Slashdot Mirror
Telecommuters May Owe Extra State Taxes
marct22 writes "According to Cnet News, the US Supreme Court refused to hear an appeal by a Tennessee programmer who was forced to pay extra taxes because he was telecommuting to a job in New York. Apparently he worked in NY 25% of the time, which he didn't argue about, but the other 75% of the time he worked from home in Tennessee, which doesn't have income taxes. Also, it appears that right now, for those of us who live in one state and telecommute in another may be doubly taxed if both have income tax. There is a Telecommuter Tax Fairness Act in the Senate, but it has not emerged from committee so has not been voted on."
Seriously, I would owe taxes in a lot of states if this were taxable. Shouldn't you just tax a person in his place of employment if he is a remote worker?
Programmers working in India who are using Servers hosted in the USA to do development for a US firm will owe US Income Tax ;)
Speaking as someone who lives in London, UK, and is employed by a New York-based company, and pays UK taxes, I think I see a flaw in your argument.
Taxes pay for the services that you use. Is this guy using the roads to get to work? Are his kids going to the schools? No! Why should he pay for that stuff? The taxes he pays in his home state cover this stuff in his home state. The people who live in the other state should be paying for those services provided there.
This is why the US of A needs the FairTax.
It would do away with all this income tax malarkey. At least at the federal level. Once that happens, it's a good bet that individual states would follow suit.
"Michael, I did nothing. I did absolutely nothing - and it was everything that I thought it could be."
I think you're forgetting what those taxes are for. It may seem like it but taxes aren't there just to take your money. They're there for the government to provide services (such as roads, police, etc) for those people that make use of them, the residents. Hence, if you aren't a resident of a state and benefit in no way from the services that the government there provides, why should you be paying taxes to that government?
Screw that! Does he utilize any New York resources? Does he get the right to vote? No taxation without representation? Taxes paid while visiting in New York, or even taxes paid on wages earned while physically in New York are a little more understandable.
If they decide to tax this guy under the auspices that he is drawing an income on NY economy, then they should FULLY TAX all of the Indians who work at call centers for NY companies!
If you're in the military you can choose your "state of residence" and that's the state that you actually pay taxes to, not the in the state that you work. Florida is a brilliant choice because there is no income tax. So even if you live in New York, you won't pay New York income taxes. I find it somewhat ironic that a telecommuter pays taxes in New York without actually living there whereas a Military officer would live there and not pay taxes.
Caveat: This might have changed in the past 4 years, but I know in 2001, that's how it worked. The military has been, as of late, cracking down on people who claim non-tax states as their home while having no plans of ever actually living in that state or having any ties in that state.
Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.
"What about people who live next to state lines? Surely there are other cases where people live in one state and work in another."
Yup. I live in NJ, work in NY. Pay income taxes to NJ, NY, Federal Government. If they reinstate the commuter tax in NYC, I will also pay income tax to NYC (I did until about 4-5 years ago). Pay sales tax in NYC to the city, the county, and the state. Pay sales tax in NJ to the state. Pay property tax to my municipality in NJ. My wife pays gas tax in NJ -- I take mass transit (but still pay for roads via taxes).
The way I see it, people should pay income tax in the state that they earn the income, not the state in which they reside. If my home state wants to tax me for simply importing cash into their state, that's a problem -- since import taxes between states are illegal in the US. Besides, when I spend cash in NJ, they get to tax it then.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
It's always been my impression that this type of thing wouldn't fly, that you were just taxed in the state you live in. For an example around me, DC would dearly love to tax commuters from MD & VA who pour into the city every day yet provide no direct taxes. Every time DC tries to implement such a commuter tax, they're shot down. I didn't realize that states could do this - I assumed that if you lived in CT and worked in Manhattan, all your income tax would go to CT. Guess I was wrong.
That's the whole point of the Republic.
New York's laws stop at the New York border.
Tennesee's laws stop at the Tennessee border.
The fact that he did not "actually shift his carcass over the state line" (at least 75% of the time) is highly relevant.
-ajb
I also live in London, and I think we both know the difference between Income Tax and Council Tax. Nobody is asking this guy to pay for local amenities. However, after doing a bit more Googling, I think that the issue is not that he is being asked to pay Income tax in new York for his telecommuting, but rather that he is being asked to pay that tax on his full income, without regard for where he earns it.
Modest doubt is called the beacon of the wise. - William Shakespeare
100% of taxes levied against businesses are paid by their customers or the company will go out of business.
They can also be paid by employees via lower wages, or stockholders via lower profits. Your central point is correct though: every tax is ultimately paid by a human being, but that's not obvious to most people which is why politicians like to "tax" businesses.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
Disclaimer: I am not a Tax accountant, but I AM an Expat
It's also exempt from Income Tax. I think you also have to be on an overseas payroll. If you're on the payroll of a US company, they still take out FICA/Medicare.
HOWEVER, you MUST be out of the US 330 out of a 365 day period. For example, if I leave the US on 01-NOV-2005, then until 01-NOV-2006, I can only be in the US a total of 35 days, or else I owe taxes on that 80,000. There's a form you fill out with your employer (I think its form 679... I just did mine for 2006) that will keep your employer from deducting any taxes on the first 80,000.
Non tam praeclarum est scire Latine, quam turpe nescire
-- Cicero