems for the services provided to the employees of this company. It is very unlikely that many of the other states in question would be impressed by the argument that those employees are not actually working in the states in which they actually do work.
Ultimately, the questions raised by the avaricious exploitation by the state of New York of out-of-state employees of a company based in New York are a matter of interstate commerce, and therefore subject to the jurisdiction of the federal government.
Someone needs to do SOMETHING about these judges making laws out of thin air.
Clearly this ruling is contrary to the interstate commerce clause of the Constitution. By this court's "logic" Everyone employed by any company has to pay taxes to EVERY municipality and state that the company has a presence in.
People love to talk of the greed of corporations for money, and that talk is somewhat justified. Too little and seldom, however, is the talk of the greed of GOVERNMENTS who think they have a God given right to a "cut" of all money that flows through the economy.
When is this court going to demand income taxes from all those offshore Indian programmers that I'm sure more than one NYC basef firm employs?
In the long run, if this were to stand, and I think it won't, because federal judges, being bigger pompous asses than even state judges, won't stand for federal authority to be usurped, this tax scheme would have a DEVASTATING effect on NYC and it's economy.
Corporatism != Free Market