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Monday, July 31, 2023
Holderness: Particular person Residence-Work Assignments For State Taxes
Hayes R. Holderness (Richmond), Particular person Residence-Work Assignments for State Taxes, 98 Wash. L. Rev. 53 (2023) (reviewed by Blaine Saito (Northeastern; Google Scholar) right here):
The surge in work-from-home preparations introduced on by the COVID-19 pandemic threatens severe disruptions to state tax methods. Billions of {dollars} are at stake at this pivotal second as states grapple with the place to assign earnings earned by means of these distant work preparations for tax functions: the employee’s residence or the employer’s location?
Some states—intent on modernizing their earnings tax legal guidelines—have assigned such earnings to the employer’s location, however have confronted persistent challenges on each constitutional and coverage grounds in response.
This Article supplies a vigorous protection in opposition to such challenges. The Supreme Court docket has lengthy interpreted the Structure to be deferential to state tax actions; new legal guidelines for the age of distant work absolutely fulfill constitutional calls for. Furthermore, assigning earnings from distant work to the employer’s location is extra equitable than assigning the earnings to the employee’s residence, justifying modernization efforts from a coverage perspective. The answer to this homework task downside is clear: the states should revise their tax legal guidelines to face the evolving nature of labor.
https://taxprof.typepad.com/taxprof_blog/2023/07/holderness-individual-home-work-assignments-for-state-taxes.html
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