Wednesday, February 23, 2022
Holderness Presents Taxing Distant Revenue Below A Forgiving Structure In the present day At Northeastern
Hayes R. Holderness (Richmond) presents Taxing Distant Revenue underneath a Forgiving Structure at Northeastern right now as a part of its College Colloquia Collection hosted by Claudia Haupt:
The surge in distant work preparations introduced on by the Covid-19 pandemic threatens critical disruptions to state tax methods. Billions of {dollars} in tax collections are at stake as conventional tax guidelines for sourcing earnings among the many states based mostly on the bodily location of the employee end in giant quantities of earnings shifting from states of employers to states of employees’ residences. Confronted with these new distant working situations, some states have revised their tax guidelines by trying to the placement of the employer to supply a employee’s earnings, drawing the ire of different states because the multistate tax steadiness turns into disrupted. One state, New Hampshire, even sued a state that had modified its guidelines, Massachusetts, within the Supreme Court docket, alleging that Massachusetts had dedicated grave constitutional violations and infringed on New Hampshire’s sovereignty.
This Article gives a sturdy protection of states like Massachusetts that search to vary their tax guidelines for sourcing particular person earnings to adapt for the approaching age of distant work.
The Supreme Court docket has lengthy interpreted the Structure to be forgiving in direction of state tax actions; new sourcing guidelines are unlikely to fail to fulfill constitutional calls for. Furthermore, in a world of distant work, the coverage justifications for sourcing earnings to the placement of the employer, notably relating to the equitable therapy of multistate employees and the prevention of tax avoidance, are stronger than these for sourcing earnings to the placement of the employee. As distant work rises, these new earnings sourcing guidelines ought to as properly.
https://taxprof.typepad.com/taxprof_blog/2022/02/holderness-presents-taxing-remote-income-under-a-forgiving-constitution-today-at-northeastern-1.html
