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Telecommute Tax Relief Gathers Steam

ScuttleMonkey posted more than 8 years ago | from the double-whammie dept.

339

coondoggie writes to tell us NetworkWorld is reporting that backers of new telecommuter friendly tax legislation have high hopes that this might be the year that it sticks. From the article: " If passed, the Telecommuter Tax Fairness Act would prevent states from taxing income that nonresidents who telecommute to an in-state employer earn while working from home. The legislation is aimed in particular at New York, which is legendary for its stance on nonresident teleworkers. It requires those who sometimes work in the office of their New York employers to pay state taxes -- not only on the income they earn while physically in New York, but also on the income they earn at home. This often results in a double tax when the telecommuter's home state expects tax on the income the telecommuter earns at home."

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first post! (-1, Offtopic)

Anonymous Coward | more than 8 years ago | (#15389271)

ha!

This is Funny! (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15389493)

hah hah, made you look
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It'll never pass (3, Insightful)

Jason1729 (561790) | more than 8 years ago | (#15389278)

This legislation is aimed to help average workers. There's little benefit for big business or legislators. It will never pass.

Re:It'll never pass (1)

user317 (656027) | more than 8 years ago | (#15389295)

This legislation is aimed to help average workers. There's little benefit for big business or legislators. It will never pass.


Yea, big buisness doesn't benefit when consumers have more money, brilliant.

Re:It'll never pass (1)

Jason1729 (561790) | more than 8 years ago | (#15389302)

By that logic, big business should always be lobbying for lower personal taxes.

Re:It'll never pass (1)

MindStalker (22827) | more than 8 years ago | (#15389554)

Umm most do.. well of course that isn't their primary lobby but its certainly a theme. The important thing is that their telecommuters will now be bringing home money, this will mean that they don't have to provide the next round of payraises..

May 23:Prostitute Schedule @ MBOT in San Francisco (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15389335)

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Unlike Las Vegas, San Francisco does not regulate prostitution. So, the MBOT heartily welcomes everyone -- including HIV-positive customers.

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Crazy Horse
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Gold Club
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San Francisco, California

Re:It'll never pass (3, Funny)

Anonymous Coward | more than 8 years ago | (#15389413)

It does.

Considering all of those telecommuters in India!

Re:It'll never pass (1)

truthsearch (249536) | more than 8 years ago | (#15389570)

It has far better chance of passing on a per-state basis. They should heavily lobby the NY state legislature to change their tax code. I'm assuming they aren't doing this currently. But I get the feeling lobbying for anything which reduces state income will be very very hard to pass.

Re:It'll never pass (3, Insightful)

Jamil Karim (931849) | more than 8 years ago | (#15389585)

Never underestimate the power of an election year. It just might pass.

Re:It'll never pass (3, Interesting)

triskaidekaphile (252815) | more than 8 years ago | (#15389615)

Not good for big business? Exactly what is the biggest expense that business has to pay in the United States?

Answer: Salary

So please, raise your hand with me if you would be willing to be PAID LESS if you could WORK FROM HOME?

Re:It'll never pass (1)

Total_Wimp (564548) | more than 8 years ago | (#15389666)

This legislation is aimed to help average workers. There's little benefit for big business or legislators. It will never pass.

You have to wonder. The GOP was all hot and bothered about eliminating the capital gains tax which they referred to as "double taxation." Will they fight for relief of this tax which really is double taxation?

The main difference between the two: Rich guys get capital gains while average folks telecommute.

I think the GOP has a chance to show what kind of a party they really are. I hope they surprise me and support this.

TW

not using infrastructure (4, Insightful)

P3NIS_CLEAVER (860022) | more than 8 years ago | (#15389284)

This is only fair, if you aren't using the infrastructure of the city you shouldn't have to pay for it.

Re:not using infrastructure (1)

dkoulomzin (320266) | more than 8 years ago | (#15389325)

First, they're talking about State taxes, not city taxes.

Second, it doesn't follow that just because you're working outside of the state that you aren't making use of the state's resources. Ever wonder why so many businesses are located in Manhatten? Its not because of the low-low prices of real-estate.

Re:not using infrastructure (1)

Kadin2048 (468275) | more than 8 years ago | (#15389546)

I fail utterly to see how I am consuming any resources in NYC by calling/videoconferencing/emailing people there, which are not otherwise being paid for privately. The phone and data lines are being paid for by the recipient of the call. I'm not using their roads, I'm not using their sewer lines, and I'm not using their water (would be paid for anyway), libraries, emergency services, schools, or dog catchers.

If a company wants to have a NYC address, they can have that NYC address: and they should pay real estate tax, corporate tax, and the people who work there should pay income tax. Because they are all using services from that area, by virtue of their physical presence.

Remote workers are not using any resources, and should not be paying any taxes. They should be paying income tax in whatever state they're sitting in while doing the work. It's those states that are getting screwed (if they have reciprocity agreements with NY), since they're actually getting their services used by someone who isn't paying any taxes!

Taxing people on where they're physically located while they do the work is fair for everyone. It gives the municipalities that are actually responsible for serving those people the revenue stream they're owed, and also lets people choose where they want to live based on the tax structure. People should be able to choose where they want to live based on the taxes they're going to have to pay and the services they think they're going to get there. It's a value proposition, just like everything else in life. Only right now, this bizarre system of tax laws keeps people tied to where their employer chooses to be located, even if that's nowhere near where they actually are.

Re:not using infrastructure (3, Interesting)

dkoulomzin (320266) | more than 8 years ago | (#15389670)

I'm not advocating double-taxation, which I agree would be unfair.

