Angry New Yorker

Semi-Daily Rants from New York City's Angry Man

"As I know more of mankind I expect less of them, and am ready now to call a man a good man, upon easier terms than I was formerly." - Dr. Samuel Johnson, Boswell, Life of Johnson, Sept. 1783

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Monday, January 17, 2005
 
NYS Tries to Tax Everything, Everywhere, Everyday... ;-)

Well, not quite, but does anyone doubt that there is any money, anywhere that NYS and NYC wouldn't try to tax if it could? New York's spend-crazed governor and legislature realize they're rapidly running out of people & companies to squeeze as well as no new revenue streams and gimmicks, so now they'd like to tax the entire income of anyone who works in NYS for any amount of time, regardless of where they actually live. Think we're kidding? We're NOT. Submitted for your disgust:

TELECOMMUTER TAX CASE IS CLOSELY WATCHED

N.Y. Argues It Can Tax All of an Out-of-State Worker?s Income
BY MOLLY McDONOUGH

The outcome in a case being considered by New York?s highest court will affect the tax bills of telecommuters who work for companies in that state, and it could have a ripple effect reaching into other states.

Tennessee resident Thomas L. Huckaby mounted his challenge after New York began taxing him on 100 percent of his income, even though he spends just 25 percent of his time working at his employer?s office in the Empire State.

In oral arguments last week, Huckaby?s lawyer asked the New York Court of Appeals to ditch its "convenience-of-the-employer" test. New York?s test demands that out-of-state workers for New York employers allocate income between their home state and New York only for work that the employer requires be done outside of New York.

Huckaby appealed after the appellate division of the New York Supreme Court upheld the state?s tax rule. Huckaby v. New York State Division of Tax Appeals, 776 N.Y.S.2d 125 (2004) [available here - http://decisions.courts.state.ny.us/ad3/Decisions/2004/92539.pdf].

Huckaby?s case potentially impacts anyone who spends time, even a minimal amount, working for an employer based in New York. At stake is upwards of $100 million in tax revenue for the state.

Most states apply a "physical presence" rule in which income tax is allocated based on where the income was earned. While New York is one of only a few states that use the convenience-of-the-employer test, the case, coupled with the state high court?s decision in an earlier case on similar issues, could set standards elsewhere as cash-starved states look for ways to increase revenue.
* * *
The New York Court of Appeals upheld the convenience-of-the-employer test in Zelinsky v. Tax Appeals Tribunal, 769 N.Y.S.2d 464 (2003), available at http://www.nycourts.gov/ctapps/decisions/nov03/129opn03.pdf, saying the test was developed in part to keep commuters from trying to avoid paying New York?s income tax when they purport to do a fraction of their work from home. In April, the U.S. Supreme Court denied cert in Zelinsky.

Amazing isn't it? Read the entire article http://www.abanet.org/journal/ereport/j14telecom.html. As always, NY's answer is never "let's figure out how to cut spending", but rather, "let figure out how and who else we can shakedown and squeeze." It'd almost be funny if it wasn't so truly pathetic and maddening.

Fellow New Yorkers! Let's rise up! All we have to lose is our current governor and legislature. (and that's not saying much).

posted by anonymous at 8:41 PM

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