N.J. Challenges New York Tax on Residents Working Remotely

Discussion in 'Higher Learning' started by bnew, Dec 23, 2020.

  1. bnew

    bnew Superstar

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    Stacie Sherman
    Wed, December 23, 2020, 11:42 AM EST·2 min read
    [​IMG]

    (Bloomberg) -- New Jersey is joining a legal battle to stop neighboring states from taxing residents who are working from home.

    The shift to remote work amid Covid-19 led New Hampshire to file a lawsuit in October, seeking to bar Massachusetts from taxing people who stopped commuting to the state for work because of the outbreak. More than a dozen other states have since filed amicus curiae, or friend-of-the-court, briefs urging the U.S. Supreme Court to take up New Hampshire’s challenge. New Jersey, along with Connecticut, Hawaii and Iowa, filed their own on Dec. 22.

    At stake for New Jersey is as much as $1.2 billion credited to its residents for income taxes paid to New York. Before the pandemic, more than 400,000 residents of New Jersey commuted to jobs in New York City. With many of these people now working remotely, their taxes are “more fairly attributed to New Jersey,” state Treasurer Elizabeth Maher Muoio said in a statement.

    “The resolution of this case thus has far-reaching implications as to which states will collect billions in revenue during the pandemic,” New Jersey wrote in its brief.

    Seven states currently tax people where their office is, even if they work remotely. While six of the states have permanent policies on nonresident income taxes, Massachusetts’s rule came as a result of the pandemic. “By taxing income earned entirely outside of its borders, Massachusetts subjects Granite Staters to simple but unconstitutional confiscation,” New Hampshire wrote in its complaint.

    According to New York’s taxation website, any nonresident whose primary office is in the state but is telecommuting is still considered to be working in the state. Many states, including New Jersey, provide a tax credit to eliminate “double taxation” of a person’s income.

    The issue has become more pressing since the outbreak began, with many offices closed and employees working from home, and many states facing budget deficits.

    Such taxes “contain no mechanism to prevent double taxation if the taxpayer’s home state does not allow a credit,” New Jersey wrote in its brief. It “results not only in an unconstitutional windfall, but diverts the revenues that home states would otherwise receive.”

    The case is New Hampshire v. Massachusetts, 22O154.
     
  2. bnew

    bnew Superstar

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    New jersey buggin.

    https://www.state.nj.us/treasury/taxation/pdf/pubs/sales/anj27.pdf

    snippet:
    not exactly the same thing but their position is sort of a contradiction.
     
  3. 88m3

    88m3 Fast Money & Foreign Objects

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    they must really be hurting


    anyways stuff like this is well beyond settled idk what they're hoping to achieve
     
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  4. dora_da_destroyer

    dora_da_destroyer puffin' fresh dro, boy

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    Ehh, doesn’t really matter. If tax is going to be charged, makes sense to charge it based on billing address given you may not have enabled tracking to let it allow you to be charged local sales tax



    but to the bigger issue of who gets the tax when employees WFH...I’ve always thought it was messy to tax people based on where they work vs where they live. Seems like there should be an easier way to share that revenue. Jersey shouldn’t miss out on all of it, yet I get the point of you use the services of the city you work in so some income tax should go there.


    ahh well, I don’t have those problems.
     
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  5. A.R.$

    A.R.$ Superstar Supporter

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    Don’t know how this case would go, but IMO it makes sense to tax on were the employees work. I say this because each state have different workplace laws and regulations. Employees are still working based on those laws and regulations even if they are working remotely in another state. But I’m not that invested in this one way or the other:manny:
     
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  6. Atlrocafella

    Atlrocafella Veteran Supporter

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    This is an interesting case, definitely looking forward to how the court rules on this :ohhh:
     
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  7. 88m3

    88m3 Fast Money & Foreign Objects

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    employers aren't going to be forced to figure out their obligations/withholdings based on where you are
     
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  8. Serious

    Serious Veteran Supporter

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    :what: The state should be saving money from people staying home.

    Plus its not like I'm still supporting the local economy.

    I'm getting robbed from DD's delivery fees.
     
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  9. CreepyMcCreeperson

    CreepyMcCreeperson Veteran

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    This is applicable to me.

    :jbhmm:
     
  10. Wargames

    Wargames One Of The Last Real Ones To Do It

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    NJ should lose this but you never know:yeshrug:
     
  11. Russ

    Russ Veteran Supporter

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    Taxes for income made in that state.

    I anticipate the court will rule that the employees made the income in the home they resided

    However

    Let's say it is "normal" and people usually commute over state lines

    If they worked 5 days from home in that situation..I highly doubt that they then list 5 days worth of income in a different spot on their tax form for income earned in a different state. I'm sure they've been lumping it all together
     
  12. Uncle Phil 36

    Uncle Phil 36 All Star

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    how would they be saving money? Those people aren’t using public transportation, paying tolls, etc
     
  13. BigMoneyGrip

    BigMoneyGrip I'm Lamont's pops Supporter

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    You work in NY and live in NJ come up off them taxes.. that remote shyt means nothing. :ufdup:
     
  14. Russ

    Russ Veteran Supporter

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  15. DEAD7

    DEAD7 Veteran Hall of Fame Supporter

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    :ehh:Facts
    Or using the infrastructure.
     

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