What I'm saying is that the very fact that your employer can employ you at all has at least something to do with taxes at its location. Businesses don't choose NYC for its cleanliness or safety. They choose NYC because it is a great place to do business. That's because of the infrastructure that taxation of wages at least partially provides. So your taxes are bolstering the infrastructure that makes your job possible. (Not that I feel in any way that taxes person A pays should exist soley to make person A's life better, but since you seem to, I'm putting this in your terms.)

Just so you know, if you telecommute to an employer in NYC: if you're sacked, its NY unemployment benefits that you draw. If your actions result in criminal negligence, you'll be tried in NY. Your employer is paying payroll tax in NY. Your rights as a worker are those of a New Yorker, and are enforced in and by the New York legal system. I fail to see how you "fail utterly to see" how a telecommuter doesn't consume (expensive) resources in the state in which he or she is actually employed.

Re:not using infrastructure (0)

Anonymous Coward | more than 8 years ago | (#15389604)

Third, you're feeding a troll named P3NIS_CLEAVER who masterfully started a sentence with one thought that developed into another thought and just kept right on going.

taxation without borders (1)

cez (539085) | more than 8 years ago | (#15389292)

Odds are they aren't going to get that around city taxes for telecommuters, such as in Yonkers and Manhattan, but could be a good deal for the state taxation purposes. Although I'd hate to see spammers taking advantage of this somehow.

Not much of a concern. (1)

Kadin2048 (468275) | more than 8 years ago | (#15389377)

Although I'd hate to see spammers taking advantage of this somehow.

I doubt very much that spammers pay taxes anyway. Unless you count the bribes they're probably paying to the Russian mob as "taxes."

Re:taxation without borders (1)

F_Scentura (250214) | more than 8 years ago | (#15389470)

I know a good many if not most spammers and scam-artists reside here in Florida, where we don't pay taxes either way.

Re:taxation without borders (1)

Red Flayer (890720) | more than 8 years ago | (#15389623)

City tax for Yonkers and Manhattan doesn't apply to out-of-state workers anyway. Lucky for me.

How could they make you pay it anyway? (3, Interesting)

Just Some Guy (3352) | more than 8 years ago | (#15389303)

I never really understood this complaint. I live in the midwest. If I do some remote work for a client in New York, how do they expect to collect New York income tax from me? Do they have any legal recourse whatsoever to try to collect?

What if my local employer opens a branch office in NYC. Do I owe NY taxes then, even though I don't work there? What if I do some remote administration for that office? What if they're connected via VPN and I occasionally browse fileservers on their LAN? At what point do I cross the line where they mistakenly think I should pay them something?

I'm glad to see this legislation go through, even though I think it's incredibly stupid that there's a need for it.

Re:How could they make you pay it anyway? (5, Interesting)

charleste (537078) | more than 8 years ago | (#15389336)

Their legal recourse is to first bill you, then get a judgement (in NY) against you, and then your wages (from anywhere) are garnished. You can't just "not pay". Sucks, don't it? As far as how your "locale" is determined - that's up to your employer. I am a 100% telecommuter - in Colorado, and my "office" is in Tampa, FL.

Re:How could they make you pay it anyway? (1)

Just Some Guy (3352) | more than 8 years ago | (#15389453)

Their legal recourse is to first bill you, then get a judgement (in NY) against you, and then your wages (from anywhere) are garnished.

Should it ever come up, remind me to get a local judgement against Bloomberg for some fictional fee.

As far as how your "locale" is determined - that's up to your employer.

OK, then. Is there any incentive for your employer to list you as a NY employee?

Re:How could they make you pay it anyway? (1)

powerlord (28156) | more than 8 years ago | (#15389499)

OK, then. Is there any incentive for your employer to list you as a NY employee?


Their offices are in New York, they file taxes in New York, the servers you're telecomuting are in New York, and they don't have any other offices?

A better question is: "Why don't more buisnesses move out of New York?"

Re:How could they make you pay it anyway? (1)

IAmTheDave (746256) | more than 8 years ago | (#15389552)

A better question is: "Why don't more buisnesses move out of New York?"

Financial capital of the world?

Besides, they don't give a shit how you and I get taxed.

Re:How could they make you pay it anyway? (2, Insightful)

z0ot (598478) | more than 8 years ago | (#15389616)

Note that New York State is more than just New York City. The truth is that upstate many high-quality jobs *are* moving to other states due to high taxation, usually in areas where the loss of such jobs can further cripple an already devastated local economy.

Re:How could they make you pay it anyway? (1)

killjoe (766577) | more than 8 years ago | (#15389653)

Don't bet on it. There are very good reasons to stay in an area where air travel is cheap, the labor pool is huge, and there are more CEOs per square inch then any other place on the planet (maybe except hong kong).

If you are selling your stuff to businesses you need to shcmooze with them. You need to be able to meet at the ultra chic bar or restaurant to wine and dine the CEO. When you get together you need to be able to talk to him/her in a common vernacular about shared experiences. You can't just pop on a plane from iowa and talk about the mets or the traffic on 82nd.

There is a reason why businesses stay in NY, LA, Chicago or Dallas. Taxes are a just a small part of the whole equation.

Re:How could they make you pay it anyway? (1)

jcr (53032) | more than 8 years ago | (#15389673)

There is a reason why businesses stay in NY, LA, Chicago or Dallas.

There is also a reason why businesses with their nominal HQ in Manhattan open satellite offices in Hoboken, Greenwich, etc.

