Perspective

Constitutional Limitations

New York’s Convenience-of-Employer Doctrine Cries Out For Congress to Stop State Taxation of Interstate Telecommuting                                                              

By Nicole Belson Goluboff                                                  

A nationally recognized legal author and speaker, Nicole Belson Goluboff is the author of The Law of Telecommuting (ALI-ABA 2001, with 2004 Supplement) and Telecommuting for Lawyers (ABA 1998). She serves on the advisory board of The Telework Coalition and is past chair of the Subcommittee on Telecommuting of the ABA Young Lawyers Division Women in the Profession Committee. She has previously practiced as both a telecommuting and office-based litigator and is a graduate of the Columbia University School of Law. She can be reached at Goluboffn@gmail.com.

INTRODUCTION

On April 26, 2004, the U.S. Supreme Court denied certiorari in Zelinsky v. Tax Appeals Tribunal of New York,(Document link: Link to footnote reference 1)1  a case concerning the constitutionality of New York’s “convenience of the employer” doctrine.  In refusing to review this doctrine, the court effectively sanctioned New York’s policy of subjecting to double taxation nonresidents who telecommute to their New York employers.  The court’s decision may have significant consequences for states’ authority to impose extraterritorial taxes and for the growth of telework in this country.

Draft federal legislation is circulating in Washington, D.C. that would prohibit states from applying a rule similar to New York’s convenience rule.  Specifically, the bill prohibits states from (1) imposing nonresident income taxes on the salary nonresidents earn while they are physically located in another state; and (2) treating nonresidents as if they were present in the taxing state on the grounds that the nonresidents were working at home for their own convenience.

The push is on to gather congressional sponsors for this bill.  Participating actively in this effort is an organization called The Telework Coalition (TelCoa), an advocacy group dedicated to promoting telework.  TelCoa has made available on its Web site (www.telcoa.org) letters urging enactment of remedial legislation. Web site visitors  can send, either electronically or by postal mail, a copy of these letters to their representatives in  the House and Senate. To redress the numerous problems that can arise when states do apply a policy like New York’s, enacting such legislation is imperative.

 CONVENIENCE OF EMPLOYER DOCTRINE

New York taxes nonresidents’ income to the extent that the income is attributable to New York.  Under the convenience-of-the-employer rule, when a nonresident performs work for a New York employer both within and outside the state, the nonresident may limit his or her New York source income to that earned while he or she was in New York State (and allocate the rest to the state where it was earned) but only if the out-of-state work was a “necessity.” Employees telecommuting for their own convenience must treat the days worked outside New York as though they were worked inside New York. Link to footnote reference 2)2

Proving that telework was necessary is extremely difficult.  Even if the employer required the telecommuter to work from home and eliminated the worker’s New York office space, the state will deem the income earned elsewhere as taxable by New York if the nature of the work is such that it could have been performed there.(Document link: Link to footnote reference 3)3  Because a telecommuter’s home state also may tax the income he or she earned at home without offering a credit for the New York tax, the interstate telecommuter may be subject to double taxation solely because he or she telecommutes.

FACTS OF ZELINSKY CASE

Edward Zelinsky is a Connecticut resident and a professor at Cardozo Law School in New York City.  During the two tax years at issue, he came to New York on certain days to teach classes, and he worked at home on other days, preparing exams, writing student recommendations, and conducting academic research.

On his New York state nonresident income tax returns, Zelinsky treated the income he earned while teaching in New York as New York income and the income he earned while working at home as Connecticut income.  New York claimed that, because he worked from home for his own convenience, his entire income-including that earned in Connecticut-was subject to New York tax.  Connecticut also taxed the income Zelinsky earned at home and did not provide a credit for the taxes New York assessed.

The professor challenged New York’s convenience rule on the ground that, as applied to him, it violates the commerce and due process clauses of the U.S. Constitution.  New York’s Court of Appeals rejected Zelinsky’s claim, and Zelinsky appealed to the U.S. Supreme court.  In seeking the U.S. Supreme Court’s review, Zelinsky argued that New York violated      the commerce clause by failing to apportion his income between New York and Connecticut and by creating the risk of multiple taxation.(Document link: Link to footnote reference 4)4  He emphasized that if “New York taxes the income of nonresidents in an unapportioned and extraterritorial manner, it matters not whether Connecticut actually levies a second income tax.  It is the creation of the risk which violates constitutional norms against multiple taxation.”(Document link: Link to footnote reference 5).

