States Pushing The Borders To Get More Tax Dollars

Cash-strapped states are desperate for tax money, and they're doing anything they can to get their hands on it. Their newest plan? Going after job commuters.

It may be the new high-water mark of desperate times, but state governments, badly strapped for cash, are looking to get their hands on your money. And they've got a novel new plan to do it.

See, these days, a lot of people make money in a lot of different places. Maybe a commuter crosses state lines to work some days--especially sales reps and other such travelers. Well, the states are starting to figure that, since these people make maybe a day's worth of income in another state, they should be paying taxes on that the state in which it was earned.

This is actually, technically, law on the books already in a lot of states, but it's generally unenforced as the amounts were tiny and not exactly worth making much fuss over. That and it's next to impossible to prove conclusively just how much of the day was involved in making income, and thus further impossible to prove conclusively just how much tax is owed. But states are taking a run at it anyway, and this could do horrible things to interstate commerce.

Consider, for a moment, someone who works in Indiana goes to a trade show in New York for work. They may not make any sales while they're there, but they did draw a salary for their time there. So now, New York figures our mythical trade show man owes them a cut of that day's pay. This means, in turn, mythical trade show man would have to file a New York state tax return for his day there.

Sounds like crazy talk, I know...but with states as desperate as they are for cash, well, anything's possible.

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  • JA Aronson

    March 24, 2010

    This has all sort of logistical problems. It may be legal, but it isn't easy for States to get this revenue.

  • SteveAnderson

    March 24, 2010

    JA--you mean it WASN'T easy. But now, with traffic tickets and growing databases and such, tracking interstate movements is easier than it was.

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