"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

I certainly hope not :-)

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Victor Roberts <xxx[at]lighting-research.com> wrote:
- quote -

Same time next year?

Stu

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Katie" <katiej_1958[at]yahoo.com> wrote:
- quote -

Certainly I do :-)

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Victor Roberts wrote:
- quote -

I just checked the archives and realized that you and I had
almost this exact same conversation last year. Guess we
both have short memories <G> .

Katie

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Katie" <katiej_1958[at]yahoo.com> wrote:

- quote -

Thanks again.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Victor Roberts wrote:
- quote -

I don't know of a published case where a state has argued
that a nonresident had source income from merely traveling
through the state on business. I suppose the argument could
be made, but unless the taxpayer was a multi-millions earner
(maybe Grasso? <G> ) it wouldn't be worth the state's cost to
pursue it.

If a state did assert such a thing, I would argue that
although I was paid for the time I spent traveling through
the state, I was not performing services for my customer
during that time. I was just getting to the place where I
was going to perform the services.

By the way, there are some special rules under federal
statutory law limiting states' rights to tax the income of
nonresident employees of interstate travel businesses, e.g.,
railroad and airline employees.

- quote -

I think there have been some cases on this. There have also
been issues with respect to sales and alcoholic beverage
taxes. I think the upshot is that only the state where the
plane lands and takes on food and beverages, etc. has the
taxing power.

- quote -

You don't think the Governator would seek additional tax
revenue, do you? <G
Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"Victor Roberts" <xxx[at]lighting-research.com> wrote:
- quote -

Well, interstate truckers are finding out this is the case:
carry a load from IN to PA, you have to go through OH; OH
now wants a piece of the action.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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Katie" <katiej_1958[at]yahoo.com> wrote:

- quote -

Let me take this one step further - perhaps to the absurd -
or perhaps not.

I charge for travel time. So if I drive from my home state,
A, to state B, which I perform services, but drive through
state C, it seems I would then need to file and pay taxes to
state C since I was paid for the time I spent driving
through state C.

When I fly from my home state to California or Japan, I
connect in Chicago. The time between flights is all paid
time. It seems I should then file and pay taxes in Illinois.

Now the most absurd question - do states get "air rights"?
On my way to California I may fly over 10 different states.
Do they have rights to the wages I earned while the plane
was in their air space? I believe that at one point in time,
airlines could not serve alcoholic drinks when flying over
'dry" states - or is this just folklore?

--
Vic Roberts
Replace xxx with vdr in e-mail address.

MODERATOR: Please do not give Kal-E-forn-ya ideas!

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Katie" <katiej_1958[at]yahoo.com> wrote:

[snip]

- quote -

[snip]

Thanks!

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Victor Roberts wrote:

- quote -

Many states have a de minimis threshold, sometimes stated,
sometimes not, below which they will not require a return.
Stated thresholds tend to be low, in the $1,000 to $1,500
range; some are stated in number of days. Many states don't
say anything official and technically require a return if
the taxpayer has income from sources in the state and has
enough total (from all sources) income to meet filing
requirements; others require a return if there is any tax
due.

These requirements are often honored in the breach by
employers. The national accounting/consulting and law firms
were blissfully unaware until they were threatened with
criminal action in the late 1980's. I think they are all in
compliance now, but I'm sure many regional and smaller firms
still have no idea they have a problem.

If the employer does nothing in the state other than holding
training seminars there, it may not meet the requirements
for "doing business" in order to be subject to tax. That
doesn't necessarily excuse the employee from individual
income tax liability, though. An employer that does a lot
of training in a state may negotiate an agreement that wages
earned as a participant in training are not considered to be
sourced there. Arthur Andersen had such an agreement with
the State of Illinois so that participants at the
educational facility in St. Charles were not subject to
Illinois income tax. However, after I went on the St.
Charles payroll as a full-time subject expert, I didn't
qualify for the exemption any more and did file Illinois
returns and pay tax to the extent I worked in Illinois. (I
was mostly a distance telecommuter, working at home in
California.)

- quote -

It doesn't matter. The source of income from personal
services is the place where the services are performed, not
where the paycheck comes from.

- quote -

Yes, you have an obligation to all the states where you
perform services, and your C corporation is a taxpayer in
all those states as well. (That may not be significant if
you are taking all or most of the income out as salary.)
Subject, of course, to de minimis rules where they exist.

