Telecommuting on State Tax Nexus

A single telecommuter working from home within a state’s borders may trigger income tax nexus for out-of-state employers.  This is true even if the out-of-state employer made no sales in the state and even if the employee telecommuted only part time.  Last year’s Bloomberg BNA 2012 Survey of State Tax Departments revealed a marked trend toward this result, with 35 states agreeing that nexus would be established under these circumstances.  Perhaps not coincidentally, recent headlines have shown a trend toward employers cutting back on telecommuting or in some cases banning it outright. While state tax implications have not been directly cited as a reason for so doing, they could certainly be a consideration and arguably should be.  To read more about the telecommuting impact on state tax nexus, please click here.



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Gary Bingel's expertise focuses on state and local income taxation, and sales and use tax consulting. He has significant experience serving clients in the manufacturing, retail, pharmaceutical, biotechnology, technology and service industries.

Paul Bleeg is a Tax Partner responsible for overseeing tax compliance and planning in the firm’s Personal Wealth Advisors Group, as well as authoring tax research memorandums on various individual, partnership, corporate and non-profit issues.