State Appellate Court Imposes Tax on Out-of-State Telecommuter

In a case which may have wide implications for US telecommuters, the New York Court of Appeals, in a 4-3 split decision, has ordered an out-of-State man to pay tax to New York on 100% of his income, although he spent no more than 25% of his working time in New York State. In Matter of Huckaby (no citation yet available), the Court rejected challenges to the so-called "convenience of the employer" test that traditionally has enabled New York to tax out-of-State residents who work for New York-based employers. Under this test, if the employee works outside New York because of the employer's needs, the taxes may be apportioned on the basis of the number of days spent in New York. But if the employee is carrying out this arrangement for the employee's convenience, then there can be no apportionment. In arriving at this decision, the majority relied on earlier cases which involved "conventional", daily commuting across State boundaries. In the Huckaby case, however, the telecommuter was stationed 900 miles and a two-hour plane trip away from his employer's office. For new reports on the Huckaby case, visit: www.law.com/jsp/article.jsp?id=1112090712447; and http://makeashorterlink.com/?H3E221FDA Summary by: The Editor