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I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would

I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would have caused the company to have a "sufficient physical presence" in the state, and meant that they would have to do a lot of extra work as well as paying extra sales taxes for sales in that state as well as setup the infrastructure to send the required taxes to that state. It was enough of a hassle and cost that they decided to go with someone else over me, because they were in a state that the company already had employees in (at least that's what they told me...)

pc86 8y ago
Why not mention the state? You should contact your state representative (not member of Congress) and state senator (not US Senator) and let them know that you were denied a well-paying job because of the onerous standards your state has for remote work. They might be inclined to change it.
- toomuchtodo 8y ago
  It's unlikely a state is going to unwind their taxing and funding model for a few remote jobs (nor should they). EDIT: OP mentions the state in question is Florida, which has no personal income tax, but does have a state sales tax (disclaimer: I am also a resident of Florida); I believe a recent court decision on the HN front page [+] makes that a moot point (the business will have to collect those sales taxes regardless of nexus), which leads me to believe their decision not to hire OP was a bit short sighted. [+] https://news.ycombinator.com/item?id=17365366 https://news.ycombinator.com/item?id=17365366 | https://www.bloomberg.com/news/articles/2018-06-21/states-can-require-internet-tax-collection-supreme-court-rules-jiomtl5c https://www.bloomberg.com/news/articles/2018-06-21/states-ca... (Online Retailers Can Be Forced to Collect Tax, High Court Rules)
- Klathmon 8y ago
  I actually thought I did (it's Florida by the way)... I want to be clear, that I don't blame the state in the slightest. I honestly feel that companies should have to pay taxes where they operate regardless of how many employees live there, but what sucks is that a lot of states have difficult tax codes, esoteric and difficult ways of sending taxes in, have varying laws that make it extremely hard to follow the law unless you are a lawyer familiar with that area, and often won't help you if you need it. I also don't really blame the company. I still feel like I would have been more than worth the extra hassle, but they aren't sure. And if they can avoid having to pay taxes in that state by not hiring me, and that can provide them a material benefit, then I'd probably do the same as them if I were in their position.
  - djschnei 8y ago
    Blame the state! A complicated, unwieldy tax code is their/our fault. They created an untenable system that got in the way of you entering into a mutually beneficial contract with another individual(s). It is 100% their fault.
    - Klathmon 8y ago
      But it may not have been my state in particular, but the fact that they are all different. Even the easiest tax system in the world won't make up for the fact that they need to record and charge for tax in that state, then send that money back to the state. Short of not having sales tax, there really isn't a way that they can simplify it. And again, unless you are a lawyer that knows the tax laws in that area, you won't know how good or bad the local tax system is until you go to try and enter it.
      - T2_t2 8y ago
        Why not centralise it? Imagine a single account# that employees were paid to, where everything was taken care of? Lets say one earns $120K, an employer pays $10K a month to that number, and everything is taken care of, and the employee is responsible for the outcomes, e.g. if you move, you are responsible for changing your state of residence. It is weird - and I say this as an Australian - that an employer can be on the hook for employee's moving. it would be much easier if this was managed centrally.
    - T2_t2 8y ago
      America has it rough there. Australia (with a MUCH lower population) has only federal income tax, and a clear delineation of what taxes each level of government can charge.
  - ajross 8y ago
    > I also don't really blame the company. You should. Or conversely, you can look at this as having dodged a bullet. On paper, they were willing to commit to multiple years of a presumptively-six-figure salary to you (seriously: an employment agreement is a big financial deal, even if it's legally "at will" -- there's a lot of money on the table) but pulled out because of some fear of bureaucracy and (maybe) a tax increase? That tells me that the commitment they were thinking of putting on paper wasn't worth, heh, the paper. That's not a loyal employer, basically. If they're willing to cut corners with the State of Florida they'll do it with their own employees too.
anoncoward111 8y ago
That really sucks. It is a reality I see some of my clients facing too. I've wondered what would happen if you offered to work as a self-employed 1099 employee, or if you opened your own LLC. Does that employer offer health insurance? That's pretty much the only reason why someone would demand being a W2 employee in my mind. And there's lots of ways to get health insurance in this country.
- Klathmon 8y ago
  I had other offers, so it wasn't a big deal in the end. But I've worked as a 1099 contractor before, and I'm not doing that again. You say there's lots of ways to get health insurance in this country, but in my experience that's not the case. Not only is it vastly more expensive, but (not to get too political) I can't really rely on my ability to buy insurance as a single person at a reasonable rate to stay around.
  - anoncoward111 8y ago
    Ironically I work as an insurance broker, but I assure you I am acutely aware of how absurd some of the premiums and markets can be. I've become pretty cynical as of late. So like, sure, if you are working for Google or some other tech company that subsidizes 90-100% of an employee's health care costs, then you are getting a great deal, especially if you have a family. If you want a really large network with lots of doctors and you want a very very low deductible, then for a single person this is going to be $1100 for a single person, $2200 for a couple, $3100 for a family PER MONTH!!!!. Now, that's for ridiculously good coverage of course. If you want the cheapest coverage possible, then it's about $500 per month for a single person, $1000 couple, $1500 family etc. But here we are talking about $6,000 deductibles and so on. But, if you have literally no income, then you can get something like FidelisCare in NY for $20 a month, or Medicaid. There might be trouble with finding a doctor who accepts it. But that's the reality we face in this country. Unless you are 65, then you can get Medicare + Medigap for pretty damn cheap. So, I am someone who is neither eligible for medicare, nor a large employer subsidy. So I only have catastrophic insurance- and that's from a full-time job! If I married my girlfriend, I would have better coverage from her employer. And when I was eligible for coverage from my parents, that one was pretty good. The easiest thing is to just not get sick. But if you own your own LLC and you are charging very high hourly rates, your client (the one who would have employed you as a W2) is probably happy to not have you on their payroll, because the rates I quoted you above are the rates they would pay to offer you insurance.
toomuchtodo 8y ago
Trinet [+] is the usual go-to for US-based fully remote organizations so they don't need to maintain business registrations in each state their employees reside in. Disclaimer: Was employed through Trinet at a fully remote org. [+] https://www.trinet.com/ https://www.trinet.com/
gnopgnip 8y ago
They are going to pay sales tax for out of state sales soon.
- Operyl 8y ago
  I get that this is a different trending article in HN right now, but we're talking about paying employees and the taxes required for income here.. not talking about selling products.
  - Klathmon 8y ago
    No he's right, and that's what I was talking about too. As far as I can tell (i'm not an accountant), a tax nexus mainly applies to sales made in that state, and sales tax that has to be collected and paid. Income tax is a whole other beast, and I need to ensure I would be paying that if it was needed (Florida, my state, doesn't have any, so I don't need to worry about that).
zekevermillion 8y ago
Today's US Supreme Court decision in South Dakota v Wayfair eliminates the "physical presence" test for sales tax jurisdiction. [1] Thus your prospective employer's reasoning (at least as far as substantial presence for sales tax purposes) turns out to have been moot. However, depending on the employer's business form, etc, there could be other implications to remote employee location beyond just complying with state payroll tax and labor law obligations. For example, when I was in a partnership, my out-of-state partners still had to pay state income tax on income "sourced" in my state even though they lived in a zero-income-tax jurisdiction. [1]: https://www.reuters.com/article/us-usa-court-taxes/u-s-top-court-lets-states-force-online-retailers-to-collect-sales-tax-idUSKBN1JH23B https://www.reuters.com/article/us-usa-court-taxes/u-s-top-c...
ddebernardy 8y ago
On the plus side, the Supreme Court apparently threw that argument out the window today. [1] [1]: https://news.ycombinator.com/item?id=17365366 https://news.ycombinator.com/item?id=17365366

