Cross Border Taxation Heating Up!

[ATSMAN]

New Hampshire asked the U.S. Supreme Court yesterday to strike down a regulation that requires roughly 80,000 of its residents who are employed by Massachusetts companies to pay income taxes in the neighboring state while they work from home during the coronavirus pandemic.

“Massachusetts cannot balance its budget on the backs of our citizens, punish our workers for making the decision to work from home and keep themselves and their families and those around them safe,” New Hampshire Gov. Chris Sununu said at a news conference. “New Hampshire has no choice but to seek relief in our nation’s highest court. We’re going to fight this unconstitutional attempt to tax our citizens every step of the way and we are going to win.”

[Kram BergGold]

I live in MA. My guess is NH will win this case.

[RWG1950]

If NH & MA do not have a reciprocity agreement, does a NH resident return offer a credit for income tax paid to MA ?

[Lion]

And, then there's CT residents/NY commuters. And, Ma commuters and RI commuters and even NJ commuters...

[Rapid Robert]

If NH & MA do not have a reciprocity agreement, does a NH resident return offer a credit for income tax paid to MA ?

According to TheTaxBook, "A 5% tax is assessed on interest and dividend income. New Hampshire does not have an income tax on an individual’s reported W-2 wages."

We already have a concept of "temporary absence" throughout the tax code where such absences are often ignored for tax purposes. Why would this be any different?

"Under a temporary rule enacted by the Massachusetts Department of Revenue, residents of other states who were working in Massachusetts before the pandemic remain subject to Massachusetts’ 5.05% income tax while they work from home.

While the regulation will expire Dec. 31 or 90 days after the coronavirus state of emergency in Massachusetts is lifted, New Hampshire officials argue it represents a permanent shift in underlying policy and amounts to an “aggressive attempt to impose Massachusetts income tax” beyond its borders."

Maybe the Governor (whose predecessor and father had to resign as White House Chief of Staff after ripping off taxpayers for hundreds of thousands of dollars in personal expenses) should focus on having an economy where residents can earn a living in their own state, instead of biting the hand that feeds them.

"I live in MA. My guess is NH will win this case." Yes, perhaps now that all SCOTUS cases will be decided on a partisan basis.

[ATSMAN]

I live in MA. My guess is NH will win this case.

Because of the history of MA taxing non-residents who derive MA sourced income, NH has an uphill battle. This will probably be taken up by the SCOTUS next year! I don't see any action this year.