"Mr. Bobman offers a potential solution: Have the telecommuting employee resign, form a C or S corporation and invoice the ex-employer for work. But he warns th

"Mr. Bobman offers a potential solution: Have the telecommuting employee resign, form a C or S corporation and invoice the ex-employer for work. But he warns that the former employer would have to pay the former employee more to cover new expenses and lost benefits. And, although it would be a challenge, states could still make a case for taxing the former employer." It starts with full-time employees and ends with anyone you pay... Similar to how sales tax started with the location of your company and is now the location of your servers ( in several states ).