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.
I would expect cities used to justify income taxes their non-resident commuters by saying that those people used city services and should pay their share for them, as though public goods were private services. The population accepted that.
Now, though, New York tips its hand. It’s not about commuters paying for their share of services that they use; it’s about New York getting what it thinks is its fair share of your income.
I truly look forward to the day that some innovative, unelected regulator determines that my telecommuting is taxable in his jurisdiction because my Internet communication hops through a server in his city or state.