Zelinsky also argued that New York violated the due process clause by imposing taxes extraterritorially: “Through the employer convenience rule, New York knowingly reached into the petitioner’s out-of-state home through the fiction that his days spent in Connecticut (a majority of the petitioner’s working days) were really days spent in Manhattan.”(Document link: Link to footnote reference 6)Connecticut’s Attorney General filed a brief as amicus curiae, arguing that    thousands of Connecticut telecommuting residents are burdened with the double taxation that is the result of New York’s unconstitutional method of apportionment of their income.”(Document link: Link to footnote reference 7)7

DECISION OF NEW YORK COURT OF APPEALS

Purpose of Convenience Rule

The New York Court of Appeals explained that the original purpose of the convenience rule was to preclude nonresidents from using telework as a subterfuge to reduce their New York income tax obligations.  Specifically, the rule was “adopted to prevent abuses arising from commuters who spent an hour working at home” each weekend day and “then claimed that 2/7 of their work days were non-New York days and that 2/7 of their income was thus non-New York income, and either free of tax (if the state of their residence had no income tax) or subject to a lower rate than New York’s.”(Document link: Link to footnote reference 8)8  The court noted that, “in the absence of the convenience test, opportunities for fraud are great and administrative difficulties in verifying whether an employee has actually performed a full day’s work while at home are readily apparent.”(Document link: Link to footnote reference 9)9

This observation smacks of the anachronistic prejudice that telecommuters cannot be trusted truly to work when outside the traditional workplace.  However, the fear that teleworkers are not actually working does not justify the convenience rule.  As Professor Walter Hellerstein has explained:

Presumably, it is more difficult to monitor nonresidents’ claim of non-New York work days when the standard is simply whether the nonresident is working outside the state (for example, at home) than if the standard is whether the nonresident is working outside the state due to the exigencies of his or her business.  Nevertheless, the appropriate response is not to deny altogether the possibility that a nonresident is in fact

working outside New York for his or her own convenience, but to demand more stringent proof that such work actually occurred.  In Zelinsky’s case, his impressive record of scholarly publications should put to rest any suggestion that he was not in fact working in Connecticut. (Document link: Link to footnote reference 10)10

Constitutionality of Convenience Rule under Commerce Clause

Effect of Telecommuting on Interstate Commerce

The court opined that the work Zelinsky did in Connecticut did not implicate the commerce clause because it did not affect interstate commerce.  To support this conclusion, the court assumed that the work the tax scholar performed in Connecticut was subordinate to the work he did in New York.

Specifically, the court described “teaching classes and meeting with students” as the  “primary duties of [Zelinsky’s] occupation.” And it described the service Zelinsky provided when he was in Connecticut-including his legal scholarship-as “auxiliary” and “ancillary.” According to the court, “all of petitioner’s teaching is accomplished in New York and his voluntary choice to bring auxiliary work home to Connecticut cannot transform him into an interstate actor.”(Document link: Link to footnote reference 11)11 However, the decisions of the lower courts in the case reflect that there was no foundation for the presumption that the professor’s at-home work was subordinate to his in-state work.  In his analysis of Zelinsky’s due process claim, Administrative Law Judge Dennis M. Galliher conceded that “[t]here is no basis in the record for concluding that petitioner’s work at home was `ancillary’ to his employment, as opposed to part and parcel of the duties imposed on and expected of him by his employer.”(Document link: Link to footnote reference 12)12  Similarly, the State’s Tax Appeals Tribunal, while describing Zelinsky’s at-home duties as “ancillary,” nonetheless observed that the “facts do not indicate what weight, if any, the law school placed on [those] duties or if they were aware of or condoned his activities…. [T]he school’s position is critical because if [Zelinsky’s] value to the school is his presence in the classroom … then it is not unreasonable to conclude that his three days [per week] in New York comprise 100% of the basis for     his salary and [are] fully allocable to New York.”(Document link: Link to footnote reference 13)13

The appeals court’s suppositions about the relative priority of Zelinsky’s various job functions may, indeed, have been misplaced.  As Cardozo currently describes its faculty on its website, “Professors at Cardozo are … committed to the twin goals of teaching and scholarship.”(Document link: Link to footnote reference 14)  Cardozo emphasizes that the “faculty is prolific, writing on both visionary and practical subjects, with many of their publications required reading in law schools across the nation.” Further, the “number and quality of their scholarly publications put the Cardozo faculty in the top rank nationally.”(Document link: Link to footnote reference 15)15  Thus, in Cardozo’s view, Zelinsky’s legal scholarship is more than an “ancillary” part of his job.

