New Jersey is latest state to join Supreme Court battle over income taxes on remote workers
A group of states joined a U.S. Supreme Court battle that could determine whether jurisdictions can tax the income of remote workers who are no longer commuting to the office.
New Jersey, along with Connecticut, Hawaii and Iowa, submitted an amicus brief on Tuesday in a lawsuit that challenges the authority of states to tax nonresidents’ income while they’ve been working from home.
At the center of the controversy is a court case between New Hampshire and Massachusetts. The Bay State has been taxing New Hampshire residents who have been working remotely since the pandemic, spurring the Granite State to file suit against Massachusetts in October.
New Jersey’s brief supports New Hampshire’s position.
The brief also pushes back on New York, which taxes Garden State residents who normally commute there — even though many are now working from home.
“In the course of this once-in-a-century pandemic, hundreds of thousands of New Jersey residents who typically commute to New York and pay New York taxes have been working from home for the last nine months,” said New Jersey Gov. Phil Murphy, a Democrat, in a statement.
“We are hopeful that the Supreme Court will hold that states do not have the constitutional authority to tax individuals who neither live nor work there,” he said, adding that such a ruling could save the state $1.2 billion.