Support The Telecommuter Tax Fairness Act
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To: U.S. House of Representatives and U.S. Senate
We urge you to support The Telecommuter Tax Fairness Act. This legislation would eliminate a state tax rule that unfairly punishes both Americans who telecommute across state lines to their employers and businesses that need to hire interstate telecommuters.
The Telecommuter Tax Fairness Act would prohibit states from taxing nonresident telecommuters on the income they earn while working from home. It would enable individuals, businesses, communities, and government to maximize the many important benefits of telecommuting.
Telecommuting is crucial to achieving some of our nations highest priorities. Telecommuting can keep our government and businesses operating during emergencies. It can help businesses reach their bottom lines faster without having to ship jobs offshore, and it can bring new jobs to rural communities. It can reduce traffic, air pollution, transportation spending, gas prices and our dependence on foreign countries for oil. It can help seniors work longer and postpone their reliance on Social Security; help the disabled (including our injured war veterans) contribute to the economy; and help employees balance the competing demands of work and family. Further, federal law requires federal agencies to make telecommuting available to all their eligible personnel. A state tax on interstate telecommuting flies in the face of our federal goals and federal law.
The state tax rule that The Telecommuter Tax Fairness Act would eliminate is called the convenience of the employer rule. It has been on the books of a number of states but applied most aggressively by New York. In a state applying the rule, if a nonresident chooses to telecommute some of the time to an employer located inside the state, the state may tax the telecommuter on 100\% of his or her income, including the income earned from home. Because the telecommuters home state may also tax the income earned from home, the telecommuter may have to pay taxes to both states on the same income. This double tax risk can make telecommuting too expensive for many Americans and thus discourage it.
We urge you to endorse The Telecommuter Tax Fairness Act and abolish the telecommuting tax.