While the appeals court asserted that the tax at issue “is imposed on income derived from the activity of [intrastate] teaching,”(Document link: Link to footnote reference 16)16  the court’s analysis belies that the tax is effectively imposed on the activity of interstate telecommuting.

The court indicated that one goal of the convenience test is to assure the equitable   tax treatment of resident and nonresident telecommuters: The convenience rule prevents nonresidents from altering “their New York tax liability by choice of auxiliary work location in a manner unavailable to similarly situated New York resident employees.  Since a New York resident would not be entitled to any special   tax benefits for similar work performed at home, neither should a nonresident.” (Document link: Link to footnote reference 17)17

This justification for the rule evinces that New York imposes a tax on the income nonresidents earn while telecommuting precisely because they choose to earn it in their out-of-state homes: The tax is a penalty for their interstate telework.

Commentators have repudiated the proposition that the convenience rule is necessary to assure the equal tax treatment of resident and nonresident telecommuters.  They have argued that the U.S. Constitution does not give states the power to tax residents and nonresidents the same way.(Document link: Link to footnote reference 18)18

Further, even if imposing equal tax burdens on residents and nonresidents were a permissible goal, the convenience rule does not accomplish it. Rather, while resident telecommuters must pay state income taxes to only one state, the rule subjects nonresident telecommuters to taxation in multiple states.  As Professor Zelinsky explained in his petition for certiorari: “New York has effectively promulgated a policy which encourages intra-New York telecommuting, but which discourages interstate telecommuting via double taxation of income attributable to nonresidents’ days worked at their out-of-state homes.  This is a classic instance of the systematic state-based protectionism the Commerce Clause is intended to stop.” (Document link: Link to footnote reference 19)19

FAIR APPORTIONMENT

After concluding that Zelinsky’s telework did not affect interstate commerce and, therefore, did not raise commerce clause concerns, the court addressed whether, even if his work did implicate the commerce clause, New York’s “tax on his nonresident income is fairly apportioned.”(Document link: Link to footnote reference 20)20  In determining that the tax is fairly apportioned, however, the court relied, at least in part, on circular reasoning.

The regulation setting forth the convenience rule provides a formula for determining income derived from New York sources when an employee works partly within and partly outside New York.(Document link: Link to footnote reference 21)21  To satisfy the commerce clause, the tax imposed based on this formula must be fairly apportioned.  According to the court, however, the tax imposed on Zelinsky was fairly apportioned “because the entirety of the taxpayer’s salary is derived from New York sources….”(Document link: Link to footnote reference 22)22  That is, the formula for determining what is New York source income is constitutional because the income that was taxed based on that formula was, in fact, New York source income.  On the court’s view, merely applying the formula assures its constitutionality.

The court’s assessment that Zelinsky’s income was New York source income depended on the same unfounded assumption the court made when concluding that Zelinsky’s work did not involve interstate commerce, namely, that the work Zelinsky did outside New York was secondary to his work in the classroom: “[T]he taxpayer is primarily engaged in the business of teaching.  It is for this that Cardozo hired him and for this that he is paid…. From the perspective of his employer, as long as he performs his teaching responsibilities as scheduled, it matters not when or where he performs his ancillary functions.”(Document link: Link to footnote reference 23)23

However, the fact that Cardozo may not have worried about when and where Zelinsky conducted his research or graded his students’ examinations does not mean that the school did not hire him to perform that work or pay him for it.  It means only that the work could be done anywhere and that the school trusted him to do it.  Thus, while Professor Zelinsky’s job included teaching in New York, it also included location-independent work.  And income arising from location-independent work is not necessarily New York source income.

