Weekly Round-Up: New Jersey’s Aggressive Stance on Telecommuters

The presence of a single employee telecommuting from New Jersey is enough to subject an out-of-state corporation to the state's Corporation Business Tax, according to a new decision issued by the New Jersey Superior Court, Appellate Division.

The impact of the case, Telebright Corp. v. New Jersey Div. of Taxn., N.J. Super. Ct. App. Div., No. A-5096-09T2 (March 2, 2012),is likely to be far-reaching, according to one practitioner.

The Telebrightdecision illustrates how tax policy can thwart the growth of telework at a time when expanding the use of this work and transportation option is critical, Nicole Belson Goluboff, Legislative Advisor to the Telework Coalition, told Bloomberg BNA March 7.

Despite telework's capacity to boost employment rates and reduce traffic congestion—despite its capacity to cut oil consumption, carbon emissions and transportation infrastructure costs—the Telebright decision will discourage companies from distributing its workers, she said.

The decision will deter companies from offering jobs to workers in other states on a telecommuting basis and from retaining valued employees who need to relocate, Goluboff said.

“Like the double income tax penalty that has long menaced interstate telecommuters—a cure for which Congress is now considering—the Telebrightdecision reflects short-sighted policy on long-distance employment,” she said.

For a complete look at the court’s reasoning, including its dismissal of Telebright’s Due Process and Commerce Clause claims, as well as insight on the decision from Richard Bove, attorney for Telebright, check out this week’s issue of the Bloomberg BNA Weekly State Tax Report.

In other developments…

The Tax Foundation releases Fiscal Fact No. 293, Meals Taxes in Major U.S. Cities, authored by Joseph Henchman, Alex Raut and Kevin Duncan.

Gift cards distributed as part of an award, loyalty or promotional program are not subject to Ohio sales and use tax, according to the Ohio State Tax Blog.

The National Association of State Budget Officers compiles a list of proposed 2013 state budgets and enacted state budgets from prior years.

Alabama legislature working to pass various job creation and economic incentives bills, a new State and Local Tax Alert by Bradley Arant Boult Cummings LLP explains.

Read, in its entirety, William H. Carlile’s story on record-setting sales tax collections under the streamlined sales plan, published in this week’s issue of the Bloomberg BNA Weekly State Tax Report.

Compiled by Priya D. Nair
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