Telecommuter Must Pay NY Income Tax

[David Farber <dave () farber net>]

------ Forwarded Message
From: Randall <rvh40 () insightbb com>
Date: Wed, 30 Mar 2005 15:15:16 -0500
To: cyberia <CYBERIA-L () LISTSERV AOL COM>
Cc: Dave <dave () farber net>
Subject: Telecommuter Must Pay NY Income Tax

[Note: The Court of Appeals /used to be/ New York's High Court. Surely
someone here will inform me otherwise if that is no longer the case]

http://tennessean.com/business/archives/05/03/67569995.shtml?Element_ID=6756
9995

Telecommuter must pay N.Y. income tax

By KEITH RUSSELL
Staff Writer


A Nashville resident has lost a tax battle with the state of New York
that some believe could have wider implications for the growing number
of people who work by telecommuting from a home office.

The New York Court of Appeals ruled yesterday that computer programmer
Thomas Huckaby owes New York income tax for the entire salary he earned
from a New York-based union.

During the two years in question, Huckaby did about 75% of his work out
of his home office in Nashville. He would travel to New York to work at
the National Organization of Industrial Trade Unions' offices about one
fourth of the time. He paid New York state income tax on just 25% of his
earnings.

The Court of Appeals decision relied on a New York law that says a
worker's income is taxable if he or she chooses to live outside the
state, as opposed to if they were transferred to another locale.

''New York has the right to tax 100% of a nonresident employee's income
derived from New York sources,'' the court's 4-3 decision said. New York
state officials lauded the decision.

''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 New York Assistant Solicitor
General Julie Mereson.

Huckaby's attorney, Peter Faber, said the law was intended to keep
commuters in nearby states, such as New Jersey, from avoiding New York
income tax. ''Tom's case was different,'' Faber argued. He said a
decision hasn't been made on whether to appeal the case to the U.S.
Supreme Court. Messages left at Huckaby's Nashville home were not
returned yesterday.

Faber said the case is being watched closely by advocates of
telecommuting. They fear that other states might follow New York's lead.
Tennessee does not tax individual workers' salaries regardless of where
they live.

''I've had calls from all over the country,'' Faber said. ''The
implications are if a state wants to go after telecommuters and nail
them for everything, they can.''

According to the International Telework Association and Council, 12.4
million people telecommuted daily in 2004, up from 8.8 million such
workers in 2003.

''The fact of the matter is, in this day and age with the way people and
especially knowledge workers are able to do business, it's important for
an employer to allow an employee to live in the best location for them
to do the work,'' said ITAC's Robert Smith. ''What concerns me about the
(Huckaby) ruling is it potentially limits that flexibility.''

Information from the Associated Press was used in this story.


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