In upholding the convenience rule under the commerce clause, the court also emphasized the benefits that both Zelinsky and Cardozo receive from New York: Zelinsky “is able to earn his salary-all of it-because of the benefits he receives every day from New York,” including, for example, “an employment opportunity and an office….” Further, “New York … provides a host of tangible and intangible protections, benefits and values to the taxpayer and his employer, including police, fire and emergency health services, and public utilities.”(Document link:

Link to footnote reference 24)24  According to the court, Zelinsky’s “election to [telecommute] does not diminish what New York provides in order to enable him to earn that income.”(Document link: Link to footnote reference 25)25  However, this rationale for imposing tax pursuant to the convenience rule has also garnered considerable disapproval among commentators.(Document link: Link to footnote reference 26)26            

 Nonetheless, according to the Court of Appeals, because the tax was fairly apportioned, the fact that Zelinsky was subject to taxation by both New York and Connecticut does not invalidate it.  The threat of double taxation arose because Connecticut refused to offer Zelinsky a credit for taxes paid to New York, and the commerce clause does not protect Zelinsky from the taxes imposed by his own state of residence.(Document link: Link to footnote reference 27)27

CONSTITUTIONALITY OF CONVENIENCE RULE

Under Due Process Clause

The court held that the tax is also justified under the due process clause because: Zelinsky has the requisite “’minimum connection’” to New York “by virtue of his

employment at Cardozo,” and (Embedded image moved to file: the tax is related to    intrastate values. That is, “the same protections, opportunities and benefits conferred on him by New York [that] satisfy the Commerce Clause,” justify the tax under the due process clause.(Document link: Link to footnote reference 28)28

ADVERSE IMPACT OF CONVENIENCE RULE

General Considerations

As indicated above, New York’s policy has been widely condemned on constitutional and other grounds.(Document link: Link to footnote reference 29)29  One critic has emphasized that, in addition to penalizing nonresident telecommuters, the rule unduly burdens New York employers.  If a nonresident telecommuter unexpectedly makes a brief business trip to New York in December, the employer’s payroll department may suddenly be slammed with the obligation to withhold New York tax based on the employee’s income for the whole year.  The amount the employer is required to withhold could exceed the remainder of the worker’s salary for the year.(Document link: Link to footnote reference 30)30

Commentators have stressed the policy’s toxic effect on telework.(Document link: Link to footnote  reference 31)31  Indeed, even some of the courts adjudicating Zelinsky implicitly conceded that the rule deters telework.(Document link: Link to footnote reference 32)32  The unduly onerous impact of the rule can be national in scope.

One reason the state rule may have a nationwide impact is that New York may apply the rule to nonresident telecommuters located anywhere in the country.  While such telecommuters may include nonresidents who, like Zelinsky, live in neighboring states from which they could arguably commute, they may also include employees who live too far from New York to do so.(Document link: Link to footnote reference 33)33  Another reason the convenience rule is of national concern is that New York has not been the only state to apply such a rule.(Document link: Link to footnote reference 34) 34  Further, in refusing to consider the constitutional challenges presented by the Zelinsky case, the U.S. Supreme Court essentially licensed any state not currently double taxing nonresident telecommuters to do so.

THREAT TO CERTAIN NATIONAL GOALS

By deterring telework, the convenience rule undermines the capacity of businesses to reach their bottom lines, impeding national economic growth.  Telework has the potential to enhance organizations’ productivity, reduce recruitment and turnover costs, and reduce real estate and other overhead expenses.  A rule discouraging telework prevents employers from maximizing these benefits.  Further, by making telework too expensive for many Americans, the rule compromises numerous public policy goals.  These goals include the need to protect the environment, reduce road congestion, reduce our country’s dependence on foreign nations for oil, and support employees trying to balance work and family demands.

Other public policy objectives that the convenience rule threatens include the need to assure: homeland security and continuity of government in the event of disaster; integration of the disabled into the workforce; the federal government’s ability to comply with P.L 106-346 (requiring that telework become available to 100 percent of the eligible federal workforce); and rural economic development, including a reduction in the number of American jobs lost to offshore locations.

Because, under the current administration, the federal government has placed particular emphasis on these four objectives, I discuss briefly below how the convenience rule compromises each one.