-jcr

Re:How could they make you pay it anyway? (2, Informative)

Just Some Guy (3352) | more than 8 years ago | (#15389655)

The truth is that upstate many high-quality jobs *are* moving to other states due to high taxation, usually in areas where the loss of such jobs can further cripple an already devastated local economy.

The scary part is that many of the upstate residents think their taxes are perfectly reasonable. My father-in-law thinks it's awful that I have to pay for garbage pickup, since the city of Buffalo provides his for free. Never mind that he's paying twice the taxes on half the house that I am; that extra $2500 a year will go a long, long way toward covering a $20/month trash bill.

Re:How could they make you pay it anyway? (1)

esme (17526) | more than 8 years ago | (#15389685)

OK, then. Is there any incentive for your employer to list you as a NY employee?

Inertia. I telecommute full time from Florida (and previously from England) to California. My employer kept reporting my income as CA income. I don't think there's any definite policy on it, though. I wasn't able to get a straight answer from anybody I talked to, and the wording of the tax pubs all lean towards reporting income as CA income. So it was up to me to convince them my income shouldn't be taxable by CA since I performed my work somewhere else.

I got my employer to amend my W2. So now CA seems fine with me not paying them state taxes. Though I don't know how CA and NY law differ.

-Esme

Re:How could they make you pay it anyway? (1)

thePowerOfGrayskull (905905) | more than 8 years ago | (#15389339)

I never really understood this complaint. I live in the midwest. If I do some remote work for a client in New York, how do they expect to collect New York income tax from me? Do they have any legal recourse whatsoever to try to collect?

In your case, you might be able to get away with it. The people who work W-2 jobs via telecommuting don't have that option.

Re:How could they make you pay it anyway? (1)

hal9000(jr) (316943) | more than 8 years ago | (#15389404)

1) If you are employed outside NYS, then you don't have to worry.

2) If you are employed by a NYS company and you live in a state that doesn't have an office, then you could get taxed if you enter the state on business (You can enter for pleasure).

3) If you are employed outside NYS by a NYS company, and you have an office in your state that you goto, then you don't pay NYS taxes.

I think on point #2, if you are an at-will out of state employee, your living out of state becuase you want to, then you have to pat taxes. If your posted out of the state, then I don't think you will be taxed because it's not your choice to live out of state.

Check with an account though.

Re:How could they make you pay it anyway? (2, Insightful)

Red Flayer (890720) | more than 8 years ago | (#15389459)

"What if my local employer opens a branch office in NYC. Do I owe NY taxes then, even though I don't work there? What if I do some remote administration for that office? What if they're connected via VPN and I occasionally browse fileservers on their LAN? At what point do I cross the line where they mistakenly think I should pay them something?"

If you never work from the NY office, you're not a NY employee. Remote admin doesn't apply, you have to be phyisically present at NY base of operations for your job (not necessarily your company's base of operations) on a regular basis to be considered a NY employee subject to NY taxes.

Re:How could they make you pay it anyway? (0)

Anonymous Coward | more than 8 years ago | (#15389682)

If you get a check from your employer in NY, NYS taxes will be missing. If you want that money back, you will have to file a NYS tax return. On the odd chance you dont get those taxes taken out, when they find out they will get a judgement on you and pull your taxes out of whatever check you do get as one poster has mentioned.

I knew a lot of people that worked in NY but lived in PA. They still had the opportuninty ;) to pay NYS taxes b/c they drove across a line every day. They did get away with PA property taxes, so it was worth it.

Heh (4, Insightful)

SlashChick (544252) | more than 8 years ago | (#15389304)

From the article: "The U.S. Office of Personnel Management encouraged federal agencies to more aggressively promote fuel-consuming options such as teleworking in a September memo."

Darn that Bush. I always knew he was conspiring with the oil companies! ;)

Why Does Anyone Base Their Company In New York? (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15389305)

Bad weather, wind, rain snow, ice, hurricane.
Expensive everything.
Over crowding.
Traffic.
Taxes.
Rude people.
Pollution.
Crime.

New York sucks.

Meanwhile, in Florida...

Beautiful weather, barring the occasional hurricane.
Low cost of living.
Space.
Beaches.
Babes!
Traffic.
Much much much lower taxes.
Nice people.
Low pollution.
Low crime, until the New Yorkers move there.

Re:Why Does Anyone Base Their Company In New York? (-1, Flamebait)

eln (21727) | more than 8 years ago | (#15389354)

Florida? But that's America's wang!

Re:Why Does Anyone Base Their Company In New York? (3, Insightful)

dkoulomzin (320266) | more than 8 years ago | (#15389411)

Well the parent is TOTAL flame bait, but it does also need to be answered. So here's my non-flame reply.

Businesses choose NYC for lots of reasons, some of which are:
1) Lots of other businesses are there. That makes doing business more efficient, since most of it is done face to face.
2) NYSE, and other cornerstones of the financial world are located in NYC
3) Vast numbers of people to employ
4) Several world-class Universities are located in NYC or its environs, so there is no shortage of brain-power

All of these things in one way or another rely on taxes, be it for transportation or other infrastructure.

And btw, if you are employed by a company in NYC, you are taking advantage of NYC, even if you never go there. The fact is without NYC, that particular job wouldn't exist.

No, I'm not a New Yorker. I live in Boston.

Re:Why Does Anyone Base Their Company In New York? (0)

Anonymous Coward | more than 8 years ago | (#15389549)

There are many great cities in this country, but that doesn't give them the right to tax me just because I might derive some benefit from it. (directly or indirectly) When I lived in CT. and commuted into NY I had to pay NY State, NY City, and Federal Tax on my income and my wife's entire income. My wife did NOT work in NY, she worked in CT. It sucked. I solved the problem by moving to Oregon.

