Supreme Court Declines to Hear Interstate Telecommuting Tax Case

Chris Gaetano
Published Date:
Jun 28, 2021
iStock-922171778 SCOTUS United States US Supreme Court

The U.S. Supreme Court declined to hear a case involving the tax consequences of remote workers, a major question that has emerged in the wake of the pandemic, CBS reported.

The state of New Hampshire had filed suit against the state of Massachusetts over the latter's regulation governing remote workers. (Under the Constitution, the Supreme Court has original jurisdiction when one state sues another.)  Under the regulation, Massachusetts taxed those who normally work in the state but who switched to remote work in another state when the pandemic hit, save for a very narrow band of exceptions. The policy, similar to New York's, assumes that the workers were in Massachusetts and counts the income that they generate as Massachusetts income, despite the workers not having been physically in that state at the time. CBS said that about 100,000 residents of New Hampshire, which has no income tax, had regularly commuted to Massachusetts, which has a 5.05 percent income tax.

In refusing to hear the case, the court fulfilled the wishes of the Biden Administration, from which the justices had sought input earlier in the case. U.S. Acting Solicitor General Elizabeth B. Prelogar, in response, said it would be best if the court did not hear the case at all. Prelogar argued that the case should have been filed in a lower court by individuals who'd been harmed by the Massachusetts tax, and that it should have reached the Supreme Court through the appeals process.

The Massachusetts regulation was set to remain in effect until 90 days after the coronavirus state of emergency in Massachusetts is lifted. The state of emergency was allowed to expire on June 15. 

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