HOMELAND SECURITY/CONTINUITY OF GOVERNMENT

Telecommuting is an essential component of both public and private sector   employers’ contingency plans.  Thus, the federal government has required “all Federal agencies to designate alternate operating facilities” as part of their   continuity of operations programs and has encouraged agencies to consider telecommuting sites, including home offices, as viable alternative facilities.(Document link: Link to footnote reference 35)35

If there is a specific threat of a terror attack, a Connecticut resident working for a New York employer may be among those Americans who begin telecommuting solely because their employers’ contingency policies require them to do so.  Particularly if the attack never occurs, New York may argue that, because the nature of the employee’s work is such that it could have been performed in New York, the telework arrangement was not “necessary.” Thus, income the Connecticut telecommuter earned at home could be subject to taxation by both Connecticut and New York.  When the Department of Homeland Security heightens the color-coded terrorism threat level, nonresidents of New York (or of other states applying a convenience rule) may have to help contain national losses.  These Americans should not be subject to double taxation for doing so.

Further, telework may be most effective as an emergency management strategy when it has been part of a business’ on-going operations and workers are familiar with it.  If the cost of telework prevents employees from gaining remote work experience, they may lack the skills necessary to keep their organizations afloat when a disaster suddenly requires off-site work.  Disasters that skilled teleworkers can help their employers survive include, in addition to terror threats, public health crises, such as the SARS epidemic, and massive power outages.

INTEGRATION OF DISABLED INTO WORKFORCE

In 2001, President Bush introduced the “New Freedom Initiative,” a program intended to promote the full participation of disabled people in all aspects of American life.  A primary goal of the program is to integrate “Americans with disabilities into the workplace.” The administration has emphasized that telework plays an important role in meeting this goal.(Document link: Link to footnote reference 36)36 

Similarly, the U.S. Equal Employment Opportunity Commission (EEOC) has taken the position that telework may be a reasonable accommodation under the Americans with Disabilities Act (ADA).(Document link: Link to footnote  reference 37)37

Some New York nonresidents may telecommute solely because they suffer disabilities that preclude daily on-site work.  The EEOC and/or a court might find that, in their particular cases, the ADA requires their employers to permit telework.  However, if New York decides that the nature of the work these employees perform is such that it could be performed at the New York office, the disabled workers may be required to treat the income they earned at home as if they earned it in New York and pay tax on it.

By subjecting disabled nonresidents to double taxation, New York would essentially demand that they pay a premium for a reasonable accommodation.  The cost of exercising accommodation rights may be prohibitive for some disabled individuals.  Thus, the convenience rule may erect needless barriers before people already struggling to participate in mainstream work life: It may further marginalize people already perceived as “outsiders” because they are handicapped.

COMPLIANCE WITH P.L. 106-346

The convenience rule also frustrates the federal government’s ability to comply with the legislative mandate that telework be available to 100 percent of eligible federal workers.  If, for example, a federal employee residing outside New York works for an agency located in New York, the employee’s election to participate in the agency’s telecommuting program may subject him or her to New York tax on income earned for work done at home.  For some federal employees, the prospect of taxation by both New York and their home state may deter them from participating in the agency’s telework program.  New York effectively renders the program less available to them than it is to their colleagues who both live and work in New York.  The state should not be allowed to thwart the federal government in its effort to abide by federal law and make telework available to all its eligible employees.

RURAL ECONOMIC DEVELOPMENT

The current administration has also encouraged the use of telework to help rural communities expand their economies.  P.L. 107-171 contemplates federal support for private sector businesses that employ rural teleworkers.(Document link: Link to footnote  reference 38)38 

A state’s choice to make interstate telework unnecessarily costly for employees obstructs this goal. If businesses cannot maximize the bottom-line benefits of telework by employing teleworkers located throughout the United States-such as call center agents or medical transcriptionists working from home offices-the incentive grows to hire teleworkers located abroad.  Were this administration to pass legislation prohibiting states from applying the convenience rule, it would help check the loss of American jobs to offshore locations.

CONCLUSION

Because the convenience of the employer doctrine threatens significant national interests in the ways identified here (among others), defusing the policy must become a federal priority.  Remedial federal legislation is necessary to assure that individual states do not constrain the citizens of other states from contributing to the nation’s economy via cyberspace.

(Document link: Link to footnote reference 1)1 1 N.Y.3d 85 (2003), cert. denied 72 U.S.L.W. 3672 (Apr. 26, 2004).