Now NY City and State don't get anything from me.

NY is shooting itself in the foot. When I was there a lot of businesses were moving to NJ and CT for the very reasons that it was a heck of a lot cheaper. Some of the functions stayed there, but most of them moved out. For example, Metropolitan Life in the early 1960's was the single largest private employer in NY City. Now their offices are mainly empty haviong moved most of those people out of the state. Sure Met Life is still domociled in NY; advantages as a NY Insurer, but a lot of the jobs were moved to NJ and elsewhere.

Re:Why Does Anyone Base Their Company In New York? (1)

benzapp (464105) | more than 8 years ago | (#15389702)

Sure Met Life is still domociled in NY; advantages as a NY Insurer, but a lot of the jobs were moved to NJ and elsewhere.

Not only that, the Met Life building will soon be converted into condominium apartments.

Re:Why Does Anyone Base Their Company In New York? (1)

dkoulomzin (320266) | more than 8 years ago | (#15389708)

So are you saying your wife's income was doubly taxed? Yes, that seems unjust, and I think we should seek to address that. I don't think more than one state should be entitled to taxing any given dollar you earn. However, I don't think your problem had anything to do with telecommuting (unless I missed something in your description). BTW, did you consider filing seperately? I bet that could have allowed your wife to pay CT taxes only/instead, if that better suited your desires. (And if you considered that, and chose not to file that way, then you hardly have a gripe.)

Re:Why Does Anyone Base Their Company In New York? (-1, Flamebait)

Anonymous Coward | more than 8 years ago | (#15389460)

Because Florida is a total dogturd of a state, only beaten by Texas in repugnancy. Move your company there and you'll only get utter shitbags to work for you.

Re:Why Does Anyone Base Their Company In New York? (0, Flamebait)

F_Scentura (250214) | more than 8 years ago | (#15389487)

"Because Florida is a total dogturd of a state, only beaten by Texas in repugnancy. Move your company there and you'll only get utter shitbags to work for you."

Ever been to South Florida? It *is* almost exactly how he describes. The GIT R DUNN morons are all north of here, thankfully.

New York Sucks! (-1, Flamebait)

Anonymous Coward | more than 8 years ago | (#15389313)

Another reason why New York sucks. Stay in New York, New Yahkuhs.

Re:New York Sucks! (3, Funny)

Phreakiture (547094) | more than 8 years ago | (#15389408)

Stay in New York, New Yahkuhs.

It probably won't surprise you in the least when I say.... Up yours!

Re:New York Sucks! (0)

Anonymous Coward | more than 8 years ago | (#15389517)

Yankees suck! Go Sox!!!

Free Lunch (0)

Doc Ruby (173196) | more than 8 years ago | (#15389333)

How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses? Or any of the other municipal/state costs that keep NYC such a great place to work, even virtually?

The same people pushing telecommuter tax exemption are even more insistent on corporate tax exemption. Of course, those same people want government out of the way of unrestrained corporate activity, regardless of its effects on humans - and nonprivileged corporations. It's corporate anarchy, and it looks a lot like the Dark Ages.

Re:Free Lunch (1)

PolyDwarf (156355) | more than 8 years ago | (#15389402)

Err.. I'm having trouble.. Are you being sarcastic in your first paragraph?

Re:Free Lunch (0)

Anonymous Coward | more than 8 years ago | (#15389461)

He does really sound that dumb.

Re:Free Lunch (0)

Anonymous Coward | more than 8 years ago | (#15389498)

I don't think he's being sarcastic and I agree with him.

Consider this, New York gives NewTech corporation tax incentives to base their business in New York. NewTech opens offices in Poughkeepsie and hires cut-rate workers in Mississippi. Under this legislation, New York loses out on tax revenue twice. So, you've got NewTech effectively outsourcing jobs to Mississippi. The business gets all of the benefit of being in New York and New York loses out on the tax revenue.

If an American is against outsourcing to India, then why shouldn't a New Yorker should be against outsourcing to Mississippi?

That's the way I see it. Though, I admit I don't know the specifics well enough to know if the outsourcing comparison holds up.

Re:Free Lunch (1)

Doc Ruby (173196) | more than 8 years ago | (#15389513)

No.

Here's a good test for sarcasm: take the communication at face value. Is a response ridiculous? If not, it's safe to assume you're not dealing with sarcasm.

Re:Free Lunch (5, Insightful)

Kadin2048 (468275) | more than 8 years ago | (#15389458)

How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses? Or any of the other municipal/state costs that keep NYC such a great place to work, even virtually?

I can't tell whether or not you're joking.

I'm sorry, but if I'm telecommuting into an "office" in NYC, I'm using zero services from the City of New York, that are not already being paid for by my employer there.

If I keel over at my desk onto my "virtual office," NYC isn't going to pay for the ambulance to come pick me up. When I flush the toilet, it's not NYC's sewage system that the waste is going to go into. The only reason I'm commuting to NYC at all is because there are (presumably) other people there that I want to communicate with -- after all, "telecommuting" is just a fancy word for communicate -- and those people pay taxes. So NYC is still getting their cut for the value they're providing.

This whole argument is ridiculous. What happens if a person in New York and a person in Des Moines have a discussion over a forum or Wiki, that's on a server in a colo in San Francisco. Should both people pay tax in SF? They're "working" there (they may not know it), aren't they? Oh wait, SF has already been paid -- by the company that runs the colo facility. Likewise, if I "telecommute" into NYC, whoever I'm commuting in to see is paying taxes.

