Support for “The Telecommuter Tax Fairness Act” Is Growing

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Telework experts nationwide are calling for the elimination of unfair, double taxation of interstate telecommuters.

Experts on telecommuting (sometimes called “telework”) across the country are hard at work to secure passage of “The Telecommuter Tax Fairness Act” - federal legislation that would abolish a state penalty tax on telecommuters who live in one state and work for employers located in other states. The organizations endorsing the bill now include the Telework Coalition, the ITAC (The Telework Advisory Group for WorldatWork), the Telework Exchange and the Association for Commuter Transportation.

The Telecommuter Tax Fairness Act (S. 1097, H.R. 2558) is a bi-partisan measure introduced by Senator Chris Dodd (D-CT) and Representative Christopher Shays (R-CT). The bill would eliminate a state income tax rule known as the “convenience of the employer” rule, which is on the books in a number of states and has been applied aggressively by New York.

Under New York’s convenience rule, for example, nonresidents who telecommute some or most of the time to their New York employers may be forced to pay New York taxes on 100 percent of their income, even though they earn part of that income at home, outside New York. Because the home state may also tax the income earned at home, the telecommuter may be double taxed on that income. Even if the home state grants a credit for taxes paid to New York on the non-New York income, the telecommuter may suffer. If New York’s tax rate is higher than the home state’s, the telecommuter may have to pay the higher rate. In addition, the telecommuter’s tax dollars go to support the schools and other public services in New York, rather than those in the state where he or she lives.

The Telecommuter Tax Fairness Act would prohibit states from taxing nonresidents on the income they earn at home.    

The nationwide push for legislation has arisen because of the U.S. Supreme Court’s October 31 decision not to hear the case of Huckaby v. New York State Division of Tax Appeals. The case concerned a Tennessee telecommuter who was taxed by New York on 100 percent of his income, even though he earned only 25 percent of it in New York. Less than two years earlier, the Supreme Court turned away a similar case brought by a Connecticut telecommuter.    

“New York has been demanding revenue from telecommuters all over the country, and the Supreme Court refuses to impose order,” says Nicole Belson Goluboff, a lawyer who writes extensively on telework issues. “The Court’s inertia demands that Congress provide relief.”    

“This is no time to discourage people from telecommuting,” says Chuck Wilsker, President and CEO of The Telework Coalition, a telecommuting advocacy group based in Washington, D.C. “We need telecommuting to sustain government and business operations during emergencies, to reduce our dependence on foreign oil, to reduce traffic and air pollution, to strengthen the economies of our rural communities and to minimize the exportation of U.S. jobs offshore. We need telecommuting to enable older Americans to continue working and to help employees balance the demands of work and family. The Telecommuter Tax Fairness Act is a crucial tool for achieving these ends.”

“We are committed to shepherding this bill into law,” explains Elham Shirazi of the Association for Commuter Transportation. “Our goal is to stop New York and other states from penalizing interstate telecommuters and to prevent additional states from following this approach. We want to make sure that no state can punish the citizens of other states for telecommuting across state lines.”

Organizations Supporting “The Telecommuter Tax Fairness Act”:

The Association for Commuter Transportation (ACT)

Kevin Shannon, Executive Director (678-916-4944)

ACT (http://www.actweb.org) is the country’s leading membership association of more than 800 employers, non-profits, public agencies and others who offer alternative commute and transportation programs and services to help enhance mobility, conserve energy and reduce pollution.

The ITAC

Gil Gordon, Member of the ITAC Telework Advisory Board (732-329-2266)

ITAC (http://www.workingfromanywhere.org) is a not-for-profit organization founded in 1993 dedicated to advancing the growth and success of work independent of location. Its members include Fortune 500 firms and federal government agencies. On January 1, 2005, WorldatWork acquired all of the assets of ITAC and ITAC is now identified as ITAC, the Telework Advisory Group for WorldatWork.

The Telework Coalition

Chuck Wilsker, President and CEO (202-266-0046, ext. 101)

Based in Washington, D.C., The Telework Coalition (http://www.TelCoa.org) is a not-for-profit 501 (c) (6) that brings together a diverse array of organizations and individuals with the common interest of promoting awareness and adoption of existing and emerging telework and telecommuting applications. The coalition’s mission is summed up in its tag line, “Enabling virtual, mobile and distributed work through education, technology and legislation.”

The Telework Exchange

Steve O’Keeffe, Executive Director (703-883-9000 ext. 101)

The Telework Exchange (http://www.teleworkexchange.com) is an online community focused on demonstrating the tangible value of telework and serving the emerging educational and communication requirements of the Federal teleworker community. The organization facilitates communication among Federal teleworkers, telework managers, and IT professionals.

Contact:

Nicole Belson Goluboff, Esq.

Advisory Board Member of The Telework Coalition    

914-725-8099

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