New Jersey and three other states have sided with New Hampshire in its lawsuit against Massachusetts over taxing commuters that have been homebound since the outbreak of the novel coronavirus, saying remote work should be taxed in the state where the labor is performed.
Connecticut, Hawaii, and Iowa joined New Jersey’s amicus brief filed with the U.S. Supreme Court on Tuesday, challenging states who levy their income tax on non-residents who commute.
NorthJersey.com, the website affiliated with several Gannett newspapers including The Record of Hackensack, said New Jersey is seeking to recover as much as $1.2 billion in tax revenue that it foregoes as part of a tax credit it offers to residents who work in New York.
"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,” Gov. Phil Murphy said in a statement quoted by NorthJersey.com.
“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."
Although many southern New Jersey residents work in Philadelphia, they seemingly would not be affected by the lawsuit since the Garden State has a reciprocity agreement with Pennsylvania.
The issue was raised in October when New Hampshire, led by its Republican Gov. Chris Sununu, sued Massachusetts over its income tax levied on residents of the Granite State, many of whom commute and work in Boston.
CNBC reported that seven states tax workers based on the location of their place of employment, regardless of whether they work remotely. Those are Arkansas, Connecticut, Delaware, Massachusetts, Nebraska, New York and Pennsylvania. Massachusetts, however, adopted their tax as a temporary measure at the onset of the emergency health declaration due to the novel coronavirus.
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