New York City isn't doing anything to make itself a "great place to work virtually," they just happen to have a lot of people living there. Those people live there and pay taxes, but there's no reason why people not physically residing there should.

Your argument fails to make any sense.

In my mind, the problem here is why companies that have telecommuting employees insist on keeping them based, on paper, in NYC. If the guy works form his house in Jersey, put that down as his work location. If he works from the North Pole, put that down on his W-2. I've done remote-work jobs, and I've never used the location I'm calling-in to as my work location: I use whatever piece of ground I'm sitting on while I'm doing the work.

Computer do a lot of things, but they do not allow you to physically be in two places at the same time. All of this "tele-work" stuff just confuses the issue, which is inherently just a person sitting somewhere, in front of a computer and a telephone, talking to some other people, in a different place. There's no reason why this should be difficult to figure out.

Re:Free Lunch (0)

Doc Ruby (173196) | more than 8 years ago | (#15389559)

When the NYC company doesn't pay its telecommunting workers, the jursidiction is in NYC. Who pays for the justice system protecting that worker? Who pays for its ongoing activity that deters NYC companies from stiffing workers? Telecommuters who don't have any contact with each other, across the globe, are even more vulnerable to such attacks.

There's lots of other government expenses keeping the telecommuter's job available and worth keeping. You can cherrypick from the many expenses saved by telecommuting, like the obvious road maintenance (except for its role enabling the other services more directly consumed by telecommuters). But I asked about the services actually consumed by telecommuters. And I referred to the other end of the equation, already more advanced, where the resident corporations already pay too little taxes for the services they consume, and are even closer to paying even less. If you stop trying to rationalize a free ride at the expense of those of us who actually do pay our way, you'll have to admit they need to be paid. And that discarding them on telecommuters either underserves telecommuters, overcharges residents, and usually both.

Re:Free Lunch (1)

mrbooze (49713) | more than 8 years ago | (#15389698)

So you're honest belief is that a person who lives in State A and works for a company in State B should actually pay double state taxes to both states? If they're a consultant who travels all over the country, do they have to pay full taxes in all 50 states?

As someone who lives in Chicago, telecommutes to support a development office in California, for a company headquartered in Texas, how many state's income taxes should I be paying?

(Actual answer: I pay Illinois income taxes.)

Re:Free Lunch (1)

flooey (695860) | more than 8 years ago | (#15389592)

In my mind, the problem here is why companies that have telecommuting employees insist on keeping them based, on paper, in NYC. If the guy works form his house in Jersey, put that down as his work location. If he works from the North Pole, put that down on his W-2. I've done remote-work jobs, and I've never used the location I'm calling-in to as my work location: I use whatever piece of ground I'm sitting on while I'm doing the work.

The problem is generally when people actually do work in the office from time to time. I work for a company in California during the summer, and when I'm at school in New York during the school year I sometimes telecommute in. It makes complete sense for the company to declare my office as being in California, but currently both California and New York can claim that I owe income tax in their state for the work I'm doing while telecommuting.

Re:Free Lunch (1)

fistfullast33l (819270) | more than 8 years ago | (#15389593)

In my mind, the problem here is why companies that have telecommuting employees insist on keeping them based, on paper, in NYC. If the guy works form his house in Jersey, put that down as his work location. If he works from the North Pole, put that down on his W-2. I've done remote-work jobs, and I've never used the location I'm calling-in to as my work location: I use whatever piece of ground I'm sitting on while I'm doing the work.

Here's an interesting tidbit about New Jersey and New York income taxes. Last year, my fiance worked in New Jersey for 2 months, January and February. She then moved to Albany where she worked the remainder of the year for a different employer. She cut all ties to New Jersey once she moved, so none of her work was done there. Last month when she filed her income taxes, lo and behold New Jersey taxes people for their entire annual income, regardless of whether you earned it all in New Jersey or not. She basically had to pay income tax twice. New York, on the other hand, only taxed her for her New York income. Personally, I think that the New Jersey tax is worse than the New York telecommuter since she didn't feasibly benefit New Jersey's economy in any way after she moved. You could possibly make an argument that a telecommuter to a New York location does effect the economy there because you're conducting business there.

If you're a stock trader who lives in Jersey (a few do), and you telecommute to your desk in Manhattan to make a trade on the NYSE, isn't that affecting New York's (and some could argue the global) economy?

Re:Free Lunch (1)

jcr (53032) | more than 8 years ago | (#15389652)

I'm sorry, but if I'm telecommuting into an "office" in NYC, I'm using zero services from the City of New York, that are not already being paid for by my employer there.

SInce when has taxation been about fairness?

This is just one of many excellent reasons for locating a business in Nevada, Washington, Texas, or any other state without an income tax.

-jcr

Re:Free Lunch (1)

killjoe (766577) | more than 8 years ago | (#15389674)

NY has provided a whole slew of services to your business. Your business has chosen to be located in NY despite having the choice to move anyplace in the world. Therefore there must be something there that your business likes and since they seem to be thriving enough to hire you and let you work from a remote location they must be getting their money's worth.

In other words you might not have this job if your company wasn't located in NY.

Re:Free Lunch (1)

JustinKSU (517405) | more than 8 years ago | (#15389467)

How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses? Or any of the other municipal/state costs that keep NYC such a great place to work, even virtually?