Income from foreign sources is generally not exempt from
federal or state income tax. Two weeks in Japan would not
qualify you for the IRC Sec. 911 exclusion. Whether Japan
would consider you and/or your corporation to be subject to
tax is beyond my knowledge.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"Victor Roberts" <xxx[at]lighting-research.com> wrote:
- quote -

Each state has its own rules

- quote -

Probably.

- quote -

Well if nothing else, you need to be out of the country for
300 days.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Thomas Healy <tomhealycpa[at]earthlink.net> wrote:

- quote -

I have a question about "working" in multiple states.

For over 20 years I worked as an R&D engineer for one of the
largest companies in the country. They have operations all
over the country. I was based in NY but was sent to many
states and a number of foreign countries for business
purposes. Many of these trips were only 1 to 2 days long.
Others were 1 to 2 weeks. How long does one have to work in
another state or country for that income to be taxed by that
state or country? This same company holds one month long
management training sessions at a NY location. When
employees who are residents of other states attend this
session, is their salary subject to NY state income tax?

In the case above, I was always paid by the NY operation -
in case that matters.

I now own a one-person consulting company that is organized
as a C Corp in NY. My work often takes me outside NY and the
country. My paychecks all come from the NY Corporation. As
above, do I have any obligation to pay taxes to other states
for work done in those states for days to perhaps 1 week at
a time? The difference here is that the clients who are
paying the corporation may be based in the states where I am
working - or they may be based in a third state. I spent 2
weeks in Japan this past summer working for a client who is
based in NY. Does that count as foreign income exempt from
US income tax? (I have not treated it as such, but now I am
confused.)

--
Vic Roberts
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Ken Kozak wrote:

- quote -

Both. Of course the taxation by Texas is only theoretical,
since Texas does not impose any individual income tax. But
it could if it chose to.

- quote -

States have the power to tax all of the income of their
residents, regardless of source. They also have the power
to tax income of nonresidents from sources within the state.
Income from personal services has its source where the
services are performed. Therefore a resident of State A who
performs services in State B is subject to tax on that
income by both states. Generally, the state of residence
allows credit for the tax paid to the source state. In some
cases, there are reciprocal agreements between states
whereby a resident of one state working in the other is
taxed only by the state of residence.

- quote -

His employer should show his earnings in each state on his
W-2. Since the W-2 form includes only two lines for states,
he will get multiple W-2s if he works in more than 2 states
during the year. The employer should be withholding state
income tax for each state where he works during the year.

- quote -

Depending on the state, it is possible that he may be
considered a resident there, subject to tax on all of his
income, not just his earnings from services performed there.

For example, if he took an assignment for more than a year
in NY, PA, or NJ, and rented an apartment or other dwelling
place there, he would be considered a tax resident of that
state. Those states define a resident to include anyone who
maintains a permanent place of abode and spends more than
183 days of the taxable year in the state. On the other
hand, if his assignment had a definite termination date, and
he maintained his other connections to Texas, he would not
be considered a resident by CA or AZ under similar
circumstances. Those states define a resident to include
anyone who is present in the state for a purpose that is not
temporary or transitory. Since his presence would be
temporary, he would not meet the statutory definition.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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Ken Kozak wrote:

- quote -

He is at the mercy of the tax law of the 5 states. Most
likely, all of the states will tax him on his income earned
for services performed in that state. As a resident of TX,
the employer will not withhold any state income tax. He only
gets one W-2.

If he takes an assignment for over one year, he is again at
the mercy of the tax law of that particular state. It is
highly likely they will want to treat him as a resident for
tax purposes. A resident is taxed on all income, not just
income earned in that state. The burden of proof would be
on him to show that he was not a resident (he was there for
a temporary or transitory purpose). Again, each state has
the right to set its own definition of a resident.

--
Alan
http://taxtopics.net

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"Ken Kozak" <kenkozak[at]sbcglobal.net> wrote:

- quote -

The correct treatment is that the consultant will get one
W-2 with withholding for the income earned in states with an
income tax. He will file as a nonresident in each state that
has an income tax. He does not have a Texas filing
requirement, since Texas has no state income tax. Whether
the firm will do it that way is an open question, however,
because it means having to register to do business in each
of those states.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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A consultant who lives in Texas becomes a W-2 employee of a
consulting firm in California. His assignments will be in
multiple states during the year, but he will maintain his
home in Texas.

Assuming he works in a state that has state taxes, will he
be taxed in that state or in Texas? What determines this?
Length of assignment? What happens if he works in 5 states
during the year? Does he get 5 W-2s? And what happens if
he takes an assignment of over a year length in another
state?

If you don't know the specifics, where can I look up this
subject on the web, or can you suggest a book?

Thanks.

Ken

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