pc86 8y ago

Why not mention the state? You should contact your state representative (not member of Congress) and state senator (not US Senator) and let them know that you were denied a well-paying job because of the onerous standards your state has for remote work. They might be inclined to change it.

toomuchtodo 8y ago
It's unlikely a state is going to unwind their taxing and funding model for a few remote jobs (nor should they). EDIT: OP mentions the state in question is Florida, which has no personal income tax, but does have a state sales tax (disclaimer: I am also a resident of Florida); I believe a recent court decision on the HN front page [+] makes that a moot point (the business will have to collect those sales taxes regardless of nexus), which leads me to believe their decision not to hire OP was a bit short sighted. [+] https://news.ycombinator.com/item?id=17365366 https://news.ycombinator.com/item?id=17365366 | https://www.bloomberg.com/news/articles/2018-06-21/states-can-require-internet-tax-collection-supreme-court-rules-jiomtl5c https://www.bloomberg.com/news/articles/2018-06-21/states-ca... (Online Retailers Can Be Forced to Collect Tax, High Court Rules)
Klathmon 8y ago
I actually thought I did (it's Florida by the way)... I want to be clear, that I don't blame the state in the slightest. I honestly feel that companies should have to pay taxes where they operate regardless of how many employees live there, but what sucks is that a lot of states have difficult tax codes, esoteric and difficult ways of sending taxes in, have varying laws that make it extremely hard to follow the law unless you are a lawyer familiar with that area, and often won't help you if you need it. I also don't really blame the company. I still feel like I would have been more than worth the extra hassle, but they aren't sure. And if they can avoid having to pay taxes in that state by not hiring me, and that can provide them a material benefit, then I'd probably do the same as them if I were in their position.
- djschnei 8y ago
  Blame the state! A complicated, unwieldy tax code is their/our fault. They created an untenable system that got in the way of you entering into a mutually beneficial contract with another individual(s). It is 100% their fault.
  - Klathmon 8y ago
    But it may not have been my state in particular, but the fact that they are all different. Even the easiest tax system in the world won't make up for the fact that they need to record and charge for tax in that state, then send that money back to the state. Short of not having sales tax, there really isn't a way that they can simplify it. And again, unless you are a lawyer that knows the tax laws in that area, you won't know how good or bad the local tax system is until you go to try and enter it.
    - T2_t2 8y ago
      Why not centralise it? Imagine a single account# that employees were paid to, where everything was taken care of? Lets say one earns $120K, an employer pays $10K a month to that number, and everything is taken care of, and the employee is responsible for the outcomes, e.g. if you move, you are responsible for changing your state of residence. It is weird - and I say this as an Australian - that an employer can be on the hook for employee's moving. it would be much easier if this was managed centrally.
  - T2_t2 8y ago
    America has it rough there. Australia (with a MUCH lower population) has only federal income tax, and a clear delineation of what taxes each level of government can charge.
- ajross 8y ago
  > I also don't really blame the company. You should. Or conversely, you can look at this as having dodged a bullet. On paper, they were willing to commit to multiple years of a presumptively-six-figure salary to you (seriously: an employment agreement is a big financial deal, even if it's legally "at will" -- there's a lot of money on the table) but pulled out because of some fear of bureaucracy and (maybe) a tax increase? That tells me that the commitment they were thinking of putting on paper wasn't worth, heh, the paper. That's not a loyal employer, basically. If they're willing to cut corners with the State of Florida they'll do it with their own employees too.