How much does NYC pay of my telecom bill to access the network in New York? It's your Verizons or your Sprints that are paying for the infrastructure not New York City's government. Conversely how much is the company that is IN New York paying in taxes? You talk about the Dark Ages, does that include Government Greed? If I'm sitting in Kansas City (which I am), working for a company on Long Island (which I am), why the heck does NY deserve my money? The taxes I pay here will go to Kansas Schools (No evolution jokes allowed), but money I would pay to NY would be completely lost to me. I think it's only right to pass a bill of this nature.

Re:Free Lunch (1)

Doc Ruby (173196) | more than 8 years ago | (#15389582)

How can you quote the specific example of the NYC justice system protecting your job and your employer, then ignore it in your response? Sounds like you're overpaying for your Kansas schools. I don't think you need any other references to the Dark Ages beyond what we've already mentioned here.

Re:Free Lunch (4, Funny)

Fulcrum of Evil (560260) | more than 8 years ago | (#15389469)

How should NYC pay for the costs of legislating, policing, and judging the protections of the workers while they're telecommunting to NYC businesses?

Ever been mugged on your vpn?

Re:Free Lunch (1)

Doc Ruby (173196) | more than 8 years ago | (#15389605)

When your NYC company's ISP gets DDoS'ed by an extortion racket, they call the NY Attorney General. Who pays for that?

Re:Free Lunch (1)

Just Some Guy (3352) | more than 8 years ago | (#15389634)

Who pays for that?

The taxes from the NYC-based ISP.

Re:Free Lunch (1)

schon (31600) | more than 8 years ago | (#15389644)

they call the NY Attorney General. Who pays for that?

Oh, I don't know, how about the company?

Re:Free Lunch (1)

ahodgson (74077) | more than 8 years ago | (#15389645)

Since the NY AG would shrug and say "what can I do about that?", no one pays for it.

And in pretend-land, where law enforcement actually does something about computer crime, well, the ISP has employees in NY paying for it.

Much larger problem (2, Insightful)

chadliness (965871) | more than 8 years ago | (#15389338)

People being double charged for state taxes is a larger problem then just telecommuters. Many people who live close to a state line and work in another state end up double paying. Sometimes there are forms which can be used to avoid this but they are not widely publicised.

Re:Much larger problem (0)

Anonymous Coward | more than 8 years ago | (#15389556)

Most states give a credit on the home state tax for taxes paid to another state. I think only Connecticut and Illinois don't.

Most of the time, you don't actually end up paying double taxes; you just get taxed at the higher of the two rates.

Re:Much larger problem (1)

truthsearch (249536) | more than 8 years ago | (#15389630)

I used to live in CT and work in NY. In this case I can tell you I definitely was not double paying. NY transfered most of the tax witheld to pay for my CT tax. And I was required to file both NY and CT returns, so it certainly wasn't hidden.

Re:Much larger problem (3, Informative)

gorbachev (512743) | more than 8 years ago | (#15389692)

I would be surprised to find any instance of double taxes anywhere. I think the summary is just plain wrong.

You get a tax credit from your home state for taxes paid in the state you work in. Or the other way around.

If it didn't work that way, there would've been a revolt long, long time ago already.

Call me cynical... (1, Insightful)

Anonymous Coward | more than 8 years ago | (#15389341)

Hmm, a piece of legislation that could improve the lives of citizens? I wonder what sort of soul-sucking privacy-invading large-state-entitlement riders will be attached to the final bill.

Wow, it's about time. (2, Interesting)

KiltedKnight (171132) | more than 8 years ago | (#15389351)

This legislation could easily provide the kind of tax relief middle income families keep looking for so they can really put a little more away for retirement, kids' education, etc. Telecommuting already allows them to save money by not having to drive or ride public transportation all the time while leveraging something they're already paying for... a high speed internet connection.

NY has always been a problem with taxing non-residents... whether they telecommute or not.

I used to work in NYC while living in NJ. Even with going in to the office on a daily basis, NY wanted me to report all income (interest, dividends, side job not in NY, etc), then calculate the tax on that, using the non-resident scale, then multiply it by the percentage of my total income earned in NY. Net result is that I had to pay more in taxes instead of paying based solely on money earned in NY.

That only makes sense (1)

donutello (88309) | more than 8 years ago | (#15389543)

State tax rates are progressive. What that means is that someone earning $100k pays more than twice what someone earning $50k would pay. If you split your $100k paycheck between 2 states with identical tax rates, you shouldn't end up paying any less or more than someone who earned the entire income in one of those 2 state. Other states tax laws work the same way too - this isn't just NY.

No help for NJ residents (4, Informative)

Red Flayer (890720) | more than 8 years ago | (#15389364)

I live in NJ, work in NY. NJ only taxes me on income not subject to tax in NY -- not income not earned in NY. Not sure about how other states deal with state taxes paid to another state.

Sucks anyway for me, since NY state tax is approximately 2.5-3 times the NJ tax, and I derive very little benefit from the NY taxes I pay. But, for telecommuters who sometimes have to work in NY -- nice deal. Makes me want to telecommute and pay the NJ tax rate when I'm working from home.

A scenario though -- if an employer has a telecommuting employee in another state, do they need to pay employment taxes in that state? My company has satellite offices in other states, and legally it's a bit of a pain. Would a company have to file also as a NJ employer if their telecommuting employees were treated as working in NJ while telecommuting?

Re:No help for NJ residents (1)

Surt (22457) | more than 8 years ago | (#15389440)

Fairness wise, it ought to be the case that tax is due to the state in which the employee was physically located when the work was done, as presumably that is the state from which public resources were consumed. Of course, I'm doubtful that we'll ever reach such a situation, but this law might help.

