Measure will protect Connecticut telecommuters from New York taxation

In an effort to protect telecommuters in Connecticut and nationwide from unfair double taxation, Senator Chris Dodd and Representative Christopher Shays yesterday reintroduced a measure to prevent the State of New York from levying taxes on Connecticut telecommuters for work they perform in Connecticut.  Senator Lieberman is an original cosponsor of the legislation in the Senate.

“Connecticut’s workers help drive our economic growth. They shouldn’t have to pay an unfair ‘toll’ tax simply because they work from home,” said Dodd. “Telecommuters in our state play a big part in our economy and they shouldn’t be penalized for their work. This measure will help shield and protect them from unfair and unwarranted taxes and ensure that they can reap the benefits of telecommuting.”

"This bill is about fairness. It is simply unfair to tax Connecticut telecommuters twice." Shays said. "We are promoting a policy that will help bring taxation in line with current realities of technology and promote telecommuting, which can improve gridlock and reduce environmental harm."

“Technological advances are providing workers with opportunities to perform their job duties from their home, allowing them to spend more time with their families and reducing the burden on roads and mass transit,” Lieberman said.  “These workers should not be punished by being subjected to a double tax from another state.  This legislation will ensure that workers who telecommute from Connecticut and throughout the country are treated fairly.”

Currently, the state of New York requires telecommuters to pay income tax on 100 percent of their earnings regardless of where they work as long as their company is based in New York. Employees who work part-time from home in Connecticut must pay income taxes to New York for work performed in Connecticut, while they are also obligated to pay taxes to Connecticut for that same work. The result is that many Connecticut workers are taxed twice on income earned while telecommuting - once by Connecticut, and again by New York. This threat of double taxation can serve as a powerful disincentive for people to telecommute.

Dodd and Shays’ initiative will prevent states like New York from collecting taxes from employees for work performed outside that state. Under the legislation, employees would have to be working within the state in order for the same state to be authorized to collect income tax from the employee.

Today, telecommunications advances such as cell phones, email, and mobile networking provide Americans with greater flexibility about where they can work without compromising productivity.  In many instances, telecommuting ultimately benefits families, employers, communities, and the economy. Telecommuting also allows workers to be more involved at home with their families by avoiding a daily commute. Communities benefit by less congested roads, rails, and sidewalks, and the reduction of air-pollution caused by heavy volumes of traditional commuters. Telecommuting is not just a convenience for workers, but it is also an asset to companies and a relief to local governments.

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