Multistate Workers and Their State Tax Liabilities

The lack of uniformity of state laws applicable to employer withholding and their employees who work in multiple states has created a cumbersome compliance burden, not only for employers, but also for employees. This paper discusses the state tax ramifications associated with an employer having empl...

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Bibliographic Details
Published in:The ATA journal of legal tax research 2012-07, Vol.10 (1), p.62-81
Main Author: Wright, Kathleen K.
Format: Article
Language:English
Subjects:
Compliance
Employees
Employers
Income tax returns
Income taxes
Multistate taxation
Nonresidents
Payroll departments
Personal income
Reciprocity
Reporting requirements
State court decisions
State taxes
Taxation
Telecommuting
Travel
Withholding taxes
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Description
Summary:The lack of uniformity of state laws applicable to employer withholding and their employees who work in multiple states has created a cumbersome compliance burden, not only for employers, but also for employees. This paper discusses the state tax ramifications associated with an employer having employees who work from a different state, and employers who have employees who perform services in multiple states. The paper also looks at proposed remedies for the mobile workforce issue, including proposed federal legislation and the Multistate Tax Commission's proposal addressing the issue. The paper considers whether Congress has authority under the Commerce Clause to regulate this issue. The paper concludes with alternative recommendations to consider as a workable solution.
ISSN:1543-866X
1543-866X
DOI:10.2308/jltr-50209