The Future Of Remote Worker Taxation Could Be On The Line In US Supreme Court: Report
Large metropolitan areas could face significant lost revenue if the US Supreme Court upholds an offer to restrict how states can tax workers who no longer commute.
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The Wall Street Journal reports that more than a dozen states have submitted information on a petition New Hampshire has submitted to the US Supreme Court. In this petition, the granite state called for Massachusetts to stop taxing its citizens who once commuted to Massachusetts but are now working remotely because of the pandemic.
The case is not scheduled for a private conference among Supreme Court justices to determine whether a hearing is acceptable.
With a possible outcome in mind, any decision against Massachusetts would have a significant impact on major metropolitan areas such as New York, California, and other states where interstate tax cuts could mean significant budget constraints.
New Jersey, Connecticut, Iowa, and Hawaii filed a brief Tuesday asking the court to accept the New Hampshire petition. Ohio, Texas and eight other states were previously filed on behalf of New Hampshire.
Federal courts previously ruled that non-residents should be taxed as long as there is a material link with the tax jurisdiction, taxes related to services are levied in the tax jurisdiction and are fairly shared.
Massachusetts typically divides its taxes based on the number of days commuters work in the state. But the pandemic has rendered that formula unusable.
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