(Document link: Link to footnote reference 2)2 20 NYCRR 132.18(a) (“If a nonresident employee …  performs services for his employer both within and without New York State, his income derived from New York State sources includes that proportion of his total compensation for services rendered as an employee which the total number of working days employed within New York State bears to the total number of working days employed both within and without New York State….  However, any allowance claimed for days worked outside New York State must be based upon the performance of services which of necessity, as distinguished from convenience, obligate the employee to out-of-state duties in the service of his employer”).

(Document link: Link to footnote reference 3)3 Nicole Belson Goluboff, The Law of Telecommuting (ALI-ABA 2001, Supplement 2004)(“Goluboff I”), ch.  9 (collecting cases).

(Document link: Link to footnote reference 4)4 Zelinsky v. Tax Appeals Tribunal of New York, petition for certiorari (“Zelinsky Cert.  Petition”), filed Feb. 13, 2004, at 9-16.

(Document link: Link to footnote reference 5)5 Id.  at 14.

(Document link: Link to footnote reference 6)6 Id.  at 14-15.

(Document link: Link to footnote reference 7)7 Zelinsky v. Tax Appeals Tribunal of New York, Brief of Richard Blumenthal, Attorney General of the State of Connecticut, as Amicus Curiae in Support of Petitioner, filed Mar. 16, 2004.

(Document link: Link to footnote reference 8)8 1 N.Y.3d 85 (2003).

(Document link: Link to footnote reference 9)9 Id.

(Document link: Link to footnote reference 10)10 Walter Hellerstein, “Reconsidering the Constitutionality of the `Convenience of the Employer’ Doctrine,” State Tax Today, May 12, 2003 (“Hellerstein”).  See also Robert D. Plattner, “Vantage Point: New York’s `Convenience of the Employer’ Doctrine-A Role for Complete Auto Transit’s Fourth Prong,” State Tax Today,  July 7, 2003 (“If there is concern that taxpayers are abusing their right to apportion, the state can require more rigorous proof.  Further, … if the enforcement issue is … whether work was performed at all [on a specific day], the appropriate state response, absent sufficient proof from the taxpayer, is to exclude that day from both the numerator and denominator of the New York work days/total workdays ratio.  Indeed, it might well be constitutionally permissible for New York to adopt a revised convenience rule based on its enforcement concerns that excluded convenience days from the definition of `workdays,’ thus removing them from the apportionment calculation altogether.  Treating a convenience day in this manner would not, as the current rule does, arbitrarily ascribe physical presence in New York to a taxpayer when just the opposite is true”).

(Document link: Link to footnote reference 11)11 1 N.Y.3d 85 (2003).

(Document link: Link to footnote reference 12)12 In the Matter of Zelinsky, Determination DTA No.  817065 (N.Y. Div. Tax. App. Nov. 2, 2000)(Dennis M.

Galliher, Administrative Law Judge).

(Document link: Link to footnote reference 13)13 In the Matter of Zelinsky, Decision DTA No. 817065 (N.Y. Tax. App. Trib. Nov. 21, 2001)(emphasis added).

(Document link: Link to footnote reference 14)14

www.cardozo.yu.edu (emphasis added).

(Document link: Link to footnote reference 15)15 Id.

(Document link: Link to footnote reference 16)16 1 N.Y.3d 85 (2003).

(Document link: Link to footnote reference 17)17 Id.

(Document link: Link to footnote reference 18)18 See e.g., Peter L. Faber, “’State of Practice’: New York’s `Convenience of Employer’ Doctrine Extended in Unterweiser,” State Tax Today, Sept. 8, 2003 (“Faber I”)(“[T]here is a fundamental difference between a state’s power to tax the income of residents and its power to tax the income of nonresidents.  A state can tax all of a resident’s income because of the fact of residency.  As to a nonresident, it can only tax that part of the person’s income that was earned within the state….  If nonresidents derive a benefit from working at home outside the state that is not available to residents, that is a benefit that is conferred, and, indeed, required, by the U.S.  Constitution, and the New York courts have no power to take it away”); Hellerstein.

(Document link: Link to footnote reference 19)19 Zelinsky Cert. Petition at 28.

(Document link: Link to footnote reference 20)20 1 N.Y.3d 85 (2003).

