Telework Coalition Denounces New York’s Revised Telework Tax Policy
Group says federal legislation protecting telecommuters is needed now more than ever.
Washington, DC (PRWEB) June 19, 2006 -–
The Telework Coalition (TelCoa), a telework advocacy group headquartered in Washington, DC, has denounced revisions New York State recently made to its telework tax policy as “misleading” and “useless.” The group renews its call to Congress to protect Americans who telecommute to out-of-state employers by passing The Telecommuter Tax Fairness Act (S. 1097, H. R. 2558).
Another telework advocacy group that previously endorsed the federal legislation - The Association for Commuter Transportation (ACT) - is also reaffirming its support for the bill.
Under a longstanding New York tax rule, nonresidents who telecommute some or most of the time for their New York employers may be forced to pay New York taxes, not only on the income they earn when they work in New York, but also on the income they earn when they work at home, in a different state. Because telecommuters’ home states may also tax the income earned at home, these employees may be double taxed on that income.
A telecommuter might be able to avoid the double tax threat if he can prove that his telework arrangement is an employer “necessity.” However, under New York’s old telework tax policy, proving necessity was virtually impossible: A telecommuter would have to show that the nature of his work was such that it could not possibly be performed at the employer’s New York site. Because most work that telecommuters do at home can also be done in a New York office, the vast majority of telecommuters could not meet this test.
To solve the double tax problem arising from New York’s rule, U. S. Senator Chris Dodd (D-CT) and U. S. House Representative Christopher Shays (R-CT) introduced The Telecommuter Tax Fairness Act. This legislation would prohibit states from taxing nonresidents on the income they earn while working at home.
On May 15, 2006, New York announced that it had revised its telework tax policy. However, while the wording of the revised policy is new, the policy itself is essentially the same: Nonresidents who want to avoid the double tax risk will still effectively have to prove that telework is an employer necessity, and, for most telecommuters, proving necessity will be just as difficult as it was under the old policy. For example, now, a telecommuter might have to show that his employer pays him rent for the use of his home office, that he never does any personal work in his home office, or that his employer’s advertising material shows his home office as one of the company’s places of business. These are conditions very few telecommuters will be able to meet.
“New York’s attempt to create the appearance that it has become more lenient when, in fact, most nonresidents will still be penalized for telecommuting across state lines only heightens the need for The Telecommuter Tax Fairness Act,” said Nicole Belson Goluboff, a lawyer and TelCoa Advisory Board member.
“With telework playing such an important role in the nation’s pandemic planning – and with gas prices as high as they are – it is outrageous for New York to continue punishing people who telecommute,” said Chuck Wilsker, TelCoa’s President and CEO. “Since New York won’t get rid of the tax on interstate telework, Congress has to do it.”
The Telework Coalition
Chuck Wilsker, President and CEO (202-266-0046, ext. 101)
Based in Washington, D. C., The Telework Coalition (www. TelCoa. org) is a not-for-profit 501(c)(6) that brings together a diverse array of organizations and individuals with the common interest of promoting awareness and adoption of existing and emerging telework and telecommuting applications. The coalition’s mission is summed up in its tag line, “Enabling virtual, mobile and distributed work through education, technology and legislation.”
The Association for Commuter Transportation (ACT)
Kevin Shannon, Executive Director (678-916-4944)
ACT (www. actweb. org) is the country’s leading membership association of more than 800 employers, non-profits, public agencies and others who offer alternative commute and transportation programs and services to help enhance mobility, conserve energy and reduce pollution.
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