SCOTUS scuttles state plans to challenge permanent tax jurisdictions
The Supreme Court decided to throw out New Hampshire’s challenge of Massachusetts’ so-called “permanent tax jurisdiction” that allows Massachusetts to tax workers that have moved and begun telecommuting out of state. Five states have these laws including and most notably New York. Had the court decided to take the case, billions of tax revenues could have been at stake for surrounding states. New Jersey is well known for having to credit its taxpayers that work in New York for large sums of tax revenue, and a different ruling could have allowed New Jersey to claw back an estimated $1.2 billion in revenue. As telecommuting becomes more commonplace, we could see more challenges to these laws; but for now, states with large commuter bases can hang onto their tax revenues, even from telecommuters.