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State income tax for each state for full time employee?

joshbegin
Explorer
Explorer
I currently live in FL and work remotely for a midsize corporation that has offices in 7 or 8 states (including FL). I would like to move to the Idaho, but the company has stated that the tax implications (to them) are too high to justify having an employee there. As a workaround (not to evade taxes...I would gladly pay ID state income tax if I was able to), I have thrown around the idea of full timing to be able to spend some time in Idaho and various other places. After searching for articles/posts and reading more about tax laws than I ever wanted to, I'm very confused on whether or not this would be ethical/legal. I realize that this is probably a question for a tax attorney, but wanted to get some input here first.

Would it be possible to keep my domicile as FL and travel to other states without impacting my employer negatively? Would I be a non-resident of each state I visited and have to file a tax return for each? Is there a minimum amount of time I would need to spend in a given state before being taxed?

I'm just in the research phase, so any input would be appreciated. Thanks in advance!
19 REPLIES 19

rehoppe
Explorer
Explorer
It sounds like you just need to work more while on Vacation.... smiles everyone.

'Well I DO work full time, 2 weeks a year.'

Most of this society, is not set up to accommodate our migratory way of life, I'm afraid.
Hoppe
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joshbegin
Explorer
Explorer
I am a software developer, so I wouldn't actually be doing specific jobs while in any state, but I do use a company laptop, and it seems like that alone means the company has nexus in the state I'm in (or at least in some states). I'm still going back and forth with them to see if there is an arrangement that would let me live in any state (maybe buy my own computer or work as a contractor), so I haven't completely given up hope, but it seems like the RV route would probably have the same issues so I don't think I will pursue it. Thanks for all the input!

TenOC
Nomad
Nomad
joshbegin wrote:
but the company has stated that the tax implications (to them) are too high to justify having an employee there.


This sounds to me like a SALE TAX issue not an income tax issue. By having a employee (Office ? -- present?) in a state, the company may need to collect sales taxes on all products sold in that state. Many states have different sales rates for each city or county in the state. The Sales Tax issue (cost to collect) is much more of an expense for a company that the income tax issue.
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monkey44
Nomad II
Nomad II
For a good part of my work, I traveled to various states and performed "work" in the sense I shot travel photos for magazines. BUT, according to my tax guy, my state tax was only relevant in the state where I lived, and the state where I received my assignments -- Massachusetts at the time. I never filed any state tax in any other state because according to my tax guy, no matter where I traveled to perform my assignments, I got paid only in my home state. So, it's where you get paid, where the home offices is that assigns the work.

It may be different if you go to a state, say, and work on some equipment, or install some equipment. Otherwise, even doing IT support for example, you'd have to pay tax in every state where you 'helped' anyone untangle IT on a web contact. That would make no sense. So it makes more sense that you pay tax in the state where you receive your pay check.
Monkey44
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Redterpos3
Explorer
Explorer
2vrdks wrote:
The issue your employer is referring to is nexus or their legal connection to a state.


x2 - so what you really need to find out is if you can hit the road, and go to Idaho for ?how long? before making the company liable for having an office in that state.

This is the internet age, and a lot more of these questions are coming up. I'd like my wife to figure out how to teach her university classes online someday so we can hit the road!!!
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ncrowley
Explorer II
Explorer II
I live in Utah but my employer is in New Mexico. I work remotely. I have to pay taxes in Utah but there is no issue for the corporation that I know of but I am not a tax attorney. I am sure the company you work for has people that understand the law and can explain it to you.
Nancy
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Community Alumni
Not applicable
joshbegin wrote:
I currently live in FL and work remotely for a midsize corporation that has offices in 7 or 8 states (including FL). I would like to move to the Idaho, but the company has stated that the tax implications (to them) are too high to justify having an employee there. As a workaround (not to evade taxes...I would gladly pay ID state income tax if I was able to), I have thrown around the idea of full timing to be able to spend some time in Idaho and various other places. After searching for articles/posts and reading more about tax laws than I ever wanted to, I'm very confused on whether or not this would be ethical/legal. I realize that this is probably a question for a tax attorney, but wanted to get some input here first.

