New Jersey is joining a legal battle to stop neighboring states from taxing residents who are working from home.
The shift to remote work amid COVID-19 led New Hampshire to file a lawsuit in October, seeking to bar Massachusetts from taxing people who stopped commuting to the state for work because of the outbreak. More than a dozen other states have since filed amicus curiae, or friend-of-the-court, briefs urging the U.S. Supreme Court to take up New Hampshire’s challenge. New Jersey, along with Connecticut, Hawaii and Iowa, filed their own on Dec. 22.
At stake for New Jersey is as much as $1.2 billion credited to its residents for income taxes paid to New York. Before the pandemic, more than 400,000 residents of New Jersey commuted to jobs in New York City. With many of these people now working remotely, their taxes are “more fairly attributed to New Jersey,†state Treasurer Elizabeth Maher Muoio said in a statement.
“The resolution of this case thus has far-reaching implications as to which states will collect billions in revenue during the pandemic,†New Jersey wrote in its brief.
Seven states currently tax people where their office is, even if they work remotely. While six of the states have permanent policies on nonresident income taxes, Massachusetts’s rule came as a result of the pandemic. “By taxing income earned entirely outside of its borders, Massachusetts subjects Granite Staters to simple but unconstitutional confiscation,†New Hampshire wrote in its complaint.https://www.newsmax.com/finance/streettalk/nj-new-york-tax-residents/2020/12/23/id/1002899/Seems if one is taxed when one does not set foot in the state, it is confiscation.
New York is getting desperate.
