Non-Resident and Mobile Workers: State Tax Traps for Employers

Anticipating and Avoiding Unnecessary Withholding Tax Duties and Nexus Triggers

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, April 25, 2017

Recorded event now available

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Program Materials

This webinar will familiarize corporate tax professionals with differing state policies on withholding tax obligations for non-resident employees or those employees who work in other states periodically. The panel will outline a framework for companies to avoid unplanned and unwanted nexus, taxes or administration.

Description

Most large and mid-sized companies periodically send employees off to visit customers, company sites or sales prospects in other states. Odds increase every year that those visits will trigger unwanted state withholding tax registration or exceed P.L. 86-272 nexus protections.

Many states impose withholding tax administrative duties if an out-of-state firm sends staff there for even a few days a year or permits an employee to telecommute. Costly withholding registration can lead to audits that scrutinize for even more tax obligations. Congressional efforts to set a minimum physical presence standard for states have stalled.

Tax specialists must grasp rules in each state for potential tax implications due to visits to that state by non-resident employees—and keep pace with developments like the MTC model law and others. Tax considerations must play a prominent role in decisions about where to send people and how often.

Listen as our panel of veteran state tax advisers deconstructs the trend toward non-resident tax allocation with the use of specific state policies and examples of real taxpayers to prepare you to properly respond to that trend.

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Outline

  1. Principals of state tax and nexus in this area
  2. Latest developments in state positions
    1. Laws, regulations, court rulings
  3. Potential federal and multi-state solutions to the issue
  4. Particular issues with unemployment taxes
  5. Particular issues with withholding taxes
  6. Administrative challenges and options
    1. Trends in audit
    2. Background on HR, stock plan, relevant payroll systems
    3. Challenges with employee movement

Benefits

The panel will address these and other on-point issues:

  • Withholding tax issues: What are the de minimis standards for non-resident employee visits to different states requiring companies to register for withholding tax purposes? When does telecommuting trigger nexus for an out of state company? How much tax should be allocated to each state?
  • State corporate income tax issues: For which states can occasional employee visits for certain purposes actually exceed P.L. 86-272 protections? Can withholding tax registration start a domino effect toward an eventual corporate income tax bill?
  • Corporate tax department strategies: How can tax professionals effectively oversee and influence their companies’ use and management of traveling employees and telecommuters?

Faculty

Dolson, Mary Jo
Mary Jo Dolson

Partner
Skoda Minotti

Ms. Dolson has more than 30 years of experience in the SALT arena and nearly every state, including corporate...  |  Read More

Debra Silverman Herman
Debra Silverman Herman

Partner
Hodgson Russ

Ms. Herman is widely recognized for her experience in state and local taxation. She works with a variety of...  |  Read More

Pascal, Elizabeth
Elizabeth Pascal

Partner
Hodgson Russ

Ms. Pascal concentrates her practice in tax law with a focus on New York State, New York City, and multistate tax...  |  Read More

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