Huckaby V. New York State Division of Tax Appeals: In Upholding the Current Tax Treatment of Telecommuters, the Court of Appeals Demonstrates the Need for Legislative Action

By Bentley, Meredith A. | St. John's Law Review, Summer 2006 | Go to article overview

Huckaby V. New York State Division of Tax Appeals: In Upholding the Current Tax Treatment of Telecommuters, the Court of Appeals Demonstrates the Need for Legislative Action


Bentley, Meredith A., St. John's Law Review


INTRODUCTION

Telecommuting is a growing trend of increasing importance in modern society. Telecommuting occurs when an employee is paid by his or her employer for work done at a location other than the employer's office and, as a result, the employee's total commuting time is reduced.1 The concept of telecommuting began in the 1980s with the increased commonality of laptop computers and the Internet.2 Over the past decade, the number of United States workers who telecommute has consistently increased, and this trend is only expected to continue.3 It is estimated that by 2010, there will be one hundred million telecommuters.4

An important implication of telecommuting, which is of particular concern to individual state governments, is the tax treatment of income earned by an employee performing work for an employer in a state other than where that employer is located. While states differ in their tax treatment of such income, most apply a "physical presence" test, which apportions income based on the number of days a taxpayer has physically worked in each state.5 New York, however, applies its "convenience of the employer test," which provides that all income earned by a nonresident working for a New York employer is taxable by New York State, unless such income was earned by work performed out of New York State for the necessity of the employer, rather than out of convenience.6

In applying this rule to an out-of-state telecommuter, the New York Court of Appeals may have put an end to the growing trend of telecommuting in New York that has been called "the wave of the future."7 Recently, in the four-to-three decision of Huckaby v. New York State Division of Tax Appeals,8 the New York Court of Appeals held that 100 percent of the income of a nonresident employed by a New York employer who spent only 25 percent of his working time in New York State was subject to taxation by New York.9

From 1983 until July of 1991, Thomas L. Huckaby lived and worked in Nashville, Tennessee.10 Huckaby was employed as a computer programmer by Multi-User Computer Solutions ("MCS"), a Tennessee employer, until 1991, when his job was terminated as a result of a reorganization.11 Subsequent to this reorganization, Huckaby was hired by the National Organization of Industrial Trade Unions ("NOITU"), which was based in Jamaica, New York.12 NOITU provides various administrative services to trade unions, such as heath claims payment and pension programs.13 At NOITU, Huckaby's duties included supporting software programs, assisting in selecting new information technology, and meeting any general programming needs of the company.14 NOITU and Huckaby agreed that Huckaby's primary work location would be his home in Tennessee and he would only be required to travel to the New York office when necessary.15 To facilitate this arrangement, NOITU assisted Huckaby in setting up a home office in Tennessee and reimbursed him for his monthly office expenses.16 Huckaby's decision to work in Tennessee, rather than in New York, was purely for personal reasons.17

On his 1994 and 1995 tax returns, Huckaby allocated his income based on the relative percentages of time he spent working in New York and Tennessee.18 On average, Huckaby allocated 75 percent of his income to Tennessee and 25 percent to New York.19 The New York State Department of Taxation and Finance audited Huckaby's tax returns and allocated 100 percent of his income to New York State under the "convenience of the employer test."20 Huckaby paid the deficiencies under protest and commenced legal action.21

On March 29, 2005, the Court of Appeals of New York, in an opinion rendered by Judge Read, applied the convenience of the employer test and upheld the taxation of 100 percent of Huckaby's income because his work was performed out of state for "convenience" rather than the "necessity" of his employer.22 The Court of Appeals determined that, under the relevant New York Tax Law, the legislature intended to tax nonresidents on all income earned while working for a New York employer. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Huckaby V. New York State Division of Tax Appeals: In Upholding the Current Tax Treatment of Telecommuters, the Court of Appeals Demonstrates the Need for Legislative Action
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.