anoncoward111 8y ago

That really sucks. It is a reality I see some of my clients facing too. I've wondered what would happen if you offered to work as a self-employed 1099 employee, or if you opened your own LLC. Does that employer offer health insurance? That's pretty much the only reason why someone would demand being a W2 employee in my mind. And there's lots of ways to get health insurance in this country.

Klathmon 8y ago
I had other offers, so it wasn't a big deal in the end. But I've worked as a 1099 contractor before, and I'm not doing that again. You say there's lots of ways to get health insurance in this country, but in my experience that's not the case. Not only is it vastly more expensive, but (not to get too political) I can't really rely on my ability to buy insurance as a single person at a reasonable rate to stay around.
- anoncoward111 8y ago
  Ironically I work as an insurance broker, but I assure you I am acutely aware of how absurd some of the premiums and markets can be. I've become pretty cynical as of late. So like, sure, if you are working for Google or some other tech company that subsidizes 90-100% of an employee's health care costs, then you are getting a great deal, especially if you have a family. If you want a really large network with lots of doctors and you want a very very low deductible, then for a single person this is going to be $1100 for a single person, $2200 for a couple, $3100 for a family PER MONTH!!!!. Now, that's for ridiculously good coverage of course. If you want the cheapest coverage possible, then it's about $500 per month for a single person, $1000 couple, $1500 family etc. But here we are talking about $6,000 deductibles and so on. But, if you have literally no income, then you can get something like FidelisCare in NY for $20 a month, or Medicaid. There might be trouble with finding a doctor who accepts it. But that's the reality we face in this country. Unless you are 65, then you can get Medicare + Medigap for pretty damn cheap. So, I am someone who is neither eligible for medicare, nor a large employer subsidy. So I only have catastrophic insurance- and that's from a full-time job! If I married my girlfriend, I would have better coverage from her employer. And when I was eligible for coverage from my parents, that one was pretty good. The easiest thing is to just not get sick. But if you own your own LLC and you are charging very high hourly rates, your client (the one who would have employed you as a W2) is probably happy to not have you on their payroll, because the rates I quoted you above are the rates they would pay to offer you insurance.

toomuchtodo 8y ago

Trinet [+] is the usual go-to for US-based fully remote organizations so they don't need to maintain business registrations in each state their employees reside in. Disclaimer: Was employed through Trinet at a fully remote org. [+] https://www.trinet.com/ https://www.trinet.com/

gnopgnip 8y ago

They are going to pay sales tax for out of state sales soon.

Operyl 8y ago
I get that this is a different trending article in HN right now, but we're talking about paying employees and the taxes required for income here.. not talking about selling products.
- Klathmon 8y ago
  No he's right, and that's what I was talking about too. As far as I can tell (i'm not an accountant), a tax nexus mainly applies to sales made in that state, and sales tax that has to be collected and paid. Income tax is a whole other beast, and I need to ensure I would be paying that if it was needed (Florida, my state, doesn't have any, so I don't need to worry about that).

zekevermillion 8y ago

Today's US Supreme Court decision in South Dakota v Wayfair eliminates the "physical presence" test for sales tax jurisdiction. [1] Thus your prospective employer's reasoning (at least as far as substantial presence for sales tax purposes) turns out to have been moot. However, depending on the employer's business form, etc, there could be other implications to remote employee location beyond just complying with state payroll tax and labor law obligations. For example, when I was in a partnership, my out-of-state partners still had to pay state income tax on income "sourced" in my state even though they lived in a zero-income-tax jurisdiction. [1]: https://www.reuters.com/article/us-usa-court-taxes/u-s-top-court-lets-states-force-online-retailers-to-collect-sales-tax-idUSKBN1JH23B https://www.reuters.com/article/us-usa-court-taxes/u-s-top-c...

ddebernardy 8y ago

On the plus side, the Supreme Court apparently threw that argument out the window today. [1] [1]: https://news.ycombinator.com/item?id=17365366 https://news.ycombinator.com/item?id=17365366