Re:No help for NJ residents (1)

Red Flayer (890720) | more than 8 years ago | (#15389508)

In my case, some NY state resources would be consumed by me even if I telecommuted -- from what I understand I'm covered by NYS unemployment, not NJ, should I get shitcanned. Also, things like employment audits and other Buraeu of Labor stuff. I'm also covered by NY employment law, which is a little more restrictive to employers than NJ law (not that it matters one bit in practice).

Of course, NJ and my municipality make a metric buttload of cash off me from sales tax and real estate tax, respectively -- not to mention the taxes on my additional NJ income.

But in terms of fairness, there is public expenditure both by the state where the employee does the work, and the state where the employer is. Just not sure what the breakdowns would be.

Re: No help for NJ residents (1)

i am kman (972584) | more than 8 years ago | (#15389528)

1) Employees at the satellite offices don't pay NY taxes. Why don't you use these offices as your base and telecommute to these?

2) The business would probably have to establish a place of business in NJ (which probably couldn't be your house). Or, if your company really liked you, you could establish an LLC in NJ and consult. You'd save ALOT more than just state taxes that way.

Re: No help for NJ residents (1)

Red Flayer (890720) | more than 8 years ago | (#15389579)

As to 1), I can't. I regularly need to work from NYC, so an employment audit would fry my employer -- and they get audited regularly.

As to 2), LLC not gonna happen -- I've tried :)

And as to setting up a NJ Franchise, that's the legal PITA I was referring to. We already do it for CA, CT, and MA. CA is the worst, we pay CA Franchise Tax up the wazoo for only two employees -- let alone what they pay in income tax.

Re:No help for NJ residents (1)

truthsearch (249536) | more than 8 years ago | (#15389659)

I derive very little benefit from the NY taxes I pay

You work in NY. So you're using NY services when in NY. If you get hurt you'll probably go to a NY hospital by the fire department or city ambulance. You probably take public transportation to get to work, which is partly subsidized by the city. Or you drive on NY roads. You're protected by NY police. Taxes may be high, but you do get significant benefits from them.

state tax reciprocity (3, Informative)

hal9000(jr) (316943) | more than 8 years ago | (#15389373)

This often results in a double tax when the telecommuter's home state expects tax on the income the telecommuter earns at home.

I am pretty sure that Connecticut is the only state that doesn't have reciprocity for state taxes. IOW, in most states, you can deduct state taxes paid to another state so you don't get double whacked. This is useful for people who live on state borders. Of course, you accountant makes out better.check with your accountant.

The people who really get screwed are those that don't pay any state tax.

Re:state tax reciprocity (0)

Anonymous Coward | more than 8 years ago | (#15389522)

My accountant makes out better than whom?

Just move to New Jersey. (0, Flamebait)

Anonymous Coward | more than 8 years ago | (#15389374)

Or just move to India. The US goverment will tax the crap out of working Moms and Dads but refuses to tax international trade. Which is ironic because when America was a rising power, we actually taxed imports and exports and corporations. Now that we are a declining power, we only tax working folks and threaten to replace them with guest workers if they complain too much.

Its not exactly how it sounds... (1)

uarch (637449) | more than 8 years ago | (#15389389)

It requires those who sometimes work in the office of their New York employers to pay state taxes -- not only on the income they earn while physically in New York, but also on the income they earn at home. This often results in a double tax when the telecommuter's home state expects tax on the income the telecommuter earns at home."
That applies to a lot more than telecommuting and while its not fun it is definitely not as bad as it sounds. Despite the way this is worded the taxes you pay aren't additive.

A couple years ago I needed to file taxes in 3 states and the taxes came out effectively the same as if I paid a single state at the highest rate (which was NY).

When in New York... (1)

i am kman (972584) | more than 8 years ago | (#15389456)

Well, NY has long had the right to tax nonresident employees whose income comes from NY services. That's been an decades long debate for out-of-state commuters as well as the newer debate amongst telecommuters.

That's a penalty to an employer and employee who sets up shop in NYC - just deal with it. Or leave.

So, if the employer really liked you and wanted to support telecommuting, they'd just setup a satellite office in NJ or Connecticut and host a few servers there so that could be your main location. So blame your damned employer because they could easily fix the problem if they cared enough about you to actually do something. But, no, your bosses want that prestigious NYC address and don't want to help the little guy.

PS I recognize the problems with telecommuting or even commuting double taxation. But local/state tax laws are deeply mired in local politics and if business just started setting up shop (or just satellite offices) in places with more commuter/tele-commuter friendly locations, the problem solves itself.

Re:When in New York... (0)

Anonymous Coward | more than 8 years ago | (#15389566)

That's a penalty to an employer and employee who sets up shop in NYC - just deal with it. Or leave.

That's exactly what I did; I left.

Taxation without representation (1, Informative)

FlyerFanNC (112562) | more than 8 years ago | (#15389474)

If you live e.g. in New Jersey, how can New York expect you to pay taxes, since you don't vote for anyone in New York?

Several years ago, the city of Miami decided to raise taxes on parking so it could extort money from those workers who commuted from Broward county and otherwise were not paying for services in Miami-Dade. Someone sued the city for taxation without representation, since he lived in Broward and so could not participate in Miami-Dade elections. I believe the state supreme court agreed with him, and the city had to make other plans to get the revenue for the sports venue they were planning.

Re:Taxation without representation (1)

SydShamino (547793) | more than 8 years ago | (#15389626)

>>> Several years ago, the city of Miami decided to raise taxes on parking so it could extort money from those workers who commuted from Broward county and otherwise were not paying for services in Miami-Dade. Someone sued the city for taxation without representation, since he lived in Broward and so could not participate in Miami-Dade elections. I believe the state supreme court agreed with him, and the city had to make other plans to get the revenue for the sports venue they were planning.