Would it be possible to keep my domicile as FL and travel to other states without impacting my employer negatively? Would I be a non-resident of each state I visited and have to file a tax return for each? Is there a minimum amount of time I would need to spend in a given state before being taxed?

I'm just in the research phase, so any input would be appreciated. Thanks in advance!


In my opinion your employer is not concerned about the state income tax you would pay in Idaho but other pay roll taxes such as SSI and workers comp and so on. Also not good to set a trap for yourself here on how many states you work in. God forbid if California get wind of this as they will send you papers, go ahead and ask how I know, no don't ask.

JimR

tatest
Explorer II
Explorer II
It has to be sorted out for each state. Some proportion on where you reside, some on where income is earned. A domicile state might want taxes even if you do not reside, work, or get paid there. I live in a state where domicile = residence for tax purposes, and have previously lived in a state where what mattered was where the income was earned.

How much time you can be in a place without being a resident varies quite a bit also, and it is different whether or not you are working in that state, or living there and working in another state. I suspect your employer may find this solution even more trouble than having you live in Idaho; businesses tend to locate in Florida to avoid the cost of dealing with state income tax.

I know, have worked with, a number of people who work as consultants, some internationally, some just around the U.S. They have various arrangements to deal with income tax issues, some based on "you are paying my firm for services, where it is headquartered" but a lot of what makes it work is that the job is only a few days to something short of two weeks. Even then, the task often gets booked as a "business meeting" local rather than a service. I know some who maintain multiple part time residences in states with particular tax laws and have another in an offshore tax haven, do most of their work in places they don't reside, and I don't have a clue about their domicile, but do know they have good professional tax help for guidance.

If you really want to live most of the time in Idaho, and your employer doesn't want to deal with the tax problem, I suspect your employer will not want to deal with a messier problem of moving from state to state at intervals. A really good tax attorney could probably work out a plan, but it likely would not involve living any significant length of time in a state that proportions income tax based on residence.
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2vrdks
Explorer
Explorer
The issue your employer is referring to is nexus or their legal connection to a state. Most states say that if a a company has employees in their state, the employer is required to file an income tax return in that state and allocate income to that state using either 1 factor or 3 factor method, depending on the state.

If you move to ID, it will result in additional tax filing requirements for them. Unless you are a very valuable employee, this may not have a happy ending for your employment status.

This information is based on 36 years as a CPA working in the tax field.

Old-Biscuit
Explorer III
Explorer III
joshbegin wrote:
Thanks for the replies. I know I probably need to talk to a tax pro, but just wanted to get some general input before doing that. It seems like the tax laws do not account for modern technology very well yet. Using the "if you're in the state while working, you have to pay taxes to that state" logic, I should file a return for many states each year since I check my work email whenever traveling and even work for a day or two from wherever I'm vacationing. Also, that would mean my co-workers need to file for additional states when the company flies them to offices in different states. What a pain! I know that doesn't happen, so maybe they are just unaware and no one has caught them yet.

I guess no one ever said taxes or laws were easy or made sense...

Thanks for the input. I'll decide whether or not to contact a pro, but at this point it seems like it may be more trouble than it's worth.


Talk with payroll
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joshbegin
Explorer
Explorer
Thanks for the replies. I know I probably need to talk to a tax pro, but just wanted to get some general input before doing that. It seems like the tax laws do not account for modern technology very well yet. Using the "if you're in the state while working, you have to pay taxes to that state" logic, I should file a return for many states each year since I check my work email whenever traveling and even work for a day or two from wherever I'm vacationing. Also, that would mean my co-workers need to file for additional states when the company flies them to offices in different states. What a pain! I know that doesn't happen, so maybe they are just unaware and no one has caught them yet.

I guess no one ever said taxes or laws were easy or made sense...

Thanks for the input. I'll decide whether or not to contact a pro, but at this point it seems like it may be more trouble than it's worth.

PghBob
Explorer
Explorer
If you earn any income in Pennsylvania, you are expected to pay income tax to Pennsylvania on that money. Just ask any professional athlete (or a tax professional).

Jim-Linda
Explorer II
Explorer II
Tax information from an internet source is at best, a **** shoot. Follow the advise already given and use a professional.

Jim

dahkota
Explorer
Explorer
This is about work camping, but the same general rules apply: RV Dreams - Taxes

More tax information
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