(Document link: Link to footnote reference 21)21 20 NYCRR §132.18(a).

(Document link: Link to footnote reference 22)22 1 N.Y.3d 85 (2003).

(Document link: Link to footnote reference 23)23 Id.

(Document link: Link to footnote reference 24)24 Id.

(Document link: Link to footnote reference 25)25 Id.

(Document link: Link to footnote reference 26)26 See e.g., Hellerstein (explaining that “the `convenience of the employer’ doctrine does not reflect the factors that underlie a state’s constitutional power to tax nonresidents’ income, namely, whether the state is providing benefits or protections with respect to the production of that income….  A taxpayer’s reasons for working at home instead of at his or her office have little bearing on the benefits or protections that a state is providing with respect to the production of that income.” The state provides the same benefits regardless of whether an employee telecommutes for personal convenience or because the employer demands it.  Further, “[i]t is the benefits provided to [the employee], not those provided to [the employer] that should be the touchstone of the constitutional analysis”).  See also Zelinsky Cert.  Petition at 27, n. 18 (“It is more than a little ironic that the [Court of Appeals’] decision …  justifies New York’s unapportioned, extraterritorial taxation of nonresident telecommuters on the basis of New York public services when other commentators on telecommuting indicate that telecommuters who work at their homes thereby reduce their consumption of public services”).

(Document link: Link to footnote reference 27)27 1 N.Y.3d 85 (2003)

(Document link: Link to footnote reference 28)28 Id.

(Document link: Link to footnote reference 29)29 See also Goluboff I, ch. 9.

(Document link: Link to footnote reference 30)30 Faber I; Peter L. Faber, “’State of Practice’:

Telecommuting-Practical Problems with the Convenience/Necessity Test,” State Tax Today, Oct.  9, 2001.

(Document link: Link to footnote reference 31)31 See e.g., Hellerstein (“Perhaps the most disturbing aspect of the `convenience of the employer’ rule, particularly as implemented by the New York taxing authorities, is its extension to telecommuters.  Not only are telecommuters an increasingly common phenomenon, especially in the New York area where physical commutes to work can be costly and time-consuming, but the defensibility of the …  doctrine in this context is at its weakest”);

Nicole Belson Goluboff, “Helping New York Recover: Removing An Unfair Tax on Telecommuters,” FindLaw’s

Legal Commentary, http://writ.findlaw.com, Dec. 3, 2001.  See also Goluboff I.

(Document link: Link to footnote reference 32)32 In the Matter of Zelinsky, Determination DTA No.  817065 (N.Y. Div. Tax. App. Nov. 2, 2000)(Dennis M.  Galliher, Administrative Law Judge)(Zelinsky “pays a price for choosing to work at home”); Zelinsky v.  Tax Appeals Tribunal of New York, 1 N.Y.3d 85 (2003)(“The State need not … discourag[e] commuting into New York City”).

(Document link: Link to footnote reference 33)33 See e.g., Huckaby v. New York State Division of Tax Appeals, 2004 N.Y. App. Div. LEXIS 5008 (App. Div.  3d Dept. Apr. 29, 2004)(The taxpayer was a Tennessee resident who, for personal reasons, telecommuted to his New York employer.  He traveled to New York “as needed.” In 1994 and 1995, he spent approximately 25% of his time working in New York.  New York applied the convenience rule and determined that, because his telework arrangement was not necessary, his entire income for those years was taxable by New York.  Huckaby argued that the rule violated the Constitution’s due process and equal protection clauses, but the New York Appellate Division upheld the tax).

(Document link: Link to footnote reference 34)34 Hellerstein at n.15 (noting similar rules in Nebraska and Pennsylvania).

(Document link: Link to footnote reference 35)35 Federal Emergency Management Agency, Federal Preparedness Circular,” FPC-67 (Apr. 30, 2001).

(Document link: Link to footnote reference 36)36 “New Freedom Initiative: A Progress Report,” March 2004.

(Document link: Link to footnote reference 37)37 See e.g., EEOC Enforcement Guidance on Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, Oct. 17, 2002, available at http://www.eeoc.gov; EEOC, “Work At

Home/Telework as a Reasonable Accommodation,” issued Feb. 2003, available at http://www.eeoc.gov.

(Document link: Link to footnote reference 38)38 7 U.S.C. §2008n.

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