If that happened, that sounds pretty stupid. When I go on vacation to Miami, should I be allowed to refuse sales taxes on the souvenir crap I buy, because I didn't live there to vote on the tax rate?

Perhaps you meant that they were trying to add a surcharge on private parking facilities? I don't see that as illegal, either; surcharges are often allowed on specific services. Maybe Florida's laws are more restrictive.

Re:Taxation without representation (1)

ScentCone (795499) | more than 8 years ago | (#15389683)

If you live e.g. in New Jersey, how can New York expect you to pay taxes, since you don't vote for anyone in New York?

I'm guessing the reasoning goes like this: you have the choice to do your business in another state if you don't like what happens when you go out of your current state of residence and earn money in that otherstate (NY). For example, you could telecommute and occasionally make a trip to Delaware, and have none of that tax liability. Or Nevada. But you're choosing to make money in NY, and this is the price the people of NY want to charge you for playing host to the place where you're making your cash.

Their attitude costs NY (0)

Anonymous Coward | more than 8 years ago | (#15389488)

I turned down a contract offer because of NY's tax stance. That and the unwillingness of the company offering the contract to adjust their pay rate to compensate me for the fact I was going to get nailed 3 times (NY state taxes, my state taxes, and Fed taxes).

The end result: NY got nothing.

hmm (0)

Anonymous Coward | more than 8 years ago | (#15389538)

I am sure I stand alone in this, but isn't his just another stupid way of making exceptions in some cases, and thus making taxes MORE complicated?
Instead of looking out for numero uno all the time shouldn't we be looking into lowering taxes all around? stop the $$ from bleeding out of gov't in general?
Is a flat tax the answer? I don't know.
But at some point shouldn't we all be thinking "boy this is really braindead" and find ways to fix the real problems?
Now is a good time, call for reps to halt the obvious 'pork' and other stupid expenditures. In times of doubt, republicans throw money out to whomever is complaining. Democrats find reasons to even if there are none. Why can't we stop pissing away our tax money and use it for things that work. The Katrina cleanup? disaster in all ways, we dumped more money into that region and look where it is now. From that perspective it has nothing to do with this specific gov, it has to do with the way we disseminate the cash.

case in point, fence on the border, $3mil a mile. WOW

Fairness? (2, Interesting)

d_54321 (446966) | more than 8 years ago | (#15389542)

If passed, the Telecommuter Tax Fairness Act would prevent states from taxing income earned by nonresidents who telecommute to an in-state employer while working from home.
Why not just go all the way [fairtax.org] and not tax income?

Re:Fairness? (0)

Anonymous Coward | more than 8 years ago | (#15389654)

Why not just go all the way and not tax income?

In our fucking dreams.

No fucking lie - I was talking to some folks, and I asked one who used to be an IRS employee. She actually said, and it sickens me, that the Fair Tax was too easily abused. She then used an example of how the current tax system can be abused as a reason for H.R. 25 to be shot down!

Additionally and unfortunately, because sales taxes are by economists' definition regressive, many folks dismiss HR 25 out of hand!

It's this , I don't know, stupidity or unwillingness to actually LOOK at the facts that is going to kill the Fair Tax. It just sickens me!

It would hellp this economy so much! It would bring companies that moved off-shore for tax breaks back to the US!

Whatever happened to no taxation (1)

kunakida (886654) | more than 8 years ago | (#15389551)

without representation?

As a telecommuter, you're not consuming any services from the other state.

If they get really sticky about it, just describe your home as a branch office (in which you are based) with all your office space and equipment being leased by you to the company in question.

Re:Whatever happened to no taxation (1)

Stormy Dragon (800799) | more than 8 years ago | (#15389580)

The doctrine that representation is tied to taxation has been defunct for decades, in favor of the more 'progressive' one man, one vote standard.

Re:Whatever happened to no taxation (1)

bano (410) | more than 8 years ago | (#15389651)

You control the representation(or lack of) by choosing not to work where you live.
If you lived some place and did not get representation that would be different.

The way to fix this is simple... (2, Interesting)

zappepcs (820751) | more than 8 years ago | (#15389568)

well, more or less, try http://www.fairtax.org/ [fairtax.org] for a different method of taxation that would not care what state you earned the money in or from.

Re:The way to fix this is simple... (1)

Jon Luckey (7563) | more than 8 years ago | (#15389668)

try http://www.fairtax.org/ [fairtax.org] for a different method of taxation that would not care what state you earned the money in or from

Amazing. A national federal sales tax is supposed to eliminate State (i.e. non-federal) income taxes? The issue in TFA is double taxation by two different States, not the Federal government taxing someone twice.

LMAO (1)

pkcs11 (529230) | more than 8 years ago | (#15389629)

Of maybe the 150 or so people I know in the tech business, "telecommuting" is a euphamism for taking the day off.

The problem isn't taxation (0, Troll)

Ulrich Hobelmann (861309) | more than 8 years ago | (#15389632)

The problem is government spending out of control.

I don't know exactly how much typical state expenditures rose, but if we could reduce the federal budget to what it was only ten years ago, we could simply cut lots of taxes altogether.

There's a better way. (3, Insightful)

jcr (53032) | more than 8 years ago | (#15389636)

Once again, this is one of many obnoxious pitfalls of income taxes. Support the Fair Tax [fairtax.org] , both at the federal and state levels.

-jcr
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