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Wednesday, March 30, 2005

Law - NY's top court rules telecommuter must pay taxes

An AP story today reports:

ALBANY, N.Y. -- A telecommuter who lives out of state while working by computer for a New York employer must pay New York tax on his full income, the state's highest court ruled Tuesday in a case that could have wide implications in the growing practice.

The Court of Appeals said that computer programmer Thomas Huckaby who lives in Nashville, Tenn., owed New York income tax for his full salary, not just the time he spent working at his employer's New York offices.

Huckaby paid tax on about 25 percent of his income over two years for the time he spent working in New York state. But the court upheld a state tax department ruling that all his income should be taxed. That amounts to $4,387 plus interest. However, the ruling could lead to much greater income for the state as it is applied to the growing field of telecommuting. * * *

"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 state Assistant Solicitor General Julie Mereson, who won the case.

The case is Huckaby v. NY State Div. of Tax Appeals (3/29/05). Access it here.

Slashdot.com readers have some interesting comments on this ruling. This story in Computerworld notes that Huckaby's home state, Tennessee, doesn't have an income tax. I wonder if the ruling would be different if it did? And I wonder if this ruling might be expanded to county taxes in some circumstances?

Posted by Marcia Oddi on March 30, 2005 05:00 PM
Posted to General Law Related